The importance of a business plan is sometimes unknown to the many young entrepreneurs, it could be regarded as just a piece of paper, but it’s more than just that.
A business plan is imperative to the future of your business and when problems arise in your business, the business plan is usually your first point of reference.
This written document explains in detail how a new business will achieve it’s goals, and lays down the foundation of the business from a marketing, financial and operational point of view. A business plan can also be prepared for an established business, who wishes to move in a new direction.
A business plan can either make your business or break your business, and like the quote by late Benjamin Franklin (one of the founding fathers of the United States) says, “If you fail to plan, you are planning to fail”.
And with that said, budding Nigerian businessmen may want to take this strategy into consideration, since the country is known to be home to many entrepreneurs.
Within the overall outline of the business plan, the executive summary will follow the title page. The summary should tell the reader what you want. This is very important. All too often, what the business owner desires is buried on page eight. Clearly state what you’re asking for in the summary.
The business description usually begins with a short description of the industry. When describing the industry, discuss the present outlook as well as future possibilities. You should also provide information on all the various markets within the industry, including any new products or developments that will benefit or adversely affect your business.
Market strategies are the result of a meticulous market analysis. A market analysis forces the entrepreneur to become familiar with all aspects of the market so that the target market can be defined and the company can be positioned in order to garner its share of sales.
The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within your market, strategies that will provide you with a distinct advantage, the barriers that can be developed in order to prevent competition from entering your market, and any weaknesses that can be exploited within the product development cycle.
The mission of the design and development plan section, is to provide investors with a description of the product’s design, chart its development within the context of production, marketing and the company itself, and create a development budget that will enable the company to reach its goals.
The operations and management plan is designed to describe just how the business functions on a continuing basis. The operations plan will highlight the logistics of the organisation such as the various responsibilities of the management team, the tasks assigned to each division within the company, and capital and expense requirements related to the operations of the business.
And last, but not least, remember the financial aspect of the business.
Remember that financial data is always at the back of the business plan, but that doesn’t mean it is any less important than up-front material such as the business concept and the management team.
With these important factors of a business plan, you might want to get familiarised as an entrepreneur, because as previously explained, “If you fail to plan, you are planning to fail”.
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