“If you fail to plan, you are planning to fail!” (Benjamin Franklin)
Previously we discussed why a business plan is so important, this month we look at the mechanics of compiling it.
There are many templates available (most banks have pretty good ones), and by using one you can ensure you cover all the relevant topics involved –
- Plan and researchA business plan involves a considerable amount of work and is a structured process.
This phase of the business plan, typically, takes about 65-70% of the time in putting together the document. The better your planning and research, the better will be the business plan.
- Do a company overviewWhen you visit a new website, you look for a “who we are”, and a “what we do” section, so you can quickly ascertain if it is worth looking at the rest of the website. Then you look at products and/or services, then the management of the business, followed by financial history (if available). A good website will have captured the essence of the business and will give you a good idea of it and more importantly how focused and how well it is run.
Doing an analogous exercise for your business puts it into clear focus. By now you have carried out your research and preparing the company overview establishes just how well you know your business and can also show up any potential flaws in your venture that you will need to address.
- Document your businessThis is the detail part of the plan. Having completed research and done a high-level overview now you drill down into the various aspects of the company, such as production, sales, marketing, finance, human resources plus other areas unique to the business.
Don’t forget you will need to show investors, bankers or whoever the business plan is aimed at just how well you know your venture.
- Prepare your Strategic Marketing PlanThis is important to investors and stakeholders – what products/services you intend to launch and in what areas (Africa or Europe etc), how you will promote them, how you will make use of social media, your pricing strategy, how you will stretch your brands by line extensions etc, what market segments you are in and plan to get into, what customers you plan to attract and how you plan to grow your business through them.
As all this will cost money, show how you plan to invest this money into making your business profitable.
- Prepare your Financial PlanThis is really the summary of the business plan. You will need to do income statements, balance sheets and cash flows. Set out key data such as margins, detailed cost breakdowns and so on. It is important to demonstrate your mastery of your business by showing a well thought out financial plan.
Finally, your commitment and passion for the business should come through; if you know your own business, explain it in your own words.