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Writing your own customised business plan
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Tony is filled with excitement on the progress made so far on his quest towards going into self-employment. He meets with Shina, the tycoon in the latter’s office.
“Have you written your business plan?” Shina asks.
“My consultant will do that. She is quite good.”
“I do not doubt the competence of your consultant but you have to write your own business plan. Many entrepreneurs end up not using their business plans after the launch of the business because the plans were written for them. The best person to translate a dream into paper is the dreamer. Afterwards, the professionals can help you put together the joints and ligaments.”
“But I don’t know anything about writing a business plan,” said Tony.
“Rather than ask others to write your business plan, ask them how to write it. They could give you a format. Another important reason you should write the business plan is that you may someday need funding from institutional investors. If you are not the originator of the plan, you would very likely be unable to defend it. You would then need consultants to interpret it. The danger in that is that the consultant may not be with you during the negotiation.
Wise investors do not just assess business plans; no matter how beautifully written, they assess the entrepreneur’s ability, passion and commitment to the project. Any entrepreneur that cannot defend creditably what is written in his business plan before prospective investors would be giving the impression that he is incompetent. The investors would doubt your ability to drive the business to success and withhold their funds.”
Tony releases a deep breath. “But writing a business plan is so technical.”
“Yes, but you can put on paper the aspects that are not so technical and then get professionals to assist with the technical aspects. Writing a business plan is so easy because it is putting your vision in black and white. As long as you have a vision and you are literate, there is no reason you cannot write your own business plan.” Shina insists. “Now get a pen and paper.”
Tony quickly brings out a leather-bound notebook from his briefcase. He writes with the pen as Shina explains the different aspects of a business plan:
Business name
Write the name of the business. In choosing a name for the business, let the name be such that would reflect at least a little of what you do. The idea of having a name like Tony and Sons Limited or a name that is jaw breaking is not wise. The name of a company and its products are very important features in branding as you would discover later.
Logo
For any colour you want to use in your logo and the colour schemes in your official documents, first find out if it is appropriate. Every colour is communicating a certain message. Re-branding a business is very costly, so it is better to get it right at the onset. Verify from a brand consultant that the colours you have chosen are appropriate for the business and products you want to offer.
Professional style
What kind of structure would be put in place? What are the skills and competence needed for the kind of business operations your company would be doing? How would the organisation be run? What departments would be needed for the smooth running of the business? What will be the line of authority? How will employees be expected to comport themselves in the office; the kind of dress code that would be suitable for the kind of organisation you want to establish etc.
Executive Summary
This should state clearly the most important thing(s) about the business opportunity. It is a summary of what the entire business is all about. You can write the executive summary after you have completed the business plan writing. Emphasise its uniqueness, what makes it stand out from every other business and the justification for establishing it. This is the part prospective investors usually look at first.
Key members of the working team
Outline every key post and the qualification or skills each one is to possess; as well as description of their duties, qualifications, skills, experience. If you do not do this, chances are that you will employ people without knowing precisely what their job description should be. You may employ an over qualified person for a job that can be done by someone less qualified and pay more or employ someone without the necessary skills for certain duties.
Description of the product, business idea or opportunity
You should have done some research with the assistance of people knowledgeable in the field, so write the background information you have about the business idea. Describe the product or service and its relevance to the users. What are the potentials of your product? Write it.
Industry overview
What has been the growth rate, stability and challenges in the industry your business is being categorised. For instance, someone going into the service sector should be able to have a good idea of how high the demand is. If you are going into manufacturing of a product, you should be able to estimate the demand, possible increase in demand and the challenges people operating in such a sector are experiencing.
You should also know the gatekeepers to entry. For instance, if it is packaged food, you should know you have to register with some agencies such as NAFDAC. So find out the modalities for such registration. Don’t start first and discover later. When you have found out, put them in the plan.
Competition
Name and describe all the direct and indirect competitors of your product. The competitors are not just the people producing the same kind of product but anyone with product or service that may make your customers decide not to buy what you offer. Then identify the competitive advantages your product has over these other products.
Market analysis
Identify the customers you are targeting. This is necessary because it will enable you to know the price that you can offer the product. If you are targeting people in the high income bracket and you offer something too cheap, you will not get your target. On the other hand, if it is people in the lower income bracket, then the cost must not be too high. You also must have checked with the consultant the estimated market size. What is the rough estimate of people that use such product? What has been the trend in the industry? You know tastes of people change from time to time, so be sure it is a product that is not seasonal. If so, you should plan creative things that would .
Marketing plan
How are you going to ensure that the products get to the target? The marketing plan will include publicity, advertisement, promotion etc that would be done to get consumers aware of the product. For instance, if you have a product for market women and artisans, advertising on the internet or newspapers is not a good way to get your message across. It will also state clearly the sales or distribution channels. What are the bottlenecks or challenges and how would they be overcome?
Financial Plan
You have done the financial plan with the consultant, so include the financial projections, break-even point, estimates of the earnings including assumptions and probabilities and capital requirements of the business. You may not be a mathematician, but ensure you have a good idea of how they arrived at these figures.
Stages
Most of what you have been doing is projections into the future. So return to the present and highlight how you are going to start. Then break your future projections into time specific plans.
If you start this year, what are the things you have to start with?
What stage do you expect the business to be by next year, two years, three, years, four, five etc. Which employees are needed to start with on full-time? Which ones should be employed on part time and the business would still be able to run well.
Current assets
Write all the things you have currently to start with…money, building, vehicles, people etc.
Operating plan
Identify the day-to-day operations for the success of the business. If you are going to be rendering this service or producing this quantity of goods, what are the activities that would be performed?
Based on the people you are starting with, who should do what? This will enable you to know the jobs that must be performed. So in employing people, you will be able to tell them precisely what their job specifications are. At this stage, you should be cutting costs as much as possible, so you would not employ someone full time and then find out the work to be done is not something that should take the entire day.
Many small business owners get angry when employees are idle or do not have any work to do for the company a greater part of the day. The employee may find it disheartening if you try to get them to do tasks that were not originally specified in the job description or unrelated to what they were employed to do.
Commit it to God
It is just a plan. So many unforeseen things may happen along the line. You do not know the future, so commit your plans into God’s hands.
Tony nods. “The idea is becoming clearer.”
“Have you written your business plan?” Shina asks.
“My consultant will do that. She is quite good.”
“I do not doubt the competence of your consultant but you have to write your own business plan. Many entrepreneurs end up not using their business plans after the launch of the business because the plans were written for them. The best person to translate a dream into paper is the dreamer. Afterwards, the professionals can help you put together the joints and ligaments.”
“But I don’t know anything about writing a business plan,” said Tony.
“Rather than ask others to write your business plan, ask them how to write it. They could give you a format. Another important reason you should write the business plan is that you may someday need funding from institutional investors. If you are not the originator of the plan, you would very likely be unable to defend it. You would then need consultants to interpret it. The danger in that is that the consultant may not be with you during the negotiation.
Wise investors do not just assess business plans; no matter how beautifully written, they assess the entrepreneur’s ability, passion and commitment to the project. Any entrepreneur that cannot defend creditably what is written in his business plan before prospective investors would be giving the impression that he is incompetent. The investors would doubt your ability to drive the business to success and withhold their funds.”
Tony releases a deep breath. “But writing a business plan is so technical.”
“Yes, but you can put on paper the aspects that are not so technical and then get professionals to assist with the technical aspects. Writing a business plan is so easy because it is putting your vision in black and white. As long as you have a vision and you are literate, there is no reason you cannot write your own business plan.” Shina insists. “Now get a pen and paper.”
Tony quickly brings out a leather-bound notebook from his briefcase. He writes with the pen as Shina explains the different aspects of a business plan:
Business name
Write the name of the business. In choosing a name for the business, let the name be such that would reflect at least a little of what you do. The idea of having a name like Tony and Sons Limited or a name that is jaw breaking is not wise. The name of a company and its products are very important features in branding as you would discover later.
Logo
For any colour you want to use in your logo and the colour schemes in your official documents, first find out if it is appropriate. Every colour is communicating a certain message. Re-branding a business is very costly, so it is better to get it right at the onset. Verify from a brand consultant that the colours you have chosen are appropriate for the business and products you want to offer.
Professional style
What kind of structure would be put in place? What are the skills and competence needed for the kind of business operations your company would be doing? How would the organisation be run? What departments would be needed for the smooth running of the business? What will be the line of authority? How will employees be expected to comport themselves in the office; the kind of dress code that would be suitable for the kind of organisation you want to establish etc.
Executive Summary
This should state clearly the most important thing(s) about the business opportunity. It is a summary of what the entire business is all about. You can write the executive summary after you have completed the business plan writing. Emphasise its uniqueness, what makes it stand out from every other business and the justification for establishing it. This is the part prospective investors usually look at first.
Key members of the working team
Outline every key post and the qualification or skills each one is to possess; as well as description of their duties, qualifications, skills, experience. If you do not do this, chances are that you will employ people without knowing precisely what their job description should be. You may employ an over qualified person for a job that can be done by someone less qualified and pay more or employ someone without the necessary skills for certain duties.
Description of the product, business idea or opportunity
You should have done some research with the assistance of people knowledgeable in the field, so write the background information you have about the business idea. Describe the product or service and its relevance to the users. What are the potentials of your product? Write it.
Industry overview
What has been the growth rate, stability and challenges in the industry your business is being categorised. For instance, someone going into the service sector should be able to have a good idea of how high the demand is. If you are going into manufacturing of a product, you should be able to estimate the demand, possible increase in demand and the challenges people operating in such a sector are experiencing.
You should also know the gatekeepers to entry. For instance, if it is packaged food, you should know you have to register with some agencies such as NAFDAC. So find out the modalities for such registration. Don’t start first and discover later. When you have found out, put them in the plan.
Competition
Name and describe all the direct and indirect competitors of your product. The competitors are not just the people producing the same kind of product but anyone with product or service that may make your customers decide not to buy what you offer. Then identify the competitive advantages your product has over these other products.
Market analysis
Identify the customers you are targeting. This is necessary because it will enable you to know the price that you can offer the product. If you are targeting people in the high income bracket and you offer something too cheap, you will not get your target. On the other hand, if it is people in the lower income bracket, then the cost must not be too high. You also must have checked with the consultant the estimated market size. What is the rough estimate of people that use such product? What has been the trend in the industry? You know tastes of people change from time to time, so be sure it is a product that is not seasonal. If so, you should plan creative things that would .
Marketing plan
How are you going to ensure that the products get to the target? The marketing plan will include publicity, advertisement, promotion etc that would be done to get consumers aware of the product. For instance, if you have a product for market women and artisans, advertising on the internet or newspapers is not a good way to get your message across. It will also state clearly the sales or distribution channels. What are the bottlenecks or challenges and how would they be overcome?
Financial Plan
You have done the financial plan with the consultant, so include the financial projections, break-even point, estimates of the earnings including assumptions and probabilities and capital requirements of the business. You may not be a mathematician, but ensure you have a good idea of how they arrived at these figures.
Stages
Most of what you have been doing is projections into the future. So return to the present and highlight how you are going to start. Then break your future projections into time specific plans.
If you start this year, what are the things you have to start with?
What stage do you expect the business to be by next year, two years, three, years, four, five etc. Which employees are needed to start with on full-time? Which ones should be employed on part time and the business would still be able to run well.
Current assets
Write all the things you have currently to start with…money, building, vehicles, people etc.
Operating plan
Identify the day-to-day operations for the success of the business. If you are going to be rendering this service or producing this quantity of goods, what are the activities that would be performed?
Based on the people you are starting with, who should do what? This will enable you to know the jobs that must be performed. So in employing people, you will be able to tell them precisely what their job specifications are. At this stage, you should be cutting costs as much as possible, so you would not employ someone full time and then find out the work to be done is not something that should take the entire day.
Many small business owners get angry when employees are idle or do not have any work to do for the company a greater part of the day. The employee may find it disheartening if you try to get them to do tasks that were not originally specified in the job description or unrelated to what they were employed to do.
Commit it to God
It is just a plan. So many unforeseen things may happen along the line. You do not know the future, so commit your plans into God’s hands.
Tony nods. “The idea is becoming clearer.”
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