“A goal without a plan is just a wish.” Antoine de Saint, writer and pioneering aviator.
“By failing to prepare you are preparing to fail.” Benjamin Franklin, one of the founding fathers of the United States
This article shall be discussed in two parts. Business Plan is not what one can didactically discuss in one series because it is vast and wide. As a business coach with passion for success, efficiency and productivity, I will be very thorough in treating this salient business topic titled: Writing Actionable Business Plan.
Most businesses have gone down the drains because their promoters or founders did not do background checks of the business they undertook very well partly because the enterprise or business does not have a well-established written out Business Plan. The opening quote by Benjamin Franklin is a ready axiom to back up my postulations- “by failing to prepare you are preparing to fail.”
So, this article is basically for start-ups, entrepreneurs, aspirational individuals and would-be business owners (people switching over quadrants from employees to business owners). I therefore urge you to be painstaking to the gobbets (extracts) that will be marshalled out in this treatise (discourse).
A plan is simply analytic details of something that are intended to be carried out with the intent to achieving a goal. Now that you understand what a plan is, adding business to the prefix makes it Business Plan. A Business Plan is therefore defined as well-documented essential details that will guide the gamut of operations of a yet-to-be established ‘successful’ business from gestation to maturation.
The absence of a well detailed Business Plan is likened to a sea pilot who has lost his compass of navigation and may not be able to sail the ship to safety. The new entrepreneur who wishes to play small or big in the world of business having a comprehensive business plan has scaled above the teething-stage of failure. A Business Plan is a vade mecum or the bible of the business where key goals, procedures and processes; resource allocation and utilization, financial deliverables and endeavours that are supposed to be followed in order to turn business dreams into reality are found.
The importance of a well-written down Business Plan cannot be overemphasized. Every aspect of the business ranging from legal to marketing, financial to operations, production to sales, foundation to structures are well enshrined. Some of the importance would be mentioned here but they may not be exhausted:
– It provides investors with how viable and viral the business would be. Therefore, serving as an investment guide before committing money, time and resources
– It provides information about the legality or otherwise of the business and provides confidence to all stakeholders
– It sheds lights on strategies required to start the business and making it operational
– A Business Plan provides the steps needed to be taken for efficient resource allocation and for achieving business goals and timelines of expected results- timelines deliverables to stakeholders and investors
– Since a Business Plan is the bible of the business, it can always be consulted whenever there are hiccups therefore updating a business plan even when the business is running should be an annual ritual
– It positions the business to attract the needed funding from venture capitalists, business angels, banks and NGOs
– Some Business Plans explain when scale-ups should be done and handled i.e when new assets can be acquired; operations increased to meet new trend in the market, increase in demand, among others
– Business Plan should contain some key aspects of marketing concepts, mix and strategies as they are key boosters and serve as Key Performance Indicators (KPI) to investors
– A well-documented Business Plan defines the business vision and mission as well as objectives. This helps the management to check ultra vires (acting beyond constituted power or objectives or beyond terms of reference)
– Business Plan, if well written helps in aiding management in taking crucial decisions particularly when expectations go awry with reality
– Business plan is also needed to avoid mistakes. In reality, we know mistakes are unavoidable and insurmountable but not big mistakes which can results into big unmitigated risk, leading to loss in profit and eroding capital.
Now that I have been able to convince you of the importance of a Business Plan, there is need to show you what the essential components of a standard Business Plan should contain:
– A glimpse or panorama or snapshot of your business: graphically and in words
– A brief description of the business nay company. Passion and history of the business may not be totally excluded
– Domicile or address of the business with the likely social media presence with which to project the business
– Details of target markets and competitors. Please ignore competitors and focus more on your strengths and opportunities that you intend to grasp.
– The products or services your business hopes to produce or provide and how they are differentiated from others. Trademark, branding and others may be briefly discussed
– For products: you need to show the prototype, so as to convince would-be investors of your readiness to hit the ground running as soon as funds are made available
– The strategies to adopt with respect to sales and marketing must be included in any Business Plan
– All classes of funding and their differentiations and how to manage them as well must be stated; so that would-be investors can have variety of options and what they are to expect at the end of the financial year
– Identify what your cost centres and expense structures should be; at least a 12-month duration is ideal
– Forecasting for at least five years. It is a tacit way of telling investors that you are not closing down soon therefore guarantees Return on Investment (ROI)
A well decrypted Business Plan must be hinged on the following modus operandi or stepping Stones:
– It must have undergone thorough work of research. It must not just be a document put together without adequate verification of facts and figures. It should be a document that is empirical
– It must be able to provide information about company’s profile, ownership, products and services, stakeholders’ interests, among others
– A statement of cash flow of income and expenditure for at least 12 months
– The plan should include well-structured marketing plans with their objectives and deliverables
– The Business Plan must not be rigid in operation and therefore it should be adaptable to all persons who show interest
– A well-documented Business Plan must be hinged on acceptable norms, social graces and above all sound ethical standards that are fair, good and rewarding
In concluding this first series on Actionable Business Plan, I will briefly discuss qualities that a good Business Plan should possess:
– A qualitative Business Plan must fit the needs of the business. It must define the purpose for which it is created. Simply put, a Business Plan must be tailored to the business you seek to establish. Imagine you taking the business plan for a service company and turning it to a production company. They may not entirely have same contents and variables. And therefore, it will not yield result.
– In addition, a good Business Plan must be realistic and not fantasized. In the paragraphs above, I already mentioned that enough research is required to empirically provide facts and figures. Not just cook ups. So, a Business Plan that is not real cannot attract investment and if it does, the promoter might run into trouble waters because projections were based on fantasies.
– For start-ups, a Business Plan should be specific and track records of result achieved. This means that a Business Plan must include set targets, goals, deadlines, scale-up dates, budget, forecast, and metrics, among others
– As mentioned inter-alia, a Business Plan must carry along in itself the responsibility for implementation. It is a vade mecum and as such, it needs to be consulted from time to time, so as to keep the vision, mission and strategies in tune with current realities
– This is the odd one. There are assumptions too in Business Plan. Many may have heard of the term ‘Cateris Paribus’ meaning ‘all other things being equal’. As the planner, you must also factor this in your decision making processes because wishes are different from reality. And always realize this whenever you are making real life decision or face challenges
– Every Business Plan must communicate. The type of communication we talk about here is that, everyone who comes in contact with it should be able to run with the vision and mandate. It should speak clearly and unambiguously to its promoters and executors.
……to be continued
I leave you with the words of Alan Lakein, author of the book titled: “How to get control of your time and life.” “Planning is bringing the future into the present so that you can do something about it now.”