The Business Plan

Any good business idea should originate from an equally good business plan.   The concept of the business plan is that it should; give a full description of the business, outline the features, attributes and benefits of the product or products its offering, identify and analyze the target market and the accompanying promotional plans to reach this market as well as the financial requirements for both start-up and future growth of the business. 

Written properly, this document can become one of the first and most important tools in the business’s marketing plan.

Now, there are those ‘entrepreneurs’ who will try to diminish the importance of the business plan by pointing to their ability to start and maintain a business over a period but without that roadmap providing a sense of direction, outlining achievable goals and some type of vision, the business will record very little growth.   Importantly, a solid business plan does not guarantee success but for entrepreneurs with decent ideas, it can boost the odds.

There are seven major elements of a business plan; the executive summary, market analysis, company overview, organizational and management plan, marketing and sales strategies, service or product line and the financials.

Image borrowed from www.idea2inception.com

Executive Summary

The executive summary should tell the reader exactly what you want.  It should be kept short and businesslike like the summary of a loan application. Within that space, a synopsis of the entire business plan should be provided.  Other key elements to be included are the business concept, financial requirements, the current business position and the major achievements of the business to date.

Market Analysis

This section should illustrate your knowledge about the particular industry your business is in.

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 collect its share of sales. A market analysis also enables the entrepreneur to establish pricing, distribution and marketing strategies that will allow the company to become profitable within a competitive environment. In addition, it gives an indication of the growth potential within the industry. Begin the market analysis by defining the market in terms of size, structure, growth prospects, trends and sales potential.

Company Description

This section describes the nature of the business and lists the needs that are to be satisfied.  It further explains how the products and services to be provided will meet consumer needs.  The company description also lists the specific consumers, organizations and businesses that the business will serve and explains the competitive advantages that will make the business a success.  These include components such as location, expert personnel, efficient operations and the ability to bring value to customers.

Organizational & Management Plan

The organizational and management structure in a business plan covers several areas.  It must include the location of the organization and describe the area in which it works i.e. home country versus international locations.  The plan must also introduce a structure of your organization, present professional experience and achievements of people who are to manage the business.  An employment plan for the next few years must also be presented.  This should cover;

-          How many people are to be hired?

-          What are the skills sets being sought?

-          In what capacity will these persons be hired? 

-          Where had the members of the team worked previously?

-          How much experience in this or other industry do your colleagues have?

-          Is their previous experience relevant to your business/industry?

Marketing & Sales Strategies

This element is the life of your business.  Marketing creates customers and customers generate sales. In this section, define your marketing strategies. Start with strategies, tactics and channels that you have used to create your greatest successes. Next, branch out to others that may be working for your competitors. Remember that this section will be constantly updated based on your results.

Product or Service

The product or service your business will provide should be defined as best as possible.  Ensure that you highlight the features, attributes and benefits of this product or service.  Establish your unique selling proposition. This means you have to show not only how your product is different but also why it is better.

Financials

The placement of this element in no way negates its importance.  In fact without financing, a business remains just an idea.  The financial plan must indicate how the business will be capitalized, whether it is through self-funding or commercial loans.  Clearly state the amount of funding required to start and expand the business.  Very importantly, be realistic.

The most important note however is that the business plan is meant to be revised periodically.  Writing it once and placing it in a file does nothing for the business.  Rework and rewrite the plan to ensure the growth and continued development of your business.