Most startups underestimate the usefulness of a business plan, it is termed as being a waste of time but just as one can have a house built without a plan. At the of the day, only to wish that you had erected few or better structure. However, now it looks like you have become more confused than when you first started.
In our past articles, we have discussed all of the processes leading to a business plan, so WHAT IS THIS BUSINESS PLAN EVERYONE IS TALKING ABOUT?
A business plan is a formal document which serves as a guide for your business, it outlines the goals, directions on how to carry out these goals, time frame set for the achievement of the goals. Etc. A business plan is not always that lengthy, complex scary document, depending on your target audience, it can be simple or complex as you want.
A business plan serves the following purposes:
1. It helps to document how to tackle major challenges
2. It helps to pitch your business idea to potential investors
3. It helps to articulate the vision for the business
Most start-ups are set back a great deal without funds, makes one wonder if the business is not lucrative enough, but when a business owner is unable to show workings and convince an investor, how do he or she gets funded? A practical example I will share with us is this Tony Elumelu Foundation, an initiative which comes up yearly where thousands of people are expected to sell their business and the real ones are picked and funded. There are initiatives like this that are ready to help startups, be sure to be prepared should opportunities come around. Your Business plan can either break or make your Business, take time to develop a comprehensive one.
Now to the heart of this article, to develop a business plan, the following will make it much easier
1. Keep it short
Business plans should not be cumbersome to read, make it concise, this would be of advantage to you since you would be updating it anyways and also to an investor or whoever you want to have a read, no one would enjoy reading 100 pages of plan that would have fitted concisely in a page.
2. Know your audience
You know the saying when in Rome behave like the Romans? I believe it is applicable here, knowing your audience implies you have to communicate the plan in the language that is understandable to them, let us imagine that certain investor you are trying to pitch an idea to is a non scientist, assuming your business plan is science or tech base, you are not expected to communicate with all of the scientific terminologies you would use if the investor was science oriented. You need to adapt and be at the same level as him. In fact the popular saying applies here “You must be able to explain it to a 10 year old”. Ask your self can a 10 year old understand this concept, if not its time to go back to the drawing Board. Your Buyer Personas must be reflected here.
3. Don’t get overwhelmed
Do you imagine that every business out there had it all planned out right from inception ? I am here to tell you the answer is no, no one started out as a business expert, we all learn as we go. As long as you are passionate about your business, planning it will comes easy. (Well, not always).
4. Inclusion of important details
Details such as financial statement is important in a business plan you want to pitch to the bank or investor. Other details that should be included are:
• An exclusive summary of the business, an overview of the plans involved in the business.
• The reason for your market, whose needs are being met, the target, the competitions. Strength, weakness Opportunities and threat.
• The plan execution: How you intend to package or sell your products and services, includes different package depending on the type of product you sell. You could have Basic services, standard, premium or VIP etc.
• Marketing strategy: Too many a times startup founder get too excited and they forget to committee enough funds to marketing plan. Up until now, I still get emails from Facebook through google ad asking me to open a new account. You will wonder why the tech Giant connecting the whole together is still advertising? Marketing and sales go hand in hand, so is advertising and visibility. Don’t create great products only to start asking for free promotion from family and friends. Do your homework.
• Financial plan: Money, Money Money If there is any aspect of running a Business that I try to avoid is complex financial. However, I have found so much peace in delegating. This is not just about your BEP (Break-even analysis) This is important because when you are starting off you should know the point when your Business will start to make a profit. Otherwise, you are just running a Business rate race. Also remember you have salaries, expenses and business running cost to pay. So every dollar that comes into your business must and should be accounted for.
• Team and company: When writing a JD (Job description, remember how much time and details goes into this exercise, their responsibilities, educational qualification etc. Knowing who you need, helps you eliminate hiring for the wrong role or . A lot of startup founders always ask this question, should I hire a product manager or a marketing manager? If your Business can afford both, that is great. However for safety purpose you might want to hire someone with at least both skills.
So Here is a summary of what should be included in your Business plan
1) Executive Summary
2) Company Summary
3) Products and Services
4) Complete Market Analysis
5) Target Market Segmentation
6) Management Summary
7) Complete Financial Plan
Complete Financial Plan should include;
1) 5-year Sales forecasts
2) 5-year Income statement projections
3) 5-year Balance sheet
4) 5-year Cash flow statement
5) Break-Even Analysis
Don’t forget to include
-Quality Data (For Market Research)
If you need a Professional, comprehensive Business Plan please contact us, we are here to help you.
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