BUSINESS

Business Plan: An Important Tool For New Business

Published

4 weeks ago

Business Plan: An Important Tool For New Business

It is well a known fact that a very high percentage of every new business fail. In fact, statistics have it that about 85 percent of new businesses fails within the first three years in operation. This fact has made many people dread starting a business. However, the advantages of owning a business are so many to individuals, communities and governments that in spite of the risks involved, efforts still are being made daily to start businesses: “Business Plan: An Important Tool For New Business.”

In order to avoid business failure and the dire consequences associated with failure, a lot of precaution ought to be taken before dabbling into enterprise setting. One of such precautionary measures is to prepare a BUSINESS PLAN. In setting up a business, preparing a business plan helps to serve the purpose of one looking before leaping.

Definition

A business plan is a detailed document of intent by an entrepreneur showing the existence of business opportunities and the ideas developed to exploit them with due considerations given to all the relevant environmental elements involve, the merits, risks and the potential rewards inherent in exploiting the opportunities.

In the short term, it may cover three years of operations or less. The plan could be referred to as the game plan or road map. It addresses such questions as; Where are we? Where are we going? How will we get there? It depicts the network of movement or travel plan.

Business Plan: An Important Tool For New Business

Importance of Business Plan

The business plan is important in many ways. These include:

It provides guidance to the entrepreneur in organizing their planning activities.
It helps determine the viability/feasibility of a given venture in a designated market(s).
It serves as a major instrument for identification of sources of finance and soliciting for financial aids from financiers.
It helps in the establishment of accurate controls in the operations of the business.
It brings to the fore the weaknesses and the strengths of the venture within the industry through a realistic self-assessment.
It provides the entrepreneur with a tool for assessing the window(s) of opportunity and their economic feasibility and viability.
It provides the entrepreneur with the vehicle for analysis/assessment of the venture’s opportunities in view of its capacity.

Feature of Business Plan [1]

It should be Concise, Simple and Clear: Given that you will not be there all the time to explain the details to the readers, some of whom may be far away from you, you need to make the plan understandable to any person reading it for the first time. It must sound convincing. Any plan that does not convey the necessary information to the desired (target) cannot be said to have communicated and consequently does not worth its salt.
It should be Accurate and Supported with the Necessary and Convincing Data and figures: The investors and financiers think in terms of money. They want to know what you will spend, what you will earn and what profit you will be making. Your underestimation or miscalculation of your potential sales or degree of competition is likely to make your predictions fallible. Always underestimate your likely earnings for sales rarely work out in the real market economy as optimistically as they initially appear on paper. However, always assume the worst when it come to your expenses – for the unexpected drain on your finances is capable of pushing you out of the business. Conservation is the rule in prediction of profits.
The Plan should be Realistic and Truthful: Financiers at some time in their careers would have been presented with business plans that are simple, profitable but not feasible. An experience entrepreneur in Nigeria in the financial market who predicts that his business will compete with First Bank Nigeria Plc or Union Bank Nigeria Plc within months will be regarded as time wasting crank that has no good business plan or one that contains a blatant lie.

Writing of a Business Plan

The length of time taken to develop a business plan is usually about three weeks depending on the experience and expertise of the entrepreneur. However, the nature of this investment or proposed business to a very great extent influences the time required to do a good business plan. A good business plan needs to be comprehensive enough as to give a potential investor a complete picture and understanding of the proposed business. It of course, will enable the entrepreneur to put in writing his thinking and views about the business. After all, planning is more an art of writing than just thinking.

A good business plan follows this format:

Introductory Page: This refers to the title page or cover page. It provides a brief summary of the plan. It sets out the basic concept that the planner intends to develop. It brings to the fore the amount of investment contemplated by the budding entrepreneur.
Executive summary: The executive summary presents a summary of the essential point in the business plan. It is usually about three to four pages. It serves as a stimulant to the potential investor. It highlights in a precise, concise and persuasive manner the key points of the business plan. It includes the nature of the business, capital requirements, market potentialities, and other necessary logistics. It is the degree of conviction exhibited by the executive summary that will determine if the entire plan is worth reading at all.
Industry analysis: The entrepreneur while evaluating his envisaged establishment on a number of performance index also needs an analysis of the industry. This will give him an overview of the industry he is going to do business in, including the historical analysis of the industry and a forecast of the likely future trend. He should know the customers, his competitors, the various segments of the market and the specific segment he intends to target.

Critical issues to consider in the analysis include the underlisted:

The total industry sales over the past five years
The anticipated growth in the industry
Number of new firms that have joined the industry within the last three years
New products that have recently been introduced in the industry
The leading and recent competitors
How will the proposed business operation be better than the leading or recent competitors?
What is the status of the sales value of the major competitor, steady, growing or declining?
The weaknesses and strengths of the competitors
The profile of the customers
How does the customer(s) profile differ from that of the competitor(s)

The venture description: This provides a comprehensive overview of the goods, services and operations of the venture. The size and the scope could be ascertained from this holistic picture including the location. To a great extent, the success of a business could be dependent on its location.

Basic issues to be addressed by the venture description are as contained below:

What products and/or services does the business offer to the market?
Description of the product/services
State the location and site of the business
State whether the building is old or new
Is the building owned or leased
Why is this building, site and location right for the business?
What skills or personnel including additions will be needed to run the business effectively?

Production or Merchandising Plan: If the intended outfit is a manufacturing business, this section will be entitled production Plan and describe the entire manufacturing process. Where an aspect of the process is to be contracted, this should be stated including the names and locations of such contractors, why such contractors were selected, the contract fees and the contracts that have been completed if any. The production plan should prescribe the physical plant layout, the machinery, the equipment, the raw materials, suppliers’ names and location terms and future capital equipment requirements.

To intending investors this picture enables them to come to terms with the financial needs of the budding venture. However, for retail or service business, this is titled Merchandising Plan. The merchandising plan describes the process of procurement of the merchandise, the stock or inventory, control system, and the storage needs of the business.

Marketing plan: Marketing plan is an important part of a business plan. It brings to the fore, the marketing condition and strategies for distribution, pricing and promotion of products. Marketing has to do with process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange that satisfy individuals and organizations objectives. Marketing plan is considered vital to potential investors because in clear terms the goals of an organization and strategies they intend to use to achieve it.

Marketing plan attempts to answer this question:

Who are the firm’s customers, their location, they are buying abilities, whom they personalize and their rationale?
The promotional and advertising strategies of the firm and its effectiveness?
Price changes in the markets, the initiators and their reasons?
Attitudes of the market towards competitive products
The distribution channels and their functionality?
Who are the firm’s competitors, their location and address, what are their strengths and weaknesses?
What marketing techniques are used by the lists and the most successful competitors in the market?
What is the mission core objective of the firm? what are their philosophical dispositions vision statement?
What are the company’s strengths and weaknesses?
What are the firm’s production capabilities by products?

Organization Plan: Planning helps to critically assess the goal to see if it’s realistic. It facilitates decision making and allows setting a time frame by predicting when the company can achieve its goal. Organization plan is an integral part of business plan, that describes ownership structure of the business. It also shows the ratio of a proportion of ownership of the business among the co-entrepreneurs. It gives the investors understanding of who controls the business and his position in the organization.

Key questions in organizational plan:

1)What is the form of business ownership so partnership or corporation?

2) If partnership, who are the partners and the content of partnership did?

3) If incorporated –

Who are the major shareholders and how much shares do they have?
What type and how many stock of voting and non-voting have been issued?
Who are the directors?

4) Who has the Cheque signing authority and control?

5) What is the background of each of the members in the management team, and what are the roles and responsibilities of each of them?

6) What are the salaries, bonus and other forms of payment if any for each member of the management team?

The Financial Plan: The financial plan is the monetary (Naira) expression of entrepreneur’s operational plans. Financial plan paints a comprehensive picture of your current finances, your financial goals and any strategies you’ve set to achieve those goals. It’s a financial projection that enables the entrepreneur to determine the economic viability and feasibility of the envisioned establishment.

A typical business plan is made up of four statements;

1) Cash budget

2) Income statement

3) The balance sheets

4) Profitability (break-even charts).

Causes of Failure of Some Business Plans

Some entrepreneur rush into business without establishing a need gap they intend to close.
Goals set by some planned actions are not specific or measurable and sometimes unreasonable
Lack of insight into the threats available in the business segment.
Lack of experience in the business the entrepreneur wants to venture into.

Conclusion

Companies of all sizes can benefit from having a business plan. But when a business develops and its environment changes, so should its business plan. Therefore, business plan should be viewed as a dynamic document that will change as your company does, rather than as something that is static.

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BUSINESS

Resilient Future: The 2023 West Africa Property Investment Summit

Published

3 days ago

softchris4ol

Charting a Resilient Future: Insights from the 2023 West Africa Property Investment Summit

In a significant gathering of real estate influencers, the West Africa Property Investment Summit 2023, which took place on Wednesday, 23rd November, brought together leading figures from Kenya, Ghana, South Africa, and Nigeria. Under the theme “Rewriting the Narrative: Positioning & Strategies for the Future,” the summit served as a vibrant forum for in-depth discussions and strategic planning, aiming to shape the trajectory of West Africa’s real estate landscape: “Industry Leaders Chart Course For Resilient Future At The 2023 West African Property Investment Summit.”

Resilient Future: The 2023 West Africa Property Investment Summit

Resilience in the Face of Macroeconomic Challenges

One of the key speakers, Mr Tola Akinhanmi, the Head of Real Estate Finance at Stanbic IBTC, took centre stage to address the challenges posed by the current macroeconomic environment. Despite grappling with inflation, exchange rate volatility, and fluctuating interest rates, Akinhanmi’s message was one of resilience. He underscored the real estate sector’s intrinsic strength, characterizing it as a long-term asset class that provides essential business infrastructure supporting people’s livelihoods, work, and recreation. Akinhanmi highlighted Stanbic IBTC’s commitment to working closely with sponsors, understanding assets, and structuring solutions that ensure stability, allowing these assets to remain relevant through various economic cycles.

Optimism for 2024: A Balanced Outlook

Oladapo Runsewe, the Projects and City Reports Lead at Estate Intel provided a positive outlook for 2024. Citing statistics from the Nigerian Bureau of Statistics that indicated an increase in the real construction sector’s contributions to the GDP in the last quarter, Runsewe foresaw a balanced and positive effect on the market. He emphasized the inevitability of construction and development continuing, driven by the ongoing demand for housing and real estate investments. However, Runsewe highlighted the imperative for collaboration, urging industry participants and the government to join forces on a larger scale to address the substantial housing deficit, particularly in urban centres like Lagos.

Sustainability as a Driving Force

Temilola Shonola, Head of the Edge Program at the International Finance Corporation (IFC), brought attention to the importance of sustainable building practices. Shonola urged developers to embrace green building, dispelling the misconception that it is an expensive endeavour. She introduced the IFC’s free App designed to simplify the green certification process, making it accessible for builders looking to contribute to environmental sustainability. Shonola stressed that more of the market need to adopt green building practices, not only for environmental reasons but also as a means to reduce utility costs and ensure long-term impact.

Navigating the Commercial Real Estate Cycle

Pepler Sandri, the Director of Capital Markets at JLL, delved into the complexities of the commercial real estate cycle. Acknowledging the sector’s challenges and the impact of the global COVID-19 pandemic, Sandri painted a picture of recovery and resilience. He noted that Nigeria, like many other countries, faced unique macro issues affecting its recovery. Looking ahead, Sandri expressed optimism as interest rates stabilize, predicting a potential recovery in the next 6-12 months in global developed markets. However, he cautioned that Nigeria might experience a longer recovery period, echoing sentiments from Stanbic’s chief economist, who suggested a year or two before a strong trajectory toward recovery becomes evident.

Conclusion: A Call for Collaboration and Sustainable Growth

The West Africa Property Investment Summit 2023 provided an invaluable platform for industry leaders to share insights, strategies, and collaborative approaches to propel the real estate sector forward. As the summit concluded, attendees were left with a renewed sense of optimism and determination to navigate the ever-evolving landscape of West Africa’s property market. The resounding message from the summit echoed the need for collaboration, sustainability, and strategic planning to ensure a resilient and prosperous future for the region’s real estate industry. Read More

BANKING

How Kora Payment Link Helps Online Businesses To Grow

Published

2 weeks ago

softchris4ol

How Kora Payment Link Helps Online Businesses To Grow

The advent of technology with the COVID-19 pandemic has increased the adoption and popularity of online businesses. This is owed to the ability to operate small and medium-sized businesses from anywhere across the globe – which alludes to the fact that the world is now a global village: “How Kora Payment Link Helps Online Businesses To Grow.”

Therefore, there has been a meteoric increase in the number of online shoppers seeking products or services from the available businesses in the digital space.

This is evident in the emergence of e-commerce platforms that operate as an online marketplace for both buyers and sellers. It is also playing out in social commerce through the use of platforms like Facebook, Instagram, or X (Twitter) that people continuously use for their shopping experience.

By and large, online business is today a thriving venture that continues to generate a staggering income for businesses and the local economy.

One of the major perks of online businesses is the flexibility of their payments, such that merchants can offer a range of payment methods. The most common options are bank transfers or card payments, in which businesses provide their customers with bank account details to pay.

But as innovation continues to meet the evolution of online businesses, Kora is making payment strategy seamless for both merchants and their customers. This is through the Kora Payment Link.

How Kora Payment Link Helps Online Businesses To Grow

What Is Kora Payment Link?

A Kora Payment Link is a clickable link that enables business customers to complete a purchase. This is offered as a digital link, which can be used across various social media platforms, websites, or other messaging tools.

How this works is that a customer is directed to a merchant’s online checkout page to complete their transaction anytime they use the Kora Payment Link. This link can be used for both a single transaction, as in a customer invoice and for multiple transactions, as a buy button on social media platforms.

It should be noted that the Kora Payment Link facilitates simple online payments as it does not require a website or code to create and use the link. Therefore, online businesses can easily create a payment link that takes customers directly to the online checkout page of the merchant.

Furthermore, the Kora Payment Link can be used for fundraising, donation, and subscription purposes.

Benefits Of Kora Payment Link To Online Businesses

Accept Payments Anywhere

You can receive payments from your customers across the globe through the payment link that you can easily share on social platforms or websites. This is also a “call to action” strategy to compel your customers to complete their purchase with you without delay.

Keep Payments Simple

Customers do not have to log into a mobile app or website before paying. This is because they can easily click the link anytime and from anywhere to take them to the checkout page to complete their purchase.

Flexible Payment Options

Kora Payment Link provides online businesses various payment options tailored to their preferences. This can be bank transfers, payment cards, or other digital payment methods like Apple Pay or Google Pay.

Therefore, it is the volition of online businesses to design their payment links towards their preferred payment options. Hence attracting customers to complete their purchase with the knowledge that they can use certain payment gateway.

How Online Businesses Can Use Kora Payment Link

Here is a quick step for using the Kora Payment Link:

Create a Kora account and log in.
Navigate to “Payment Link.”
Enter your details and customize your link with certain preferences.
Preview your link and activate it.
Share your Kora Payment Link on social media platforms and other messaging tools.
Start receiving payments.

Conclusion

We can not overemphasize the importance of having a sustainable payment strategy for online businesses to attract more customers who would complete purchases with them. That is why Kora introduced a payment link which merchants can easily share with their customers for transactions.

Kora Payment Link is easy and free to use, and you can get started by creating a Kora account now. [site]

BANKING

How Kora Improves Cross-Border Transactions For Businesses

Published

2 weeks ago

softchris4ol

How Kora Improves Cross-Border Transactions For Businesses

Cross-border transactions are increasingly becoming popular without the concern of waiting days or transfer fees. This is due to the emergence of a fintech company like Kora, which makes cross-border payments simple, cheaper, faster, and easily accessible for businesses: “How Kora Improves Cross-Border Transactions For Businesses.”

A BCC Research of January 2023 revealed that the global cross-border payments market is expected to grow from $176.5 billion in 2021 to over $238.9 billion by 2027. The vehicle for this growth is fintech disruptors like Kora, which offers a digital platform and innovative messaging and settlement layers to improve cross-border business transactions.

How Kora Improves Cross-Border Transactions for Businesses

Ways Kora Is Changing Cross-Border Transactions For Businesses

Improved Convenience

Kora enables you to make transactions fully on its platform, unlike the traditional method of visiting physical branches. This allows you to use the platform anytime and from anywhere without a glitch.

A simple user interface and streamlined onboarding characterize this platform to simplify cross-border transactions. It means you can use Kora to receive funds from your customers or transfer with its bulk payout, multicurrency payout, or mobile money options.

Speed And Efficiency

Kora enables instant or same-day cross-border transactions, which is in the converse of the traditional settlement layers that can take days. Therefore, businesses can complete their transactions in less than one hour on this platform. You do not experience any form of delay in sending or receiving funds on this platform, irrespective of the amount. This is due to its high scalability and optimization of Kora.

Lower Fees

This platform eliminates the meddlesome of third parties like banks and agents in the cross-border transfer chain. As such, it offers a relatively low transaction fee, which is often less than 1% of the transfer amount. This is a major perk of Kora compared to its contemporaries.

Enhanced Transparency

Kora offers an advanced tracking dashboard that provides real-time access to your funds and the estimated delivery timelines. This is because the platform has state-of-the-art blockchain technology that provides complete transparency in the tracking of your funds. It helps to reconcile your income with expenses.

Security And Compliance

Kora employs features like two-factor authentication (2FA) and other security measures to add extra security layers and protect user transactions and funds. This platform is in total adherence to global compliance standards to protect users’ funds and data.

Reduced Foreign Exchange (FX) Risk

Cross-border transactions often involve multiple banks and currencies whose operations result in significant foreign exchange fees and currency volatility that create discrepancies between transferred and received funds.

This is largely the case when businesses in a particular country receive payments from another country.

However, Kora reduces foreign exchange risks that are associated with cross-border transactions by routing funds efficiently at the best exchange rate. On the other hand, Kora users can avoid foreign exchange concerns by using the multicurrency account on the platform that allows them to receive payments in currencies other than their local currency.

Conclusion

Cross-border payment is important to businesses as it enables their growth in the global market. But as digital payments continue to gain traction, there is a need for businesses to know how to leverage the technology to boost sales.

One major platform you can use for your cross-border transactions with your customers is Kora. This is due to the simplicity and scalability it offers you.

You can also start making cross-border transactions seamlessly when you create a Kora account now. [site]