WRITING A BUSINESS PLAN AS AN ENTREPRENEUR
Part of the process involved in entrepreneurship is setting up a plan to strategize and know how operations will be carried out. The first in the process, of course, is the development of ideas that will serve as the building blocks for the establishment of a business enterprise. After that, the planning stage commences and at that point, entrepreneurs might need a detailed written summary of the ideas and other sections that must be looked into. That is when the business plan comes in.
According to Wikipedia, a Business plan is a formal written document containing business goals, the methods on how these goals can be attained, and the time frame within which these goals need to be achieved. The business plan details the form of business, information about the idea, plans on location, a brief analysis of the competition, financial projections and also gives the entrepreneur an opportunity to make future projections concerning the business.
The benefits of this plan to an entrepreneur cannot be over emphasized. It forces individuals to think about the future. Proper planning for the future is highly important to sustain the business and build the start up for success and continuity. Lack of planning will definitely put the entrepreneur in a tough place where he/she will need to make hasty decisions which could eventually lead to losses and a potential exit from the market. The business plan also helps to motivate a loan application where entrepreneurs might need to apply for loans or grants.
In cases where there are deviations in business strategy, it is easier to detect them via the business plan. Mistakes and deviations might prove inevitable. The detailed analysis in the plan will always stand to correct that and keep the entrepreneurs ideas in check. In the next sub heads, I’ll be discussing the various elements of a good business plan and how well to write them.
ELEMENTS OF A BUSINESS PLAN
- FRONT PAGE
This is obviously the first thing to come when writing a business plan. The front page carries the name of the business and the owner, the form of business, and some personal information about the owner which can include address and telephone number of the owner or rather the business line of the enterprise. Though, it is probably the page with the least amount of information or rather of least relevance based on the information that should go into the plan, the front page should look nice and creative.
- CONTENT PAGE
The next up on the list is the content page. Here, all the headings for each element to be discussed in the business plan are listed. Despite being the second page, it is advisable to write this as the last element in the plan because the content on this page has to be listed with their corresponding page numbers.
On this page, the general overview of the business idea is discussed. Entrepreneurs are supposed to give a brief introduction of what the idea entails and give information like the type of business, manufacturing or processing or trading or whatever type of business it is. Also in the introduction, the form of business should be well stated. The form could either be a sole proprietorship venture or a partnership business. The goals and objectives of the business should also be well stated by entrepreneurs.
- COMPREHENSIVE DESCRIPTION OF PROPOSED BUSINESS
This page serves more as a follow up to the introduction page. It discusses the business idea in details and states the processes involved in getting the expected result. Here, a comprehensive outline of the product to be developed is well explained and all relevant processes involved in the walk towards success are expected to be explained in such a way that potential investors will be able to understand the idea easily. Entrepreneur’s information like qualifications and experiences should be added where applicable.
- LOCATION ANALYSIS
Most businesses need a place where operations would be carried out. As a new business, most entrepreneurs would prefer to get a place small where they can temporarily get things done except of course, the business type is one which immediately needs a permanent site. On this section of the business plan, the location should be described concisely. Rental costs and other funds required in the getting the place should also be mentioned. Also, details about proximity to market and also closeness to the nearest competitors and all competitors in the area should be included when writing the location analysis. As a plus, a layout can be drawn to spice up the location page.
- INDUSTRY ANALYSIS
At a particular stage in the planning process, entrepreneurs must have identified the industry their products or services will fall into. When that is done, it is now up to them to answer some key questions on some aspects of the industry which include competition, suppliers, buyers, substitutes and entry condition. For competition, entrepreneurs should list the competitors and strategies that can be utilized to stand out among such competition. Prices should also be discussed. Next is suppliers, where individuals will need to mention the suppliers of inputs to be used during operations and names of alternatives when the main is unavailable.
Buyers are ultimately very important in whatever form of entrepreneurship you get involved with. Describe the target market and the market growth rate pertaining to the industry. Substitutes are also an important part of the industry analysis. Substitute products should be listed together with their prices and how well they’re accepted in the market. Lastly on this page should be the entry conditions required to enter the industry.
- PRODUCTION PLAN
This comes next and it explains the production processes, machinery involved, and arrangements about how things will be stored upon production.
- MANAGEMENT PLAN
This explains the positions in the company. In places where applicable, a list of all the positions in the company should be listed together with the roles attributes to the positions. Brief information, something like a simple resume, can be drafted for each member of staff team. Things like experiences, qualifications and how much value they add to the business should be added when writing the management plan for the entrepreneurship venture. Also, an organizational chart can be drawn for businesses which have a company-like structure.
- MARKETING PLAN
The overall marketing strategy of the venture should be discussed. Strategies in the plan should be viable and reasonable, that is, they must be achievable and be able to convince anyone who reads the plan that things included in the plan can be attainable. Also, the way the plans will be implemented should be well explained.
- RESOURCES REQUIRED
Every single thing required for the manufacture of the products to be developed should be listed and the cost should be put alongside the different resources. For this element, entrepreneurs should explain why each resource mentioned in the list should be listed and how important they will be in the production process.
- FINANCIAL PLAN
This is the last element that discusses a major point in the business. It discusses everything relating to money. Things like balance sheets, income statement, cash flow statement, capital estimate, expenditure and a monthly estimate of how much will be spent. The financial plan also helps the entrepreneur make financial projections for the future of the business. For starters, it could be the financial forecast for the first few years after establishment.
Just like any conclusion, this simply summarizes the contents of the business plan and reasons why the business would succeed. The content of this page should be concise.
Here, all relevant information that helped with the construction of the business plan should be added.
The business plan is a useful tool for entrepreneurs as it has loads of benefits to the both the entrepreneur and the business. It decides how successful the business will be and how well it can grow over a particular period of time. The plan serves as a good source of reference and a bargaining tool for entrepreneurs.