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  • BUSINESS PLAN – Part one

    Introduction

    Business plan is a pre-requisite for every entrepreneur that wants to succeed in business. It has been said that when you fail to plan, you plan to fail.

    Business plan is translating your idea into a workable document. It is an important roadmap on your journey to success in business.

    The whole essence of business plan is to force you to think and prepare for every aspect of the business. It is a very strategic document that gives an organized structure to your business ideas.

    It is a document that should also be guided jealously.

    Why is Business Plan Important?

    • It helps you as an entrepreneur to keep focus on your business objectives.
    • It is a document that outlines the prospects and potentials in your business
    • It help you attract third party investors and outside finance for your business
    • It is also a management tool because it serves as a guide on how to manage the company for growth.
    • It also helps to anticipate and plan for change(s) in your business.
    • It helps to give you direction in executing and carryout you business.
    • It also helps you to sell your business idea to potential supporters and financiers especially, friends and family members.
    • It also makes the staff and management to commit to the goals and targets set.

     

    Who Needs A Business Plan?

    • The entrepreneur
    • The banks
    • Partners
    • Family and friends
    • Venture capitalist/ Angel investors
    • Business helpers e.g your consultants, Lawyers, Accountants etc.
    • Management team.

     

    When to Write a Business Plan

    • Start – up businesses
    • Expanding to a new market
    • Developing new product
    • Re – alignment of business operation
    • When the old business plan is out of date
    • Existing business without business plan

     

  • Small and Medium Scale Enterprises: Business Plan

    Small and Medium Scale Enterprises: Business Plan

    Business plan is a pre-requisite for every entrepreneur that wants to succeed in business. It has been said that when you fail to plan, you plan to fail.

    Business plan is translating your idea into a workable document. It is an important roadmap on your journey to success in business.

    The whole essence of business plan is to force you to think and prepare for every aspect of the business. It is a very strategic document that gives an organized structure to your business ideas.

    It is a document that should also be guided jealously.

    Why is Business Plan Important?

    • It helps you as an entrepreneur to keep focus on your business objectives.

    • It is a document that outlines the prospects and potentials in your business

    • It help you attract third party investors and outside finance for your business

    • It is also a management tool because it serves as a guide on how to manage the company for growth.

    • It also helps to anticipate and plan for change(s) in your business.

    • It helps to give you direction in executing and carryout you business.

    • It also helps you to sell your business idea to potential supporters and financiers especially, friends and family members.

    • It also makes the staff and management to commit to the goals and targets set.

    Who Needs A Business Plan?

    • The entrepreneur

    • The banks

    • Partners

    • Family and friends

    • Venture capitalist/ Angel investors

    • Business helpers e.g your consultants, Lawyers, Accountants etc.

    • Management team.

    When to Write a Business Plan

    • Start – up businesses

    • Expanding to a new market

    • Developing new product

    • Re – alignment of business operation

    • When the old business plan is out of date

    • Existing business without business plan

    A good Business Plan must contain the following:

    • Executive Summary

    This is the summary of the entire Business Plan. It covers all the key points and is usually prepared last. This is the part of the Business Plan that outside parties will review first before looking at the entire plan.

    It is always important you capture all the points in the executive summary

    • Company Description

    This section shows a detailed description of your company. It covers your company’s mission, vision, history, current status and future plan.

    • The Product or Services

    This section deals with product/services features, components and quality. The issues of product or service cost, how the product will be produced, quality control consideration and after sale service must be addressed in this part of the business plan.

    All the regulatory requirements and approval consideration must also be properly addressed here.

    • Management and Organization

    The make-up and experience of the entire management must be addressed here. As we know the success of any business has a lot to do with the people running the business. The entire personnel plan should be addressed here. Other business helpers such as advisers and consultants should be mentioned also.

    • The Market Analysis

    Here you must define your target market and identify market segments. You must know the customers that will buy your products or services; you must mention the size of your market and whether it is a growing market, seasonal or shrinking market.

    • The Industrial Analysis

    You must know your industry and the factors that may affect sales in the industry.

    You should be able to describe the key “success factors” in the industry and the various opportunities in the industry.

    You must also know the various threats in the industry.

    • Competition Analysis

    You cannot compete effectively in an industry, if you don’t know your competitors. In this section you must mention your main competitors especially in your locality.

    You must mention the reasons your customer will buy from you instead of your competitors. You must mention the strength you have compared to your competitors.

    You must also mention your weakness and how you are addressing those weaknesses.

     • Business Risk and Mitigation

    Here you must mention the main risks that could affect the success of your business. You must also mention how you plan to prevent or minimize the risk.

    • Financial Plan

    The financial plan must include the financial forecasts such as sales and revenue forecasts, cost or expense forecast, cash flows and balance sheets. You must also compute your breakeven point here.

    It is advisable to have your financial projections for at least two years.

    •Omojuwa is the Managing Consultant Pathfield Consulting, info@pathfieldconsulting.com, tomiomojuwa@gmail.com

  • Tips & Traps for writing an effective business plan

    Tips & Traps for writing an effective business plan

    BOOK REVIEW

    Author: Greg Balanko-Dickson
    Publisher: McGraw-Hill
    Reviewer: Goke Ilesanmi

    Having an effective business plan is critical to the success of any business. That is why we are X-raying this text entitled “Tips & Traps for Writing an Effective Business Plan”. It is written by Greg Balanko-Dickson, a third-generation entrepreneur, Licensed Professional Business Coach and founding member of the Professional Business Coaches Alliance.

    According to the author, whether you want to start a business or grow one, buy or sell one, attract investors or obtain a loan, fine-tune your operation or restructure it, attempting to do it without a well-crafted business plan is like going to the sea without a compass.

    This text is divided into five parts of 27 chapters. Part one is generically christened Introduction and contains two chapters. Chapter one is interrogatively entitled “What is a business plan? Why do I need a business plan?” In the words of Balanko-Dickson, “A business plan is an instrument used to document the intent and plans of the owner regarding every aspect of the business. The document itself can be used to communicate plans, strategies, and tactics to your managers, partners, and investors.”

    This author adds that business plan has an equation structure of Goals + Research+ Strategy = Business plan. Balanko-Dickson educates that a business plan is much more than notes on a napkin or to-do list and is a roadmap to guide the business, its owner(s), and its employees on the journey to success.According to him, developing a detailed business plan will provide you with an opportunity to shape a powerful business development strategy, whether your goal is to get financing to start a business; get financing to expand your business; be more organised and increase your success level; identify the value of your business and prepare a plan for selling your business, etc.

    This author identifies ten sections of a business plan as industry analysis; market analysis; products and services; business description; marketing strategy; operations and management; financial plan; implementation plan; contingency plan; and executive summary.

    Chapter two is based on the subject matter of understanding the process and getting prepared. Here, Balanko-Dickson discloses that the benefits of writing a business plan are often misunderstood. “Yes, a business plan will help you get the money you need when you’re starting a business. But it will also help you make an existing business more effective,” educates this author.

    In part two having a general thematic focus of the ten sections of a business plan and containing ten chapters (chapters three to 12), Balanko-Dickson discusses concepts such industry analysis; market analysis; products and services; business development; marketing and sales strategy; operations and management; pro forma financial plan; implementation plan; contingency and emergency plan; and executive summary.

    Part three is summarily tagged “Writing a business plan in 30 days” and covers three chapters, that is, chapters 13 to 15. Chapter 13, like the whole part, is entitled “Writing a business plan in 30 days”. This expert says writing a business plan can be a time-consuming task. You are planning your business for the next three years, and you want to give it the attention it deserves.

    Balanko-Dickson says the more familiar he is with the industry and market, the faster he can get the plan finished. He adds that you can easily minimise distractions in writing your business plan by getting away from the business to write your plan. This author educates that if you are unable to get away from the business, choose a quiet period of the day to work on your business plan.

    In chapters 14 and 15, this author discusses common mistakes in writing a business plan and working with professional advisers.

    Part four is based on the broad subject matter of special considerations for specific businesses and covers ten chapters, that is, chapters 16 to 25. Here, Balanko-Dickson beams his intellectual searchlight on concepts such as business planning for investors; business planning for a retail business; business planning for a manufacturing business; business planning for a service business; business planning for consultants and professionals, etc.

    Part five, the last part, is generically labelled “Getting the money you need” and contains two chapters, that is, chapters 26 and 27. Chapter 26 is entitled “Applying for a business loan”. According to Balanko-Dickson here, small business loans can be used for a variety of purposes. For example, a business loan can help you buy a business, start a new business and expand your business. He says you will deal directly with the bank’s loan officers and major small business loans are reviewed by loan committees. The author educates that loan officers are not part of a loan committee.

    In chapter 27, this expert discusses the concept of getting funding from investors, family and friends.

    Stylistically, the language of this text is simple, yet standard. The presentation is unique in that it is didactic and logical, while the text is embroidered with graphics to reinforce readers’ understanding. Balanko-Dickson includes a “Tip and Trap” section typified by graphical thumb/hand manipulation in every chapter, where he injects additional information and guides readers.

    However, the whole of part three is already summarised in chapter one, meaning that chapter one could have been harmonised with part three. Probably this author deliberately uses this style of repetition to ensure long memory on readers’ part.

    On the whole, this text easily passes for a masterpiece on business development. It is highly recommended to all existing and prospective entrepreneurs. It is simply fantastic.

  • Implementing business plan and strategy in your workplace

    Implementing business plan and strategy in your workplace

    Planning is very critical to business success. So also is strategy. In short, these two words are believed to be interchangeable or at least go together like Siamese twins. Little wonder that we have the phrase “strategic planning”. What is a business plan? A business plan is a formal document that articulates the direction of a business in a bid to accomplish its most important goal, that is, profitability. Profit does not come by accident.
    So, by writing and following a business plan, you can definitely increase the possibility of achieving profitability. Whether you want to start a business or grow one, attract investors or obtain a loan, attempting to do it without a well-composed business plan is like a stranger going to a place without prior direction. Or better still, it is like a ship without a rudder (which controls its direction). Let me also illustrate it as a motivational speaker. It is like having a dream without an action plan. The dream cannot become a goal that can be achieved.

    Research

    To be successful in business, you need to research and write your business plan; master the key components of a successful plan; understand all your financing options; and streamline the process using easy-to-use templates.
    A business plan is used for many purposes, that is, as a development tool, a management and planning guide, a mission statement, a sales document, etc., and is read by several different audiences. Therefore, you need to structure the components of your business plan for the greatest impact; anticipate all questions that business plan reviewers will ask; and critique and package your business plan for winning results.

    A professional

    Balanko-Dickson, a third-generation entrepreneur, Licensed Professional Business Coach and founding member of the Professional Business Coaches Alliance, who has clients throughout Canada, the United States, South Africa and the United Kingdom says developing a detailed business plan will provide you with an opportunity to shape a powerful business development strategy. He stresses that a business plan has an equation structure of Goals + Research+ Strategy.

    Paradox

    In what seems like a contrary and paradoxical view, Roger Martin, dean of the Rotman School of Management at the University of Toronto, Canada and author of Playing to Win: How Strategy Really Works, says, “I must have heard the words we ‘need to create a strategic plan’ at least an order of magnitude more times than I have heard ‘we need to create a strategy’. This is because most people see strategy as an exercise in producing a planning document. In this conception, strategy is manifested as a long list of initiatives with timeframes associated and resources assigned. Somewhat intriguingly, at least to me, the initiatives are themselves often called strategies. That is, each different initiative is a strategy and the plan is an organised list of the strategies.”

    Distinction

    Martin says strategic plan of this sort is not different from a budget. He stresses that many people with whom he works find it hard to distinguish between the two and wonder why a company needs to have both. Martin adds that he thinks they are right to wonder this way.
    In his words, “The vast majority of strategic plans that I have seen over 30 years of working in the strategy realm are simply budgets with lots of explanatory words attached. This may be the case because the finance function is deeply involved in the strategy process in most organisations. But it is also the cause of the deep antipathy I see, especially amongst line executives, toward strategic planning. I know very few who look forward with joy to the commencement of the next strategic planning cycle.”

    Breaking free

    We need to break free of this obsession with planning if must make strategy more interesting as well as different from a budget. Strategy is not planning — it is the making of an integrated set of choices that collectively position a firm in its industry so as to create a sustainable advantage relative to competition and deliver superior financial returns, argues Martin. He adds that once this is made clear to line managers, they will recognise that strategy is not just fancily-worded budgeting and they get much more interested in it.
    The fact remains that it is difficult to execute a strategy without initiatives, investments and budgeting. But Martin is quick to add that what you need to get managers focused on before you start on those things is the strategy that will make these initiatives coherent. “That strategy is a singular thing; there is one strategy for a given business — not a set of strategies. It is one integrated set of choices: what is our winning aspiration; where will we play; how will we win; what capabilities need to be in place; and what management systems must be instituted?” he submits rather rhetorically.
    Useful guide

    That strategy guides you as to what initiatives are sensible and capable of producing the desired result. Martin says such a strategy actually makes planning easy. There are fewer fights about which initiatives should and should not make the list, because the strategy allows you to easily determine what is important or not. According to him, this conception of strategy also helps define the length of your strategic plan.

    Last note

    There is no disputing the fact that this paradoxical analysis and definition of strategy can be rejected by those who have spent all their lifetime developing traditional strategic plans, especially that there seems to be a thin line of meaning between planning and strategy as explained by Martin.

    •GOKE ILESANMI, Managing Consultant/CEO of Gokmar Communication Consulting, is an International Platinum Columnist, Certified Public Speaker/MC, Communication Specialist, Motivational Speaker and Career Management Coach. He is also a Book Reviewer, Biographer and Editorial Consultant.
    Tel: 08055068773; 08187499425
    Email: gokeiles2010@gmail.com
    Website: www.gokeilesanmi.com

     

  • Seven-step business plan

    Seven-step business plan

    It is a well-known business fact that you need to conduct research and write your business plan if you want to be successful in business. In short, any attempt to start a business without a good business plan through feasibility study shows lack of business direction. It is in the light of this that the publication of this text titled: “Seven Step Business Plan”, written by Ms. Sheila Holm, a respected business-management expert is a welcome addition to business management literature.

    Holm says before preparing this text, she had cycled and recycled clients to every bookstore to work through every business-planning book option. She adds that the clients purchased many books but still wanted more help. Holm discloses that to make it easy and affordable for more business owners to receive help, she started conducting a series of seminars to help owners and their management teams develop their business plans within a seven-step format based upon their dreams and goals.

    Holm says the outline of the seminars developed rapidly into a seven-step, one-page form for quick and easy review while updating the business plan according to each change and adjustment to the goals. The author educates that having a business plan adds value to the bottom line of a business.

    Structurally, this text is segmented into seven chapters. Chapter one is entitled “structure”. Holm educates here that immediately in your own words, you should begin writing a statement about “how it is around here” according to how you are going to proceed with your business.

    She says many owners, even after they open the doors and operate their business, proceed without a clear statement about their business: how it will meet the needs of customers or how their business relates to the industry. The author adds that their dreams and goals are not in writing or in focus yet. She stresses that clarity is helpful and has a positive impact upon your bottom line.

    Chapter two is based on the subject matter of placement. Here, the author says the biggest mistake owners make is to think they have the most unusual business idea. Holm stresses that she is always concerned when a client says she should hurry up and develop a business plan before someone else steals the idea.

    She reveals that ideas are out there and we do not have the market cornered on any idea. The author adds that only very few people with ideas will proceed and develop the ideas into a tangible entity. The expert submits that now that you have set out to pursue your idea, it is important that you continue to follow and recognise the needs of the market that initially inspired you. She explains that if you understand the placement of your business within the industry, it is as important today as it will be that every day you are in business.

    In Holm’s words, “Too many businesses forget to stay current regarding the trends within the industry and the business, market in general. The business process is a fluid process, so do not plan on making a decision regarding placement and then setting your business idea into a concrete base and forcing it to hold up to this statement for more than a few weeks. This is why I absolutely recommend reviewing the Seven Step Business Plan form each month.”

    She illuminates that this phase of planning your business is a good time to meet and interview experts. On the aspect of customers, Holm says if you think everyone is your customer, take a second look at the facts about your business and what it will provide to the community. The author educates that defining your customers will assist you in the process of matching your business with the top competitors in your industry.

    Chapter three is on the concept of leadership. Holm says the most important statement you can make about your business is the statement you make about yourself and your involvement within each phase of the business. She adds that the statement you make about each member of your leadership team closely follows the importance of the statement you make about yourself.

    According to this author, your leadership ability is critical as it is your ability to inspire others. “Remember, you are not able to be all things to people within the team. Each leader plays a specific role, and the team’s strengths and support in areas of weakness will define the overall strengths of the business,” Holm guides.

    In chapters four to seven, Holm analytically X-rays concepts such as purpose and highlights; vision and mission statements; operational and marketing plans; and financial and profit plans.

    Even though the book is moderately big, the concepts are very rich despite obeying the business communication rule of brevity. On style, the report card of this text is in blue. For instance, a lot of textual and graphical illustrations are used to reinforce the understanding of readers. The book is also very educative in that the chapters are further broken down into many sub-segments to achieve simplicity and easy comprehension on readers’ part. Holm includes one-page fill-in-the-blanks form representing a prototype for a typical business plan to guide readers. What’s more, the language is simple.

    However, a technical error is noticed in the text. This is the omission of a hyphen in-between the first two words of the title of the text “Seven Step Business Plan”. Omission of the natural hyphen has grammatically deprived “Seven” and “Step” from becoming a nominal compound modifier to the phrase “Business Plan”. It is structurally supposed to be “Seven-Step Business Plan”. Without a hyphen, one will also be grammatically compelled to add an “S” to “Step” because of the cardinal word “Seven”.

    Finally, the text is a necessary companion for (prospective) entrepreneurs, business managers, etc. What else would you expect me to say if not that “it is highly recommended”? Get a copy of this book today and learn how to write a business plan so that you can achieve business success.