If you are reading this, you probably know what a business plan is. If you don’t, you are still in luck. To start with, think about a business plan as a compass that helps guide you towards your business goals. Writing a comprehensive business plan enables you to focus on your business goals by working with sound analysis and appropriate information.
However, don’t ever think everything will be fine and dandy the moment you write a fantastic business plan, because you know what they say, from the moment the ink dries on a business plan, it becomes almost irrelevant. This certainly sounds like a paradox, but there is a lot of wisdom in it. The reason is, the business world is full of a lot of uncertainties, especially in a country like Nigeria and of course other emerging markets, where infrastructure and structure are largely absent or collapsed.
There is just so much that can go wrong, so, while a business plan does not entirely protect your business from failure it is one of the best ways you can reduce the impact of the huge waves of uncertainty that will hit you the moment you begin to execute. Writing a plan forces you to focus on all the aspects of your business and prepare yourself to some extent for the vagaries of business. After all, you must have heard the popular saying by Benjamin Franklin that “if you fail to plan you are planning to fail”.
Now that we are clear on what writing a business plan will help you achieve, let’s get into the details of how to write a winning business plan.
1. Research and analyze the target market for your business
That you have expended sweat and blood in producing a great product does not mean you will by that reason get great patronage. Before you roll out your products/services, you need to analyze the population you are targeting.
You should find answers to questions such as:
- Is there a viable market for my product?
- How old are my potential customers?
- What is the average income of my ideal customer?
- Will my business be affected by religion or ethnicity?
The answers should not be provided by guesswork but by sound analysis and adequate market research, which could be carried out by surveys.
2. Estimate the size of your target market
It’s quite easy to assume that everybody will patronize you when you first start out. It may make you feel good but the biting truth is that not everyone will. That you have made a car that drives itself is laudable but thinking everyone will buy it will only leave you disappointed.
Therefore try to establish the size of your initial target market by answering questions like:
- How many people have cars in Nigeria?
- How many of those car owners have drivers?
- How many individuals have the purchasing power to buy this car?
- How many hours does the average Nigerian spend in traffic?
- How many accidents happen in a day due to bad driving?
- What percentage of the market has the competition captured? If competition exists in this business area.
3. Identify the needs of your business
When writing a business plan, you will need to make an inventory of the resources that will be needed to transform your business idea into reality. For example; what tonne of raw material will be needed to make the first batch of the product? How many sales representative will the marketing department need to meet the daily target? And so on.
4. Estimate the startup cost
No business plan is complete without the cost implication of such an enterprise. Include in the business plan the cost of all tangible and intangible resources. If it happens that some resources in the inventory happen to be expensive, consider looking for a more reasonable alternative. Your business plan should however not leave out important items simply because they are highly-priced. Be conservative and optimistic in your estimation.
5. Make the business plan attractive to investors
Financial institutions don’t invest in businesses because they think your idea is revolutionary. If your business plan does not reflect the 5C’s of lending (capital, capacity, collateral, conditions, and character)—the parameters by which your business’ profitability will be assessed, you will most likely not get funded. So when writing a winning business plan, ensure to cover the aforementioned areas.
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Thursday, 1st of August 2019
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