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Friday, January 30, 2015

Business Talk: Basics of a good business plan

Biztoon illustration, Business Talk: Basics of a good business plan 

Most business failures have been attributed to lack of clear and feasible plan from the beginning.
Although, experts say it may not be possible to have a complete business plan before starting a business, it is compulsory to have the necessary roadmap as guideline for every decision made with respect to the venture.

According to experts, a business plan serves as a roadmap that gives direction and dictates the strategies to be used in achieving a goal.

The Chief Executive Officer, Angela Itambo Company, Mrs Angela Ihunweze, says most people have a business idea they intend to execute but do not follow the scope of what business planning entails.
She adds that some feel it will be a waste of time because when the business opportunity meets with funding, their passion will overshadow all challenges they may encounter.

No matter the type of business, whether, an e-business or working on a multinational planning team, experts say business planning is crucial.

They say a business plan is simple on one hand and can be sophisticated on the other, therefore, they advise start-ups to have an integrated business plan no matter the type of business they operate.
Usually, the traditional business planning approach which involves repetition of the same subject matter as other organisations in terms of setting vision, establishing goals, and getting employee involvement fails according to experts, because the required parts are not integrated, the results are boring, and the process is not completed throughout the company.

Professionals have highlighted the attributes of a good business plan and they include:

It should be market-driven
A business consultant, Mr. Adesola Adigun, says that the market should determine how a business plan will be structured.

Most businesses and plans are primarily driven or determined by market needs and aims, he says.
In writing a good one, he advises that the market should be researched thoroughly and decisions on ways of reaching target customers determined.

He says, “What promotional tactics and marketing channels will you use? How will you price your products or services? What brand positioning do you desire for each? How will you get the needed funds?”

Be simple and explicit
Experts says when most people hear of a business plan, they see it as bundles of paper which has voluminous content, and this cause people to avoid planning.

According to Adigun, it doesn’t have to be that way but should be presented in a simple and complex way simultaneously.

He explains that the information in it should include both the short and long-term goals coupled with strategic elements and details of the daily requirements.

According to him, the concept must include evidence of the present achievement using milestone of success as well as documentation of where you intend to take the business.
Ihunweze says in order for the business plan to ignite the interest of the reader, it should not be too lengthy but should be concise and written in plain business language.

Have a strategic plan
Experts say the concept of a business plan must be well understood to have great impact on the people it is being presented to or those they are working with.

A business management professional, Al Coke says the strategic plan is a single-page document that defines where and how the business owners want to position their company. According to him, the strategic plan examines a list of factors that may influence their future therefore it should address assumptions, guidance, vision and mission statement, strategic goals and objectives of the company.

The strategies should be realistic
Another measure of a good or bad in a business plan is realism. Experts say ideas that cannot be implemented will not be acceptable to the organisation or individual being presented to.
For instance, Adigun says a plan that requires millions of cash of investment but does not have a management team that can get that investment is not a good plan.
In addition, he says a brilliantly written, beautifully formatted, and excellently researched business plan for a product that can’t be built is not a good business plan.

Analyse the required resources
As part of a business plan, Coke says an analysis of the annual targets and the goals from the strategic plan should be made.

“Normally you can develop the resources plan in conjunction with the operations plan since the two are so closely connected,” he says.

The resources required are staffing levels, technology, tools and equipment, intellectual capacity, finances, facilities needed and so on.

It should have measurable results
Every business plan ought to include tasks, deadlines, dates, forecasts, budgets, and metrics. Adigun says business owners should determine measures that will be used to evaluate the progress of their business plan.

He says, “How will they know later if they followed the plan? How do they intend to track actual results and compare them against the plan? How will they discern if they are on track or not?”
He says good planning depends more on what, when, who, and how much.

Get expert advice with it
Adigun says that a good business plan can be used to solicit for further guidance from mentors or people who have tread that part before.

He condemns the practise of going into a new business without consulting professionals in the field, saying that most business failure is often caused by this.

He adds that a lot of mistakes and financial loses can be avoided when all stakeholders are consulted before making an important business decision.

According to him, people who should be regularly sought for advice are investors, family members, trusted business friends, bankers, lawyers, business mentors, potential customers, competitors and business associations.

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