Writing an effective Business Plan (Part 2)

The importance of a professional designed business plan cannot be over emphasized as this forms the basis of any business venture. A business plan is a road map clearly detailing the route you need to follow in order to reach your final destination. As Napoleon Hill said ‘The world has the habit of making room for the man whose words and actions show that he knows where he is going’. Lending institutions and investors will pay attention to business ideas which are well documented. As a follow up to my previous post, today I will continue explaining in detail the elements that make up a professional business plan:

Mission Statement

Use your mission statement to clearly define the fundamental goals of the quality of your business offering, customer offering, employee welfare, stakeholder compensation and so forth. A good mission statement is a critical element in defining and communicating with your customers, employees and stakeholders. It is also a platform where you can clearly state the business you are involved in.

Your Company

Under this section, you need to give concise details about your business, such as where your business is located, what services it offers and your target customers.Try to be as detailed as possible as this forms the back bone of your business plan. You should be as simple as possible in order to clearly communicate what your business has to offer. Remember simplicity is the key to brilliance.

What you are selling - your Offer

Under this section you must succinctly describe your services/product offering. This part is descriptive and may have tables to show and illustrate product description and pricing points. You can also show how unique your offer is compared to competition, this must be supported my strong points based on market research. This way you can convince investors or financiers to sponsor your business, if you are looking for capital.

The Market

This section is where you will define your market. You need to describe your market segment strategy, market needs, trends and project growth and so on. The market segmentation is crucial to market assessment and market strategy. You will need to divide your target market into workable segments based on age, income, type of product, buying patterns, customer needs, location e.t.c. Market research input is critical for this section.

Market Analysis

For this section, you will definitely need market research input. You will describe the different customer segments within your target market. You will follow up with supporting reasons why you are targeting these segments. You need to build a strong case which will show your knowledge of the market segment you are targeting. You may also bolster your analysis by including verifiable market growth projections based on recent market research. It is important you display detailed knowledge of the market segment you are planning to enter.

Market Segmentation

Use this section to clearly explain and define the segmentation process, define the various classifications. You need to details demographic profiles of customers in each of the market segments you are targeting. This will include in depth information about their shopping habits, spending patterns and motivations based on psychographics.

Remember it is hard to fail, but it is worse never to have tried to succeed. For today l rest my case here, I will continue with part 3 of this five part series on writing an effective business plan. l will leave you with one of my favourite quote by Napoleon Hill: ‘All the breaks you need in life wait within your imagination, Imagination is the workshop of your mind, capable of turning mind energy into accomplishment and wealth’.

May your dreams come to pass!!!

Writing an Effective Business plan (Part 1)

Wikipedia defines entrepreneurship as the practice of starting a new organization or revitalizing existing organizations, particularly new businesses generally in response to identified opportunities. The best reason to start an organization is to make sure the venture serves a purpose and addresses a need that alleviates and elevates the living standards of mankind. The desire to bring about change and make a difference in people’s lives should be the driving force for an entrepreneurial venture to succeed. Money should not be the main motivator; it should be a conduit upon which the entrepreneurial dream will sail through to fruition. You need to be passionate about the type of business you are planning to venture into.

It has been said countless times that for one to succeed in business, you have to venture in a business you are passionate about. Your passion could be a hobby like writing or antique collection which you can turn into a business venture. However, the basic steps must be followed; you need to check if there is a need for this type of service before you even think of turning your passion into a business. This goes back to my earlier assertion that every business idea must be able to make a difference in people’s lives. There must be a problem in the target market you wish to enter, and your business should be able to provide a satisfactory solution to the identified problem which in this case is the business opportunity.

Every business idea must be written and a plan of action must be put in place on how you intend to transform the idea into a business. When Sam Walton started Wal-mart, which is today the world’s biggest supermarket chain employing more than three million people worldwide, he had a vision which he transformed into a business entity. He documented every step of action he was going to follow to realize his dream. Hence, in order to ensure your vision is well presented and well spelt out, there is need to write a business plan.

A business plan is your road map; it clearly shows you where you want to go and how you will get there. It is a document spelling out your strategic vision and how you intend to achieve it. Writing a business plan is very easy if you know exactly what you want to do. There are basic steps you need to follow in terms of logical flow, which will make execution easy to implement. I will list the main topics which are usually covered in a business plan below.

1) Objectives

2) Mission

3) Your Keys to success

4) The company

5) What will you be selling

6) The Market

7) Your type of business

8) Sales forecast

9) Marketing Plan

10) Management Team

11) Financial Plan

I will explain in detail elements which will be covered in each of the above topics in my post tomorrow. However, I will conclude by explaining the first topic which is your business objectives. Your business objectives must be specific goals that are measurable. When you measure your progress, you stay on track, reach your target dates, and experience the exhilaration of achievement that spurs you on to continued effort required to reach your goal. To determine if your goal is measurable, ask questions such as......How much? How many? How will I know when it is accomplished? Keep the list to three or four goals as it is difficult to focus on a long list of objectives. Your chance of implementing these goals depends on your ability to track progress and measure the outcome.

For instance, if image and awareness of your business is a priority, you need to do a customer survey to get what your target market thinks about the industry and its main players. This way you will have enough arsenal to use for your market entry. The bottom line is you need to set S.M.A.R.T goals. I will explain in detail how you can go about setting smart goals in the next post. Your comments are welcome on this post.

To your success!!!!