BUSINESS PLAN GUIDE

 

Business Plan Guide

 By Ayo Emakhiomhe and John Aigbokhaode

Hi, this is for all of you that has been thinking of how to prepare that business plan to put your venture in proper perspective.

below is a simple guide to help you prepare your business plan.

1              Executive summary

A brief summary of the business/introduction

2              Vision

It is simply defined as “What you make out of what you are out to do”.  A vision is a dream of the future of a department.  It represents the department’s destiny.  It must be bold and realistic.  It must be stated in a short simple sentence that carries no ambiguity e.g. “To be a choice provider of financial services”.

3              Mission

It is simply “What you are out to do”.  This flows from the vision.  It answers such questions as “what business are we in?”  It gives a scope of the business or department.  The mission is a philosophy on the design, availability, orientation and societal role of the enterprise.

4              List proposed products/services.

5              Target market: definition of your proposed clientele classified based on defined characteristics like income base, geographical location and age.

6              Management structure: who will run your business with you? What’s your staffing plan both in the long and short term?

7              Business type: Sole proprietorship, Limited/Un-Limited, NGO, etc.

8              Marketing plan/strategy. What’s your market penetration strategy vis-à-vis your defined business model. This should be divided into long, medium and short term plans. What’s your pricing strategy?

9              Objectives

Objectives answers the question, why are we in business?  This is the end, which the organization seeks to achieve through its existence and operations.  They are short, concise statements usually not more than 5 that help to articulate the purpose of the organization in its environ.  Objectives are more tangible than mission statements.

10            Goals

Goals emanate from the objectives.  They seek to express the set objectives in quantitative and SMART form.  Goals are landmarks of achievement that inspire corporate endeavour towards action.  They become standard for assessing the organizational performance.

Major characteristics of a goal are:

• Specific
• Measurable
•  Attainable
•  Realistic
• Timely

11            Key Success Factors

Immediately following the goal is the key success factors.  These are the critical issues precedent to attainment of your goal.  They represent the fundamentals that must be tackled for achieving the set goals.  Example of key success factors for attainment goals set by a business is:

•  Effective & Efficient Management
•  Quick Turnaround time
•  Efficient use of Information Technology/Communication Network
•  Funding
• Staff Training and Development
• Image

SWOT Analysis

Strength and weakness focus on the internal environment while opportunities and threats focus on the external environment.  SWOT diagnoses is the process by which an entrepreneur determine how to exploit the opportunities and meet the threats of the environment it operates in by using identified strengths and repairing weaknesses in order to build sustainable competitive advantage.

This is an audit of the business environment. 

After setting goals, it is imperative that an environmental scan of the setting within which goals are expected to be achieved is conducted.

12            Strength                     

Internal Analysis

This is the definition of the existing strength mapped against the weakness of the organization.  They are internal and unique to the organization

13            Weakness

14            Opportunities              

External Analysis

These are the opportunities and threats that face the organization from the external environment within which the organization has found itself.

15            Threats                       

16            Strategy

This consist of the key elements of the HOW to achieve stated goals.  It is the means the organization intends to employ.

Strategies must be built around identified strengths and opportunities in order to combat threats and weaknesses.

Strategy is the heart of a business plan.  It is the starting point of performance and it defines the success or failure of department/unit/organization.

The following are the key issues in formulating a strategy:

M Avoid incautious or over-ambitious strategies, which ignore environmental signals.  This can lead to failure.

M Strategies must be formulated towards goals.

M Refusal to change past strategies to articulate present realities may lead to failure.

M Formulated strategies must take cognizance of available resources for implementation.

M Identify specific market through segmentation and formulate service/product strategy for that market with the appropriate marketing mix for each.

Below is a marketing mix matrix

Markets (M1, M2, M3, M4)

	M1	M2	M3	M4
P1
P2
P3
P4

17            Action Plans

Action plan seeks to translate strategies into actions for implementation.  It is therefore a calendar of action, which seeks to identify and measure visible milestone in the journey towards arriving at the goal.  This should follow a specific format as shown below:

Issue	Action	Responsibility	Outcome	Deadline/Date	Supervisor

18            Resource Requirements

This is a statement of all the resources required for the achievement of the business plan and a definition of the role each resource is to play in the achievement of the presumed plan.  It is important to justify each resource required in terms of the value such resources would add to the process of achieving the objectives and goals of the business plan.

19            Budget: set budgets for all areas of your business plan. This budget includes the timelines for achievement and success measurement parameters.

20           What is your exit strategy (if the need arises)

21            Sign Off

A business plan must be concluded with the name, officer signature and date of the writer of the business plan.

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