For a new business to flourish, writing a business plan is important to get started. It is like building a strong foundation for a house.
Experts say creating a business plan is essential for any prudent entrepreneur, regardless of the size of the business. To skip this step, they warn, is tantamount to planning for business failure.
They say that a good business plan will be useful in a number of ways, especially when dealing with potential investors, lenders or banks.
You can also use it to solicit opinions and advice from people, including those in your intended field of business.
The plan will lay out the direction for the future of the company and establish standards for success.
The founder of techtrendsng.com, Mr. Kenneth Omeruo, says a business plan should define how to operate the business. This includes describing the management team, the marketing strategy and the methods by which one will interact with customers.
“A business plan may project a strategy that reflects the management style of the founders of the business. The definition should be clear but flexible,” he says.
A complete business plan should include five-year financial projections. These projections will assist investors with making decisions about the business and help to know how much funding will be needed to get things rolling.
The Managing Director, the Event Place, Ms. Omowunmi King, says the purpose of a business plan is not to impress the reader with the depth and extent of one‘s knowledge but to focus on the key elements of the plan and making the case as concise and as straight forward as possible.
She adds, ”Defining a business plan can be difficult, as the definition might be different for every organisation.”
There are different methods of drawing business plans for different businesses but what is important is that the intending business owner must realise that there are competitors.
Omeruo stresses, “It is not good to say there is no competition,” adding that if there are no current competitors in that line of business, it is generally because there is no market to satisfy the customers‘ need being focused on.
The Life and Business Coach, Giantthoughts International, Mr. Ogbo Ogbo, also agrees with Omeruo that there is need to always assume that there is competition, noting that many intending business owners do not indicate their competitors in a business plan and this is very important.
The business plan should include the weaknesses of the competitors and how the intending business owners can exploit these.
”Knowing little or nothing about the competition is evidence that one has not done the homework. While it may not be fatal blow, it certainly doesn‘t help your cause,” Ogbo adds.
One of the difficult aspects of writing a good business plan is how to effectively deal with problems or weaknesses - and every business has them.
Experts agree that why many business owners do not survive in the business world is that while they are writing their business plans, they fail to put into consideration certain things which may be negative to the business.
Most times, intending business owners do not include the weaknesses of the business in the plan and thinking that the weaknesses will go away but this is wrong.
An intending business owner always says that once the business is funded, then the problems or weaknesses will be dealt with.
Though it is good to put the best foot forward, ignoring a negative issue simply because it does not help the cause is potentially very damaging and often fatal.
Omeruo also says that intending business owners should not hope to make profit in the first year of establishment.
According to Ogbo, focusing on the immediate returns that a business can earn from a new product before direct competitors enter the market can be a mistake if not joined with a description of how these short-term profits can be used to transform the company into a going concern.
He also notes that the financial projection of most business plans are not reasonable because intending business owners hope to achieve so much within a short time without putting into consideration other issues.
For him, investors prefer a business that shows slow and steady growth, backed up by reasonable projections rather than unrealistic financial projection.
An online magazine, nijaecash.com, however, warns of some pitfalls to avoid in a business plan. It insists if you want it to achieve its purpose, make it easy to read and understand.
It also says, “Avoid optimism. It is advisable to be extremely conservative in predicting capital requirements, timeline, sales and profits.
“Don‘t assume someone won‘t get a better idea than yours. Even if your business is dependent on a patented invention, be realistic that competition will eventually arise.
Source:http://www.punchng.com/Articl.aspx?theartic=Art201011221311742
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