This post was necessitated by incidences I experienced which showed that a good number of people and small business owners in fact do not have an idea on how to write a business plan. In one of those encounters, one afternoon, I engaged a man in a discussion at a supermarket and asked what he did for fun. He told me he wrote business plans for fun. Knowing the amount of work it takes to write one, I was amazed and since I knew him and knew also that he had no substantial knowledge about business, and especially since I was attending a business school myself at the time, my curiosity peaked and I enquired further on what his business plans usually contained and to my utter disbelief he kept repeating vision and mission. Yes, a business plan entails that but, it also entails more which this guy and many other intending business owners have no knowledge about. Most people keep making the mistake of thinking that a business plan is just vision, mission and objectives.
What is a business plan?
A business plan is a total sum up of the details of your intended business, which includes where it is coming from, where it is headed, services you offer, detailed info about your competitors, goals and how you intend to achieve these goals.
What should a business plan contain?
In my own opinion, the most “unserious” of business plans must at least contain:
Business risks and mitigation
A personnel plan
The business model canvas
A financial plan
Company background: This gives the description of your business, the vision (what you want your business to achieve over time); mission (the core purpose of your business); your business objectives detailing growth of sales volume, gross profit, compensation; value proposition showing the unique features of the business; critical success factor describing the business strengths and core competencies; current status of your business and the potential challenges your business might encounter.
Marketing Plan: This should contain a description of your services or product, the target market, the opportunities that abound with this service, and the strategies you would use in delivering this product.
Competition Analysis: This shows who your competitors are and how you intend to be different from them and also how you intend to carve a niche for yourself despite the competition.
Business Risk and Mitigation: This describes the risks associated with your business and also gives details on how you intend to overcome them. It also outlines your SWOT analysis. SWOT stands for strength, weakness, opportunities and threats to your business.
Personnel plan: This includes the staff you are going to be working it or that you are already working with, what they do and what they earn as pay, how often they earn this pay.
The Business Model Canvas: This is one of the most important parts of your business plan, which you should focus on when pitching to your investors, and it is like a summary of everything I have mentioned above. It analyses your key activities, sources, services you are offering, possible key partners, personnel plan, cost plan, and also your revenue streams.
The Financial Plan: This should include your profit and loss statement, depreciation schedule of the structures to be used in this business, financial forecast (sales and cost forecast) , operating expense, cash flow plan, viability analysis which shows your investors if your business would thrive or not.
So the above is just a summary of how a business plan should at least look like, yes there is still more to add which I didn’t because I can’t discuss everything on here. I hope you have learnt one or two things. If you would like to learn more, you could hit me up and we could arrange that.
A business plan contains a whole lot more than vision and mission!!!