By Charles Odii
Week 3 on #AskCharlesOnY!
QUESTION: Can I start my business without a Business plan?
RESPONSE: Dear SME100Nigerian,
Imagine yourself walking into a dark room…an unfamiliar dark room. You bravely try to navigate your way through the darkness hoping that you don’t hit your foot against a chair or bump into a wall. Your hands are stretched out before you as you try to “feel” your way through the darkness. Every little sound startles you because you are not sure of your environment and your steps are slow and unsteady because you can’t see what is ahead of you. You are anxious to reach your destination, yet you have no idea how long it will take or if you are even on the right path!
Know this feeling? Now that is what starting a business without a business plan is like. Now let’s go back to the little story above; would having a flashlight in your hands have made any difference in that dark room? Of course it would have!
To drive the point home, the flashlight in my little story is your business plan and the dark room is the economic environment we find ourselves in today.
People start businesses for different reasons: the inability to get into paid employment, convenience, family traditions, the need to have multiple sources of income etc. A lot of times, people become “accidental entrepreneurs” simply because they need to make ends meet and so they do not take out the time to develop an End-to-End strategy (Business Plan). This is one of the reasons 65% of startups die within the first 5 years.
A Business plan is the cornerstone on which long lasting organizations are built. Without one, you will have little credibility especially if you are trying to obtain funding.
Even if money is not a prime consideration, don’t make the mistake of thinking that the plan is optional. It spells out for you, and anyone else, your goals and strategies and how you intend to achieve them.
Below are some of the elements that should be included in your business plan.
What should it include?
Introductions: This should put your business and proposals in context. A summary of the entire document would be useful at this point
Overview: Information about the sector(s) in which you will be operating, showing an understanding of the market and of competition.
Product: what are you offering, what differentiates it from similar items, what unique factors can you bring to the end result?
Objectives: What qualitative and quantitative targets do you have in mind?
Marketing Plan: Demonstrate that you know your customer base, you have identified a niche for yourself and you have a clear idea of how to move forward and corner a share of the market in the immediate, medium term and longer-term future. You should describe a well-rounded strategy for promoting your business using an appropriate range of methods and media.
Sales forecast: Indicate costing, pricings, delivery, seasonal factors and other variables e.g. outlets for your work.
Operating plan; Show how the whole process will work in practice and taking into account what resources you will need.
Quality Control: How you will ensure that the product or service is of marketable standard? What checks will you apply?
Budget and Cash flow: Projections, models and specimen accounts could accompany this. You could also include an outline of how you will support yourself and the business while it is in its infancy.
Outcomes and Evaluation: Demonstrate how you will know if you have achieved/partly met your goals and how you are going to monitor progress. This is a good place to indicate milestones along the way where you can stand back and monitor the business development objectively at regular intervals.
The Following additional documentation will be useful
Contingency arrangement for all the above: What fallback will you have if things fail to run smoothly?
SWOT analysis (a breakdown of strengths, weaknesses, opportunities, threats inherent in your plan.
Testimonials from potential customers, suppliers, sponsors
Lists, articles and appendices that add weight to your plans
All of these must be backed by hard facts – statistics, figures, analyses, and diagrams. Potential funders and business advisers will expect you to be able to talk this through as fully as possible and will pounce on any perceived weaknesses. They are not likely to lend you assets or assistance unless they can predict a return on their input. The plan is a work in progress: it should grow organically, not remain static. If it’s successful, you will revise and hone it.
All the best with your Business plan.
Remember SME100Nigeria is here to help you and support you.
Call us today to Book an appointment with our Consultant on 08177743650 or email us on [email protected]. We will be glad to hear from you.
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