In recent times, Entrepreneurship has evolved embracing new concepts and ideas. Social media has proven to be an essential tool and has boosted the clientele and revenue generation of most companies in ways that could have been overwhelming and almost impossible if undertaken traditionally.
The availability of unending tutorials and applications makes it possible for an entrepreneur to design graphics needed for advertisement.
This is just one feature out of the myriad of options available. Regardless of all these advancements in technology, an entrepreneur should not lose sight of the most important ingredient; a business plan.
What is a Business Plan?
A business plan is a formal written document containing business goals, the method on how these goals can be attained and the time frame within which these goals need to be achieved.
A business plan is a comprehensive summary that drives an entrepreneur’s entire business. It answers the questions; who, why, where, when and how. A business plan can be written in different ways based upon an individual’s preference.
There is the traditional method and the modern method. In using the latter, the internet has made things easier, there are templates that could be edited to suit an individual’s preference. There is no wrong method in drafting a business plan so long as it captures the important details and is clear to the entrepreneur.
Structure of a Business Plan
Business Plan Section 1: Executive Summary
To begin with, an executive summary begins the business plan. This is simply a brief description of what the company does, its plans, how they intend to achieve them and how they will be measuring their efforts. It seems a lot like for a single section. However, the executive summary is as the name implies a summary of the entire plan. It delves into the product or service you offer. The business name and location are included in this part of the plan.
A mission statement is not overlooked. This is a formal declaration of the overall goal or purpose of the product or service. An individual has two options in writing this part. You may decide to use this part of the plan as an outline to develop the rest of the plan.
Also, you can extract this part from the plan once completed. The executive summary gives a basic understanding of the product’s essence.
For instance, the executive summary of a consultancy service will begin by talking about the services they offer. These services are varied; marketing, business management, education. Thus, if the consultancy service focuses on one of these services, you talk about that here briefly. The physical location is also needed. To make it more elaborate, you could add the directions too.
The executive summary is always reserved for the last. Even though it is the first section, it is the last to be written. Since the executive summary is the crux of the entire plan, it makes sense to first put that plan together then write a summary of it.
The next part of the business plan is the business description. This gives a clear idea of what message the entrepreneur is communicating to the customers.
The focus here is the customers. This part answers the customers’ questions; how does your product fit into our lives, how can your product help us solve a problem we are facing and create the result we are seeking, who does your company serve and why do you do what you do.
There must be an assurance from the entrepreneur to the customers. Trust must be built. There has to be an explanation on how the product can work for them. The product cannot be shoved in their hands demanding they just patronize. That would surely lead to the company’s death. The product needs to be one that customers cannot do without; an essential. It should add value to the customer’s life and general well-being.
Let us consider the example of fruit blenders. I would like to believe we all see the advertisements on the television. Most of the time, you see a man or a lady using the blender whilst explaining how it works. Then when you feel the texture of the fruit drink is satisfactory, you stop spinning.
Market Analysis being the third part of the business plan is an enquiry about the market. The entrepreneur needs to define the target market and audience.
Taking the case of the selling of mathematical sets, the target market will be teachers and students. It does not end there, the age, race, gender, average income, TV Shows they watch, places they frequent, and others need to be defined as well. This will give you an overview of the pricing method.
Market research can be done using lots of different methods but one of the most common ways is to examine the market using present and past data about the market, competitors, what customers want and what it takes to give what customers want to them.
Another way to perform research is to come up with your own research design to give you better insights into the market. A typical example is performing a pilot. Also, you can send questionnaires to people you believe to be your ideal audience and have them fill them out. That way, you get direct feedback from them about your idea and how it can potentially help them live a better life.
Competitive analysis is the fourth step in writing a business plan. This part requires research into the market an entrepreneur is trying to infiltrate or dominate. There will definitely be competitors who sell similar or the same products and offer the same service as you do.
An entrepreneur needs to answer why customers should patronize his services instead of others. This relies heavily on your strengths, what sets you apart. The entrepreneur could focus on one aspect and build his/her brand upon that. It could be the packaging, quality of product, publicity or reviews and recommendations from customers.
A typical example is Hairsenta, a hair retail company in Accra. Hairsenta is associated with quality hair and social media marketing strategies. The CEO wanted to know where the hair comes from and took a tour to China to familiarize herself with the whole process. She just doesn’t sell the hair; she puts all of her into it.
The marketing platforms are not only filled with advertisements. You will find inspiration and appreciation for individuals who have made a difference. Even though the hair is expensive, with Hairsenta, I would not think twice.
Sales And Marketing
Sales and Marketing is an important part of the business plan, especially in these modern times. Traditionally, importance would not have put on this part.
However, with advancement in technology and the growing number of people who sign up to social media platforms every day, its value cannot be erased.
Firstly, the entrepreneur would have to identify where he or she can find the target audience. A visibility strategy needs to be developed. This is how the customers will first learn about the product or company. Then, a lead generation strategy deals with how you would establish and maintain contact with the customers you have discovered. Lastly, a strategy for turning the leads into customers.
For instance, you can decide to use one social media platform be it YouTube or Pinterest. Considering the former, a video can be made describing how the product can be used and its importance. You could also make a video about lifestyle and incorporate it, an example could be a gym mat.
The link to purchase can be indicated in the description box. From here you can use a mailing list possibly to communicate with those who enquire about the product but are sceptical about buying, you convince them here.
Ownership And Management
Ownership and Management are sometimes overlooked but remains an essential feature of the business plan.
The entrepreneur decides if the company will be registered as an LLC (Limited Liability Company), a partnership or sole proprietorship. When a company is registered as an LLC, personal assets are separated from the company assets. In this case, if ever the company is sued, your personal assets will not be touched.
A sole proprietorship vests the ownership in just the entrepreneur’s hands, he/she has the right to effect any changes he/she deems fit without consulting anyone.
On the other hand, a partnership involves two or more people, thus, each person has a say in the daily management of the company. This part helps take care of the legal aspect of setting up a company.
Organisations are systems of moving parts such as the marketing department, sales department, research and development department, customer services and so forth. All these moving parts need to be stitched together by an operations department that coordinates efforts from the different departments to make the company work as a unit, holistically.
Operations help break down the daily responsibilities. This part outlines what the entrepreneur does in a day.
Assuming you run a salon which opens at 8 am, you should get there earlier than the time so you could tidy up the place. You might have appointments from the previous day, the clients could call to check in or just show up at the time they booked for.
If you have home service appointments too, you need to leave the shop with your assistant and get to the place on time. This is a form of building your reputation as well. Your clients will associate you with being time conscious and keeping your word. This builds trust in the business relationship.
Financial plan indicates the cash flow in and out of the company. It deals with expenses, profit margins and income or revenue generated. The entrepreneur’s goal is to make a profit whilst serving his/her customers to the utmost capacity.
In order to do that, the financial plan has to answer some questions; how much does the inventory cost per month, what does it take to run the business, what different programs or systems do you need to run the business. Your marketing budget is not excluded from this list.
As children, when our mothers sent us on errands, they gave us a list of items to buy. At that point in time, I did not think much about it. But looking back now, that was a list of expenses.
The revenue generated from that particular list was the food that will be made at home. The financial plan being talked about here is that of a company. Your goal is to maximize profit, documenting your financial plan will help you do that.
In conclusion, writing down a business plan helps you figure things out and see more clearly. The ideas are no longer chasing after each other in your mind but well-articulated on paper. A business plan can be referred to as the first step in launching your business.
The best way to also get started is by using the business model canvas.
Once on paper, you can envision your business more and become motivated to start serving your clients. This is clearly summarized in the scripture Habakkuk 2:2 says ‘’And the Lord answered me and said, Write the vision and make it plain upon tables that he may run that readeth it.” (KJV). The steps above will help you in formulating a comprehensive business plan with a personal touch.