What is a business plan

The business plan is a statement about yFosiness that demonstrates to outsiders what your business is all about; unlike the strategic plan, which is a roadmap for insiders.

Why you need a business plan for your business?

If you are just starting a business, having a well-written business plan shows that you have really done your homework. And if you are planning to expand an already established business, it demonstrates that you have carefully considered the pros, cons and odds; and focused on the development of the business.

If you are risking your capital, time, resources and effort to start a business; then you certainly need a business plan to help you mitigate against the risk involved. If you are already a business owner but you started out without a business plan, then you definitely need to invest in getting a business plan; especially if you want to take your business to the next level.

If you would need to obtain financing from third parties either now or in future, then a business plan is indispensable, as it sells your idea and elucidates the opportunities it presents. It arranges strategic alliances, attracts key employees, boosts your confidence, and helps you remain focused.

A business plan serves the following purposes:

• It helps you clarify, focus, and research the prospects of your proposed startup or expansion idea.

• It provides a considered and logical framework within which your business can develop and pursue business strategies over the next few years.

• It offers a benchmark against which you can measure and review the actual performance of your business.

• It serves as the basis for discussion with third parties such as creditors, investors, shareholders, agencies.

What Your Business Plan Need To Put Into Consideration

• Vision

Developing a realistic vision for your business is the first step of the strategic planning process. This vision is a pen picture of your business in the next three or more years, in terms of its likely physical appearance, size, activities, etc.

• Mission

The mission is what reflects the nature of your business and indicates its purpose. An example of a business mission is: “To develop, design, manufacture, and market specific products for sale on the basis of certain features to meet the identified needs of specified customer groups via certain distribution channels in particular geographic areas.”

• Objectives

Another key element is to explicitly state your business’s objectives in terms of the results you expect it to achieve in the long term. Aside from presumably indicating a necessity to achieve regular profits, objectives should relate to the expectations and requirements of all the major stakeholders (including employees) and should reflect the underlying reasons for running the business.

• Value

You will also need to address the values governing the operation of your business and its conduct or relationships with the society, customers, employees, etc.

• Strategies

These are the guidelines for achieving the mission and objectives of your proposed idea. Strategies can either cover the whole business (including matters such as diversification, organic growth, or acquisition plans) or relate to primary matters in key functional areas .

• Goals

Goals are specific interim or ultimate time-based measurements that you hope to achieve by implementing strategies in pursuit of your business’s objectives. For example, “To achieve sales of Ksh.50 million in three years time.”

• Programs

These set out the plans for implementing your key strategies. You must also bear in mind that all the aspects of your strategic plan must be inter-linked and consistent with each other. This will be very hard to achieve if your major objective is to make yourself wealthy.

Steps To Writing A Good Business Plan

1. Do Some Research

Research and analyze your product, your market and your objective expertise. Consider spending twice as much time researching, evaluating and thinking as you spend actually writing the business plan.

For perfect plan, you must know your company, your product, your competition and the market intimately. In other words, it’s your responsibility to know everything you can about your business and the industry that you’re entering. Read everything you can about your industry and talk to your audience.

b) Be Able To Determine The Purpose Of Your Business Plan

A business plan is a “written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement.” However, your business plan can serve several different purposes. It’s also a road map that provides directions so a business can plan its future and helps it avoid bumps in the road. That’s important to keep in mind if you’re self-funding or bootstrapping your business. But, if you want to attract investors, then your plan will have a different purpose and you’ll have to write your plan that targets them so it will have to be as clear and concise as possible. When you define your plan, make sure you have defined these goals personally as well.

Things you need to consider to come up with a business ideas or plan .

c) Creating A Good Business Profile

A good company profile can help you gain trustworthy to your clients.Your company profile includes the history of your organization, what products or services you offer, your target market and audience, your resources, how you’re going to solve a problem, and what makes your business unique. Company profiles are often found on the company’s official website and are used to attract possible customers and talent. However, your profile can be used to describe your company in your business plan. It’s not only an essential component of your business plan, it’s also one of the first written parts of the plan

d) Consider Creating A Documentation For Your Business Plan

Investors want to make sure that your business is going to make them money. Because of this expectation, investors want to know everything about your business. To help with this process, document everything from your expenses, cash flow, and industry projections. Also don’t forget seemingly minor details like your location strategy and licensing agreements.  

The challenge for the entrepreneur is to match personal skills, interests, and capabilities with an inherent passion and tie it in to an underserved customer base. Following is a list of questions designed to help do just that:

Tips For Generating good business ideas

− What do I enjoy doing the most? Doing something enjoyable is a good way to ignite commitment and possibly uncover an idea that will prove profitable. For example, the Boeing (aircraft) Company got its start after flight enthusiast Bill Boeing built a plane in 1916. One plane led to two, then three… and so on. In Glasgow, Scotland child-lover Cathy Campbell turned the front room of her home into a crèche (a daycare centre). Cathy started small and insists she wants to stay small so she can focus on her clients and avoid too many administrative duties – thereby allowing her to do what she loves most, which is play with children.

− What are my hobbies and/or interests? Anything from growing roses to personalizing software programs to building model ships can be turned into a profitable business if the circumstances are right – either by teaching others how to do it, by packaging and selling what is created, or by selling related products to fellow enthusiasts. For example, quite a number of multi-million dollar computer companies (Apple, Dell, Microsoft…) were started by ‘computer nerds’ who turned their computing interests into selling marketable computing products and services to similar enthusiasts.

-What subject(s) or pastimes did I enjoy in college (or high school)? Think back to your student years. Can the one or two subjects you found most fascinating be turned into a money-making idea? With a little thought and effort they just might. For example, when MIT professor Harold Edgerton invented the strobe light he couldn’t interest General Electric in its possibilities so he hooked up with two students and formed a business (EG&G) that photographed mechanical processes at high speed, thereby providing a new way to look at, and solve, industrial problems. Similarly, Hewlett-Packard was formed by two Stanford students (Dave Packard and Bill Hewlett) who had a passion for electronics. One of their first products, an audio oscillator, was purchased by Walt Disney for the making of Fantasia. Then there’s Gary Comer. With no more than a high school education and a love of sailing, Gary started a business that supplied sailing equipment to fellow enthusiasts. The name of that business? Mail order giant, Lands’ End.

−

What marketable experience, knowledge, or skills do I possess? Almost everyone possesses a skill or knowledge that has the potential to make money. For example, Snap-On Tools began when machinists Joe Johnson and William Seidemann fashioned together a set of interchangeable sockets and wrench handles to make their job easier.

The company where they worked rejected their idea out of hand, but being experienced machinists Johnson and Seidemann knew their idea was a sound one so they developed it on their own. In another example, fast food manager R. David Thomas helped Colonel Sanders succeed with his Kentucky Fried Chicken franchise then went on to use the additional experience he gained to start the Wendy’s burger chain (named after his daughter).

Further examples of using personal skills to create a new business include ‘mash-up’ operations that combine different web-based tools to create new search and software possibilities or teaching-based operations that show others how to use digital photo software (or any new software for that matter). Technical processing or data collection services as well as services that provide creative design work for documents, menus, or marketing provide additional example.