Why you need a business plan for your business

Why a business plan is important to a business

A well drafted professional business plan is an ingredient to a successful business startup. A business plan is written after it has been ascertained that a business opportunity already exists.  It usually contains all the basic items that would ensure the smooth running of the business and what is to be done and how it would be done. The business plan is the nucleus of every business. It is the foundation, upon which you build and grow your business.

Its importance is crucial to the sustainability of a business and must be properly aligned within the strategic focus and goal of a particular business based on the fundamental principles behind setting up such business. The more balanced a business plan is structured, the more the success rate of a business. There are importance attached to a business plan and one of such is to confirm if a business will be successful or not. It helps to allow for comparison of actual operation results and the business plan itself.

Another huge fact that is tied closely to the proper drafting of a business plan is the fact that it is a prerequisite to securing loan facility with any commercial bank. No bank will want to risk its hard earned funds as long as your business plan is lacking in its basic structure. Bank officials will scrutinize and ask questions concerning your proposed business based on the figures you have penned on the business plan. Their major concentration is usually on the cash flow analysis and revenue model. They would want to find out how profitable the business will eventually be, as it is closely related to your ability to make repayments of loan facility.

 

Why business plans

A business plan is a window for attracting would be investors and high profile clients. The more balance and attractive a business plan is written, the more investors are attracted and high profile clients become attracted to its line of business. Majority of businesses in Nigeria thrive via funds from investors and patronage of clients who are convinced of its profitability. There is always a standard template for professional business plan and the more professional looking a business plan is drafted, the wider the windows of opportunity is opened.

To discover new opportunities coming up with a business plan involves lots of brainstorming and through that process, fresh business ideas will start coming to light. A business plan contains opportunities for exploring new products and services. SWOT Analysis involves identifying the strength, weakness, opportunity and threat of a business. When Eva water was created to accommodate lovers of fresh waters in Nigeria, it was welcomed with warm embrace by millions of Nigerians.

A meeting of business plan and your business

Smart entrepreneurs noticing the availability of a huge market to be explored quickly thought of another way to tap from the abundant wealth of opportunities available to manufacturers of this natural gift from God. What did they do? They created sachet water at an amazing price of just N5 and trust Nigerians,they quickly flocked into the sachet water production business and utilized every opportunity available.

Whether your business is feasible or not will be determined by the nature of your business plan. A business that will be feasible can be identified from the business plan. Not every business can be practically implemented if the links between the various items in a business plan is being disjointed. Professional consultants and business plan experts are usually deployed and contracted to help create professional looking business plans to ensure that this key fact is not excluded.

To have a firm understanding of your competition, it is important to package your business plan properly. A clear knowledge of who your competitors are would help to ensure you create a strategic plan to counter their effect. Businesses thrive via competition and the more competitive a market is, the more the opportunities to be exploited. MTN Nigeria was the only dominating force in the telecommunication industry until Globacom came into the scene. They never felt intimidated by the rich experience of MTN Nigeria and till date, they remain a major force in the telecommunication industry. There is direct and indirect competition and you must understand your company’s competitive advantage.

A well drafted business plan shows how prepared you are to commence actual business. Any serious business owner must ensure that a well drafted business plan stays on top of his list of priority as a sign of his intention to launch out that long awaited business idea. It’s all about how ready an individual is in translating his idea into real life. Until your business plan is drafted in black and white, it is assumed you are not ready.

It also helps in the control of deviating actions in business, as a business plan sets a standard in terms of projections with actual figures and calculations during full operations after startup. The contents of a business plan may vary from one entrepreneur to the other, but key issues need to be addressed in them accordingly. It helps to evaluate the implemented business plan via comparing of actual performance against projected performance result; to the extent that actual result are less than or much greater than the anticipated results, the entrepreneur needs to reconsiders the company’s current mission, objectives, strategies, policies and programs, and possibly make changes to the original business plan.

 

 


Source: Jobs for Naija

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