s, itIntroducing your business to the world as a legal profit-making entity that will grow, survive and solve problems for the society is good. For this reason, you should create a business plan. We shall briefly outline the steps to write an effective business plan for Nigerian businesses in this article.
A business plan is a formal document that gives clear details about your business. It includes the business goals, and the strategies you will employ to achieve them. Your business plan will immediately project the seriousness, mission and vision of your enterprise to potential investors. So it is designed to attract funding and investment opportunities in the future.
So be prepared to clearly outline the product or service offered, competition, your unique selling points, profit projections and more. You must be ready to CONVINCE any individual or entity willing to offer you loans or other funds that they will not lose out. Also note that as your business grows and changes take place, your business plan must be updated to reflect them.
Types of Business Plans
There are many free and paid business plan templates online you can download and modify to suit your business. If you are not sure of being able to write an effective business plan for your business, then seek expert guidance and/or help.
There are basically two types of Business Plans – the Traditional and the Lean Startup types. It is important to give clear details of the structure, operations and profit forecast of your business in your plan. However, modern business plans are not usually so voluminous compared to older versions.
A business startup might benefit more from a lean startup plan at the onset. The lean startup plan presents a summary of the vital or major elements of the business. That means you can save the full details in a separate document. As such, a lean startup plan may not be more than a page or two.
However, as the business expands, more comprehensive details of the business should be included in the plan to attract funding opportunities. This is where a traditional business plan becomes very useful. A traditional business plan has a standard format and presents more details, which we will outline here.
How to Write An Effective Business Plan: The Major Steps
A standard (traditional) business plan contains the following major sections or steps:
- Executive summary
- Company description (and its goals/objectives)
- Market Research and analysis
- Sales and marketing strategy
- Operations and management
- Financial Analysis
- Appendix (optional)
The executive summary is the first page of your business plan. It gives a detailed but brief summary of what your business is all about. Alo should present the key details about your business to any reader. It is good practice to write the executive summary as the last stage – after developing and writing all other sections of the plan.
The executive summary should be a few paragraphs that include the following:
- Your business profile (Name and location(s) of your business)
- The product/service your business is offering,
- The goals/objectives of your business (your mission statement) in brief
- Some information about your staff
- Basic details of your finances and growth plans (if you are seeking for investors, then this would be important)
In this section, you will provide more details about your product or service, and the problem you are solving. You should clearly state the goals or objectives of your business as well. Your business goals are what you intend to achieve in your business in the next few years. It could be 3, 5, or even 10 years coming. You will also state what competitive edge or advantage you have above or beyond other competitors offering a similar product/service. State your staff strength (number of employees) as well. You should also emphasize the strengths or outstanding features of your business to create an appeal for it.
Market Research and Analysis
Before you embark on any business in Nigeria, it is highly recommended to investigate the potential market. You need to carry out market research and analysis to see how well your business can survive, and make profits. One very good method of doing so is by carrying out interviews and surveys.
You need to find out who and where your customers are, and how to connect with them. Find out how other competitors in your field of operation are performing, and how you can stand out from them. Also find out what resources are available to help your business within the environment. Finally, investigate what existing challenges you must overcome, and how.
These findings would eventually be presented in summary within the market analysis/survey section. You must emphasize the market share of other competitors; their research findings; their strengths and weaknesses, and your competitive advantage over them.
Sales and Marketing Strategy
Those special ways you intend to use to promote and sell your product/service to customers will be outlined in this section. Be sure to include all strategies through which you will connect (or are already connecting) with your potential customers. Present all channels of distribution and communication (physical and virtual) you are using, and plan to use as well.
Whether via social media, interactive website and/or blog, physical and/or online events/programs, outreaches, networking opportunities, collaborations, or advertising. This is where you will explain your entire sales and promotion strategies, and their potential benefits. Your growth plan over time (and how you intend to achieve it) should also be stated here.
Operations and Management
In this section, you need to explain the legal structure of your business and how you (intend to) run it. Are you the sole owner, do you have partners, or is it a limited liability company with shareholders? Outline these details at this point. You can also use an organizational chart to show the primary officers and their roles/contributions to your business. You should introduce key members of your team, explain their roles, educational and professional qualifications, and experience.
Your business financial analysis or plan outlines how you finance (or intend to finance) your business. For a new business, it is a financial plan – that is, how you intend to source for funds (including loans and funding requests from investors). The cost of all equipment and resources needed to service your business will be included here.
For an existing business, a financial analysis would show how money flows in and out of your business. As such, you need to state the selling price of your product/service, and your expenditure. Any loans borrowed, and the collateral you used to service it must be stated. Additionally, an operating business will present an income statement, balance sheet, and cash flow for the last 3 to 5 years.
You should also state your financial projections as well. The financial projection is your estimated income/profits for the future – maybe in the next 2 to 5 years.
If you have any supporting documents to present to interested investors or funding sources, you can state/show them in the Appendix section. This section is optional. Such documents include product pictures, letters of reference, permits, licences, business registration documents and leases.
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