I am still amazed at the way some business owners run their businesses. Recently, I ran into an old school mate of mine. The last time I saw her was a decade ago. After reminiscing on our old school days and some pleasantries, we, of course, had to do some business catch ups too. As we went into a eatery close by for a drink , Grace asked what I was presently into, I told her and she told me she’s into Table water production . At this point, she narrated how her workers nearly squandered all her company resources. She owns a Table Water Production Company with an enviable staff strength of 10 workers. Her employees consist of one driver, 5 factory workers , one manager and 3 marketing representatives. Grace also works with a big Pharmaceutical Company as Chief Pharmacist because she’s a trained pharmacist and according to her , she is always busy with her pharmaceutical job and gives less attention to her own business, the Table Water Company.
Grace suddenly got emotional and in tears she told me how her marketers connived with the manager of her company to embezzle her money . She further said that two marketers resigned unannounced and made away with huge amount of the money they realized the day they left the company . She further lamented that she entrusted the company to the manager who mismanaged the company’s resources after all she had put in to build it single handedly. This was when she asked for my my own take and that she needed a reliable hand to either partner with or manage the business for her. I had to come in here, started by asking her if she has a business plan , which was an important question and she said No . I also asked her where she will like to see the company in the nearest future say in 5, 10 ,20 years.
Grace , who got more interested at my valuable ideas, she then answered and said she would want it to be one of the top household names in table water productions.
These are my business advice ….
First and foremost, I started by reminding her that business plan explains your product , the market size and need, and the need of the company’s unique qualifications to fill the needs mentioned. With an interesting and catchy executive summaries written down,it will attract busy investors and urge them to read the rest of the plan.
Here are the Key Elements of a Business Plan.
1 Company Analysis
Your opportunity to put your accomplishments on the Frontline. The timeline of milestones proves that your company have executed on a previous game plan and describes your company’s ” unfair competitive advantage” such as proprietary technology.
2 . Industry Analysis
This is a proof that you know your company in and out including the many overlapping industries or companies in which your business competes. Be specific by including full industry figures from reputable data sources. Niche trends should be included too.
3. Customer Analysis.
This is very essential in that a map of your customer relationships must come to play. You must show that you know your customers more than any other company does. Here you have to include the niche market statistics, demographics, psychographics and all salient customer information.
4. Competitive Analysis
Here you must prove that you know your opponent s or competitors irrespective of wether they are public companies , private companies or small business owners. Remember your real competition is any service or product that a customer can use to fulfil the same needs as your company does. Actions by the customers themselves is included too. You have to lay out the strength and weakness of your competition.
5. Marketing Plan
The Four P’s which is Product, Promotion, Price and Place , with the 4Ps you will fully explain your product , how you will promote the product, your pricing, and your distribution channels. Be as specific as possible so as to show and convince investors that you know how to move product into customers hands.
6. Operations Plan
Everyday activities ranging from short term processed to long term processes which include projected dates of product release, revenue milestones, partnership formations, customer contract s secured, future funding round and IPO, and hiring must have a detailed description of how you service your customers. Investors want to see context for exits or payout for their capital.
7. M anagement Team
Management team is the engine that drives a company’s success. Write and include the biographies of your team members and the board of Directors. You should include past accomplishments or success stories because that demonstrate the ability to execute on a plan and grow a company. In other words , if there are management gaps that are crucial to the early operations of the company , fill them before completing the your business plan.
8. Financial Plan
This is where investors spend most of their time because financial plan gives details on how your business will reap great rewards for them immediately or in the near future. Your pro forma statements, say future projections must include dates for market penetration rates, operating margins, and employee head counts, acquisitions, mergers and IPOs. Let it be realistic
9. Business Plan Appendix
At this juncture , it entails overview documentation. This section backs up the claims made in the executive summary, Financial Plan and the rest of the tips or sections. Technical drawings , patent information, letters from partners and/ or customers, a thorough list of competitors and list of key customers should be provided and documented for investors.
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