A business plan is a plan of goals for your business.
A business plan helps you define what you want to achieve in your business and why.
A business plan answers your why. Have you ever started a business without a plan? Now, did your business go as planned?
If you fail to plan, you plan to fail is an adage that rings true.
Can you wake up in the morning and rush to war?
Did you see the level of preparedness the KDF soldiers need or the athletes?
Your business plan helps you answer the aim, your objective, or what you want to achieve with your business.
I knew I wanted to write, so for a few months then years I kept uncovering what freelance writing was. I didn’t have a plan I just knew.
Every time you go to your business knowledge, without planning, you plan to achieve nothing but lessons, mistakes and failure.
And that’s what happened to my freelance writing career.
Knowing is good. Knowing that you’re passionate about something but that’s not enough.
You have to ask yourself, how am I going to make a difference with my knowledge?
Or how am I going to make money with my writing talent?
Or how am I going to make a difference in the world with this business idea?
A business plan is a guideline.
That doesn’t mean you must stick to the business plan. Jeff Bezos says it well, ‘A business plan is a guide and it’s wise to have one down’.
Not his exact words but he continues, ‘Though you will write a business plan, you will meet things along the way. Don’t be afraid to tweak the plan. Plans are good.
A lot of people when they hear the word business plan believe it’s a lengthy 20-page process.
And others spend their entire life writing a business plan.
What’s a Business Plan?
What’s really a business plan and why are entrepreneurs asked to have one?
A business plan keeps you on target going forward.
I wrote a business plan when starting my pillow business.
I can promise you the plan wasn’t for a pillow business but for a women’s handbag business.
In other words, my business plan was a waste of pen, ink, space and paper. Why? I copied my plan from the internet.
The internet is a good resource for us all, information is available for us from any gadget and from anywhere in the world.
At the click of a button, you can click, copy and paste useful pieces of a business plan. And that’s what I did. I was too lazy to read further into what my business solved.
I knew I wanted to sew handbags because I saw a need.
At the time, I saw a plan as a waste of my time so, why not copy what’s on the internet.
I didn’t use a plan as a way of answering questions for my business or as a way forward for me.
A business plan is a tool in every business that helps you review your plans or goals.
This means, do you have an established business?
Do you have a plan for it?
Some people write business plans for old businesses because they want to change their business models or want to branch into something new.
What Makes a Good Business Plan?
A good business plan outlines the projected costs and pitfalls in every decision made.
A business plan helps you predict the direction of your business.
Business plans aren’t identical but they have the same elements for example:
Description of the business
Services and products
How to achieve the goals set by the entrepreneur
An overview of the industry
How an entrepreneur plans to distinguish themselves from competitors
What are the Components of a Business Plan?
A business plan includes the following elements
Executive Summary – which includes the mission statement, outlines the company’s leadership, employees, operations and locations
Products and Services – includes pricing, product lifespan, benefits of your products and services to the consumers.
Other types of information to include in the products and services include patents, production and manufacturing processes, information about research and development.
Market Analysis and Opportunities – a good understanding of your industry and what your offer is about.
An analysis of the target market, who the competition is and how the competition affects your operation. Describe the consumer demand for the product.
Sales and Marketing – how do you plan on attracting customers to your business?
How much is the budget for the marketing?
How will you make yourselves available to your customers?
What type of media will you use?
And do your customers use that media to find new businesses?
Financial Planning – the part of the business plan that’s a headache to entrepreneurs; predicting the amount of money needed for advertising, hiring, prototypes.
This includes financial statements, balance sheets.
Budget – includes the cost of staffing, development, manufacturing, marketing and related expenditure.
Competitor Analysis – includes the analysis of the competition, why customers choose them, the marketing strategy your competition use and why, the media your competition use for getting new customers and why they choose a particular media over another, what your competition isn’t doing and how will you fill the gap?
Operation Planning – where are you now, where do you want to be? how do you get where you want to be? and how do you measure your progress?
Financial Planning – includes the proformas ( projected financial statements. The proforma includes the overall budget, current and projected financial needs, market analysis, and marketing strategy.
Types of Business Plan
The Traditional Business Plan
It’s the business plan I used for my handbag business turned pillow business.
It’s the long and lengthy plan that everyone advises you to write.
This business plan is good if you’re going to ask for funding or looking for investors.
It’s also good to have a professional write it for you `
The Lean Business Plan
The lean business plan doesn’t mean you skimp on the details or do not pay attention to the details.
A lean plan is simplified and enables you to write or have a step by step guide rather than write business plans which you won’t use.
A business plan helps you understand exactly why you need a business plan for your business.
You won’t write a lean business plan and not take action.
The jargon used in the traditional plan gets simplified making your plan personal.
When your plan is personal you get motivated to take action.
You know what happens when you take action.
Tips for Writing a Business Plan
- Don’t write hundreds of pages of a plan that you will never use or remember. Keep in mind to answer questions like who does your business serve and why?
2. Make your plan concise for the reader and you
When writing a plan for your morning routine, do you write an elaborate plan where you cannot recall the details or do you write something you can memorise?
The reason I prefer the lean plan is you can memorise what each section of the business plan requires of you as an entrepreneur.
There’s no guesswork and jargon like what an executive summary gets explained in questions.
You understand the motive behind or the effort behind the plan.
You want to have a business plan that doesn’t overwhelm you but helps you answer questions like what does your business solve?
What do you aim to achieve with your business?
And why did you began your business?
For whom did you create your business?
And what products will your sell and how will you reach your customers?
When you have questions like these, it’s become easier for you as an entrepreneur and you get answers to questions you never paid attention to.
Plus you remember what each section of the plan reminds or wants of you.
Clarity brings forth a focus and focuses determination to succeed.
3. A guide
Remember a business plan is a guide.
Keep it like a guide, short and simple.
Do you remember the days before Google Maps?
You would get served with a map, to this day, some people use the good old map, foot map or drawings on the ground.
Your map doesn’t have to make you get lost along the way. Make your map and pay attention to what you want to achieve.
Don’t waste time drawing a whole map, like the analogue map, that makes you fidget or fumble along the road.
Make it straightforward for your peace of mind.
4. Let your business plan communicate
Your purpose, your why.
Because if you don’t realise what your why is, there’s no way you’re moving forward or anywhere.
You must first and foremost identify why you are beginning the business.
Is it to change lives or fill a need? The reason depends on you. Take time to analyse your why.
Describe management responsibilities
Provide a marketing strategy/plan
Evaluate the current and future competition
6. Rational or real
Make your business plan real for you and the customers you serve and financiers or investors.
Who Will Your Business Plan Convince?
Partners and Investors
Joint Ventures Between Companies
FAQs on What’s a Plan and How to Write a Business Plan
- What’s a business plan simple definition?
2. What’s a business plan purpose?
3. How much does a business plan cost?
4. How many hours does it take to write a business plan?
It depends on how pithy your business plan is.
5. When should you write a business plan?
6. How do I write a business plan for a startup?
Have a clear aim
Identify a target market
What are your goals and finances?
Define the power structure
Keep it short, concise and actionable.
Business plans enable entrepreneurs to have a picture of the potential costs of their business, what and who their competitors are and how to stand out from the competition.
A business plan helps you go back to your purpose.
Your purpose should be your drive when the going gets tough or when times get hard.
Are you beginning your business in Kenya offline or online?
Did you know that it’s important to have a business plan even if you are a freelance writer or a shoe shop owner? Do you know why business plans are important?
Or are you scared of writing a business plan because it’s lengthy and you don’t understand some jargon in the business plan?
Do you want to learn how to write a business plan that serves you, a business plan you can keep up with or tweak for your later business extensions?
Do you want to write a business plan that you can remember for the rest of your entrepreneurial life, even while asleep?
Well, learn why writing a business plan is important for any business whether online or offline.
Do you want to begin a small business in Kenya? Are you wondering how to get started writing a business plan?