What a good business plan should contain

    
Every business should have a  plan, which  is the  road map to the future and is essential to getting funds, ADEMOLA ALAWIYE writes

Planning for the opening and operating of a business requires a thorough and realistic foundation. That’s really the basis for preparing a formal business plan. Experts say that a good business plan aligns the management team of a firm towards a common set of goals.

This enables the team or the entrepreneur to be able to work towards achieving a specific pursuit for the company. Experts believe that once the vision is on paper, it forces the entrepreneur to take a thorough look at the feasibility of the business.

They explain that a business plan can be likened to a dry run, aimed at  seeing if there is a major problem with the proposed business before losing any money in the business process. According to experts from the Harvard Business School, a business plan aims to attract professional investors. They note that these investors may be those who only have time for a cursory glance at each idea that crosses their desks, but may pick interest in any business with a decent plan.

Below are some important points that will help you know if your business plan is good enough, according to experts:

Must address the business purpose

The business plan is not a common thing in business. Experts say the entrepreneur has to start with whether or not the plan will achieve its business purpose. They note that some plans are drawn to get investment, while others are to support loan applications from financial institutions. These plans are drawn for special purposes that apply to some business situations. They say almost all businesses ought to develop management-oriented business plans that exist to help run the company.

Should have target functions

A business analyst, Mr. Richard Edoko, says that the business plan used internally by an entrepreneur doesn’t have to present the company to outsiders. He adds that the plan probably lives on a network, not on paper.

Experts note that some business plans have sales objectives, selling an idea, a team, and a market, to investors. They note that some others have a support objective, reassuring a lender about risk, usually with assets. According to them, a plan that may be great at selling the company may be bad at supporting a loan application, or for managing a company.

Should be realistic

Another feature of a good business plan is whether it is realistic or it can be implemented. Experts say that the entrepreneur will not get points for ideas that can’t be implemented. They note that an excellently researched and well written business plan for a product that can’t be built is not a good business plan.

According to them, the plan that requires millions of naira of investment but doesn’t have a management team that can get that investment is not a good plan. They further note that a plan that ignores a fatal flaw is not a good plan, but a bad one that may ruin the business in the end.

Must be able to define responsibilities clearly

The entrepreneur has to be able to identify a single person who will be responsible for every significant task and function. Experts note that a task that doesn’t have an owner is not likely to be implemented. The entrepreneur can go through a business plan and look to see whether or not he can recognise a specific person responsible for implementation at every point.

Clearly highlights assumptions

A good business plan must be able to highlight assumptions clearly. Experts say this is very important because business plans are always wrong. They note that business plans are done by humans, who are guessing the future, and humans guess wrong. As a result of this, business plans must clearly show assumptions up front because changed assumptions ought to lead to revised plans. The entrepreneur must identify assumptions and keep them visible during the planning process.

When it is easily understood by the entrepreneur

Experts say the plan must be precise and understandable when left to stand alone. Plans are judged by the business improvements they cause, and in some sense, by the implementation they cause. They note that the people in charge of a business plan have to know and understand the plan.

Should be on point

Edoko notes that every business plan ought to include tasks, deadlines, dates, forecasts, and budgets. It must be measurable and should also include metrics. He notes that the entrepreneur or the team must be able to ask the right questions while evaluating the plan.

Questions that should be asked include how to know in the long run if the plan was followed strictly. Also you should ask how you are to track actual results and compare them against the plan. You should also be able to find out if you are on plan or not.

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