How to Write an Effective Business Plan in 2020
Are you thinking of starting your own business? Or do you need to obtain a loan to start or fund your business? If your answer is yes to any of these, then you definitely need a business plan. An effective business plan is an essential ingredient for a successful business plan.
However, writing a business requires a high level of research and conciseness. The less ambiguous your plan is, the more likely it will help you achieve your goal. A lot of people therefore have problems writing a well aid out business plan. To make the whole process a lot easier, allnigeriainfo.ng provides you with a detailed guide on how to write an effective business plan.
What is a Business Plan?
A business plan can be described as a written document that defines the objectives, goal, strategies, sales and financial forecasts of your business.
Either you intend to start a business on your own or need to source for funds from external sources for a business, you need a business plan. A good business plan defines your business. It states what you want to achieve and how your business would be structured. And of course, a good business plan helps sell your business to potential customers, suppliers and investors.
Why You Should Write a Business Plan
A business plan is important for a lot of reasons.
- It helps you to have a clear vision of your business. Putting down your business idea gives a high level of clarity and ultimately increases your focus and drive.
- It can also help you identify potential problems before they come into reality. You can easily see where your plans do not connect or where there is a flaw in your strategy.
- A business plan also serves as a means to measure your progress in the course of the business. You will be able to determine how far you have grown in achieving your goals.
- A business plan can also help promote your business, it can serve as a form of marketing to customers, suppliers or potential investors.
- Finally, a business plan is highly essential if you intend to obtain a loan from a bank or solicit for funds from investors. A well-researched and detailed plan will more likely attract investors and lenders than an ambiguous haphazardly laid our plan.
Features of an Effective Business Plan
An effective business plan has certain features which must be included in it. It must answer some vital questions about your business.
– Goal of your business
This outlines the basic things your business will do. What problems will your business be solving? What solution(s) will your business provide?
– Products/ Services
Now this is where you state what product or service will be providing that solution. The avenue through which your business will be solving a problem. It could be physical products, virtual products or services.
How do you intend to get these solutions (product or service) to the people who need it (your potential customers)? Do you intend to own a physical or online store? Do you intend to produce and sell or dropship etc.
At what price will you be offering these solutions to your potential customers? How will you determine your prices? How do you calculate your costs and profits?
What are the objectives of the business? These include both long and short term objectives and how do you intend to measure your progress. What are the yardsticks to measure development of the business?
How to Write a Good Business Plan
So how do you write an effective business plan that will encompass all these attributes and help define your business? This article provides an answer to this question as well as basic steps on how to write the effective business plan.
- Ensure that you are familiar with your chosen terrain. Know the nature of the market and pricing policies.
- Have a good knowledge of your customers and their market behaviour. It is essential to conduct a market survey to be well informed on how customers will react to the introduction of a certain product or service.
- Avoid ambiguity in writing your business plan. Be clear and concise and do not include too many jargons.
- Also, when stating your actions, plans and conclusions, ensure that you add enough evidence to back them up. Do not just put up statements that will look like empty promises of a clueless politician. Add enough facts and evidence.
- Finally, remember that the business plan is a highly dynamic document. As the business grows and develops, always edit the plan to suit the situation at any moment. Your plan at the start of your business should not remain untouched after months or a few years. If you have achieved something, state it and also make clear what the next step is.