Your micro business already has a business plan in the sense that just coming up with a business idea and how to execute it, is a ‘business plan’. However, how elaborate your thoughts are, and whether your thoughts still reside inside your head, or have been translated to paper or word processor is a different matter; and that makes a huge difference.
Most micro businesspersons in Aba never bother to have a business plan probably because they don’t fully appreciate the power and benefits of business plans for the success and survival of their businesses. Many a times when they do, it is only because loans or financial facilitators asked for it.
What is a Micro Business? What is a Business Plan? What are the benefits of a Business Plan for small and micro business success and survival? Please read on…
The Small and Medium Enterprises Agency of Nigeria (SMEDAN) defines the Micro enterprise business category as those with less than 10 employees and with assets base (excluding land and building) of less than ₦5 million (2012).
A Business Plan is a documented roadmap that explains your Business Idea and all the elements required to bring it to fruition. A good business plan contains an executive summary, business description, product and services description, management and organizational description, market analysis, market entry strategy, marketing plan, competitive analysis, etc.
In simply terms, a business owner should have clear-cut answers to questions about the business such as:
♦ What is my business all about (Executive Summary, Mission and Vision)?
♦ Why do I want to start this business (Aims and Objectives)?
♦ What is my Business Name?
♦ What is my Business Location?
♦ What needs or gaps will my business fulfil (Entry Strategy)?
♦ What are my Products and Services (Products Description)?
♦ How will the business make money (Business Model)?
♦ Who are my target Clients or Customers (Demography)?
♦ How do I reach out to Clients or Customers (Marketing Plan)?
♦ How much Money do I need to start this business (Start-up Capital)?
♦ What Assets do I need to start this business (Assets)?
♦ Where will the required Capital and Assets come from (Funding)?
♦ What expertise do I need to start this business (Skills-set)?
♦ What trainings do I need to start this business (Trainings)?
♦ Who and who are already in this business (Competitors)?
♦ Why will this business succeed (SWOT Analysis)?
As a small or micro business owner, if your answers to the above questions reside only in your head, then you have a business idea. But if your answers to these questions have been organized and transformed into its hardcopy or word processor equivalent, then you have a Business Plan.
Below are four great benefits of a Business Plan for your small or micro business success and survival:
♦ For an intending or start-up businessperson, a business plan will help to transform your brilliant business ideas into a real live and running business in a short period of time; because your business plan is a dependable roadmap pointing the way forward to your target destination.
♦ A business plan will greatly assist an existing or start-up business to attract the loans and investment funds it needs to grow, stabilize and succeed. This is because a Business Plan is the most effective way to generate and communicate your business ideas to others in a clear, complete and convincing manner. Potential business partners, investors and bankers are more likely to take a second look at your proposals if you have a professionally well-written business plan.
♦ A good business plan eliminates to a large extent the risk of business collapse during the first five years of business start-up. This is because a business plan exposes gaps and issues that were not apparent at the initial start-up stages; and thus gives you the opportunity to remedy them. A business plan keeps you prepared and more likely to survive the storm.
♦ A business plan allows you to see your business from a clear perspective that enables you to appreciate and understand how the different key elements of the business fit into one another. A business plan keeps you committed to your original key business ideas; and holds you accountable by evaluating your success or failure to meet your specific, measurable and time-stamped targets.
Business Plans are not only for start-ups looking to raise capital. Even well established businesses need business plans. Whether you are looking for start-up capital or want to expand your existing business, a business plan will surely do you a lot of good. A good business plan can throw up new and exciting alternative ideas that could make your original plan much better and profitable.
"Give me six hours to chop down a tree and I will spend the first four sharpening the axe." ...Abraham Lincoln
What do you think? Please leave your comment in the comments box below.
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© Jay Onwukwe
