A business plan for an entrepreneur

Some have asked me why banks often reject their loan applications. There are many reasons banks can use to reject an application. These can be a lack of adequate collateral, incorrect cash flows, or an unconvincing business plan. I believe it is extremely important that I explain more about a compelling business plan. A business trip is indeed rewarding and also a journey of discovery. We live in a world governed by laws. Disregarding the law in a particular aspect means failure in that area. Business should not be spared either. There are laws of success that govern business.

Proper planning is necessary for a business to grow and be sustainable. There is a popular saying, “Failure to plan means failure” (Benjamin Franklin), this proverb may sound like music to your ears, but business planning is a key area that shows the importance of planning for any project. Unfortunately, this planning step is often overlooked and the result is always disastrous.

There is a lot of money in Zimbabwe that companies could tap into if they plan well. Some good business ideas die simply because they lack adequate business plans to attract funding.

What is a business plan?

A business plan is a well-articulated road map that details how a business plans to achieve its goals and objectives. It aims to create a written roadmap for the company from a marketing, financial and operational perspective. Both startups and established companies use business plans. A business plan is a document that shows strategic action items. Planning involves setting business goals for a specific period and formulating different courses of action to achieve those goals, choosing the best possible options (or alternatives) from the various available activities. This applies to both ends, which are: what is to be done and how it is to be done. It bridges the gap between where we are and where we want to be. It is a rational approach in which all members of the organization must work to achieve the goals of the organization. In fact, every business should plan, try to create a to-do list to achieve these daily goals.

It is an aggregated company structure. To run a business successfully, there is no alternative but to develop a business plan. Depending on the industry, a business plan can sometimes be considered a business proposal, investment prospectus, risk plan, loan proposal, etc.

Using a business plan

It is used by financiers and investors. Banks, for example, want to see how a company can achieve its goals. The plan is used to attract investment before the company has established a proven track record of success. Thus, it helps in securing loans from financial institutions. For large organizations, a business plan can serve to keep the company’s management team on par with strategic actions and the achievement of set goals. They are especially useful for startups because they show the way. Ideally, the plan is periodically reviewed and updated to reflect achieved or changed goals. Sometimes a new business plan is created for an established company that has decided to move in a new direction. It provides business direction. A business plan reduces the risk of uncertainty. This reduces duplication and wasteful operations. Planning encourages innovative ideas. Decision making is made easier. Planning defines control standards.

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1. A business plan is a very important and strategic tool for entrepreneurs.

It helps entrepreneurs focus on the specific steps they need to take to make their business ideas a success, and helps them achieve their short-term and long-term goals. Although it is necessary, some entrepreneurs do not want to put it in writing. They believe that every day should be different, and others also think that they are driven by the course of the economy, especially in a hyperinflationary environment like the Zimbabwean economy. However, brilliant business ideas can be useless if you cannot formulate, execute and implement a strategic plan to make your business idea work. If you want to raise funds from institutional investors and lenders, keep in mind that a good business plan is extremely valuable. The goal is to create a well-documented plan that speaks for itself. It should be clear and easy to read and understand.

2. Raising money for your business

Potential investors or lenders want a written business plan before giving them money. In Zimbabwe, so many companies have failed before and to mitigate the risk, investors, banks etc. a business plan is needed to see if management knows the ins and outs of their business. A description of the business concept alone is not enough. The plan should include a thorough business and financial plan that shows the likelihood of success and how much the business needs to be successful in the long term.

3. Make thoughtful decisions

In addition to banks, a business plan acts as a guide for an entrepreneur. Deviations from the guide are kept to a minimum. A business plan helps you define and focus your business ideas and strategies. Since the plan touches on many facets, the entrepreneur will not only focus on financial issues, but also on management issues, human resource planning, technology and creating value for customers.

4. Identification of possible shortcomings

A business plan helps identify potential gaps in your idea. You can also share the plan with others who can give you their opinion and advice. Find experts and professionals who can give you invaluable advice and share your plan with them. Even banks can tell you about the risk associated with your business when you apply for a loan.

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5. Communicate your ideas with interested parties – viability

A business plan is a communication tool you can use to secure investment capital from financial institutions or lenders such as banks. You can also use it to convince people to work for your company, secure credit from suppliers, and attract potential customers. For an international company that wants to invest locally, ZIDA requires a well-written plan to license the company. For special licenses such as telecommunication licenses, the regulatory authorities also review the business plan and business proposal.

6. Drawing up a business plan involves a lot of thought.

You need to consider what you want to do and use that as a starting point. It doesn’t have to be complicated. Basically, your plan should define where you are now, where you want your business to go, and how you’re going to get there. Writing a good business plan does not guarantee success, but it can greatly reduce the likelihood of failure. Plus, even if you’re not looking for investment, your business plans will quickly fall apart without a plan to guide them.

7. Planning reduces the risks of uncertainty

Planning helps an entrepreneur to look ahead and anticipate changes by deciding in advance the tasks to be carried out. A business plan shows a way to deal with changes and uncertain (unexpected) events. Changes or events cannot be prevented (removed), but they can be anticipated (anticipated) and management responses to them can be designed in advance. Thus reducing the impact of risk.

8. Planning reduces duplication and wasteful activities

A good business plan should show coordination of efforts across departments, divisions, and individuals. It should also provide clarity of thought and action and help you work smoothly without interruptions. It must demonstrate to interested parties, such as the Bank, that confusion, misunderstanding and futility have been minimized. This makes it easier to detect inefficiencies and reduce work pressure.

9. A good plan defines control standards

Control involves comparing actual performance with predetermined standards. In case of any deviation, the management can take measures to improve the results. All this is shown in the business plan. Without a business plan, the manager will have no standards to control the actual performance.

10. It should include an industry analysis:

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A good business plan consists of an industry background and overview, as well as important trends, key success factors, and future prospects. It gives the financier an open overview. It shows the profitability of the business.

Important elements of a business plan

1. Summary – This part includes the management structure of the company as well as the statement of the company’s mission.

2. Products and Services – The purpose of this part is to develop the services or products that the company offers or plans to offer in the market.

3. Market analysis – the company must demonstrate that it fully understands its market. Remember, the Bible says there is nothing new under the sun (Ecclesiastes 1:9), so business is not unique because trends affecting business have already been experienced by others.

4. Marketing strategy – the company must show how it plans to maintain its customer base and reach new customers.

5. Cash Flows – This should include financial projections for startups or historical projections for existing businesses.

6. Budget – A budget is essential to show investors or the bank how the company plans to use the funds.

Recommendations

It takes a lot of quality time to create a good business plan that speaks to your business. It’s always good to bring in experts to develop a talking business plan. FAILURE TO PLAN IS FAILED TO PLAN. To run a business successfully, there is no alternative but to develop a business plan. A business plan must be followed in order for the business to succeed, not simply put on the shelf. I encourage business leaders to turn to professionals like this writer to implement their business plans.

There are so many investors in Zimbabwe who are looking for places to put their money but they sometimes fail to get companies to put their money. I have been approached by a number of potential investors who want to invest in this country and I encourage companies to have proper business plans, cash flows, accounting records and systems in place. Banks and investors also like to invest their funds in a company that has an efficient and effective business plan that clearly shows its financial prospects and the potential for success in the planned business.

Francis Chitambira is the founder of Smartfiscal Consultants, a business consulting firm. He is a business consultant, entrepreneur, business trainer, tax consultant and business developer. He is interested in agriculture as well as marketing. He can be reached on Mobile / WhatsApp: +263775844941 or Email: [email protected]; website: www.smartfiscal.co.zw

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