Many people think that the only reason to develop a business plan is to convince potential lenders or investors to provide financial backing. This view is somehow shortsighted.
A business plan does help you quantify your goals. What more? A well-developed plan can serve as one of your most important management tools. A good plan will provide a blueprint and step-by-step instructions on how to translate your ideas into a profitably marketed service or product.
Remember that no two business plans will look alike. A poultry business plan in Thekerani will be different from one developed for Blantyre. There are a number of key considerations that will play an important role in shaping the content. These considerations include complexity of the targeted market as well as whether you’re writing a plan for a new business opportunity, or is it a plan that updates or supersedes an already existing plan. Obviously, your business position in the life cycle will have a significant impact on the type of planning that is needed.
An ongoing business might require a plan that relates primarily to a new market that it wants to enter. For example, an entrepreneur supplying poultry-products in entertainment centres, may also wish to introduce a new product line like selling chicken intestines fried together with lower chicken legs (zipalasilo zokulunga matumbo). She may go a step further by venturing into a new market penetrating the secondary schools.
But what are the benefits of a business plan? Does one really need a business plan for opening a kaunjika or doughnut business—a business so small and meant to just complement their salaried income? I am glad you ask.
Everyone who opens his or her own business has a plan, however informal. A smallholder coffee farmer in Mphompha may not have a formal, written plan outlining the steps to be taken. But they will usually have organised the relevant information in their head before starting the coffee farm. They will have performed their own analysis of the market, and decided that they could make a living by starting out on their own.
When does it make sense to create a business plan? Few people wake up in the morning and say: “Wooh! It seems like a nice day to write a business plan.” Taking on a project of this size should not be done lightly. But you have to keep the job in perspective. If you are just starting out in business, the time it takes to create the first plan will be more than repaid by the insight you gain. If you are already in business, but have never created a business plan, you will be in a much better position to assess opportunities and risks that accompany the various changes you may be considering.
So, whether you are into starting a small business that will just complement your salaried job earnings or indeed wish to use the business as an exit point from your salaried job, a business plan will help you get focused at attaining your goals.
Next week, we are discussing what exactly a business plan can do for you. Have a blessed weekend!