A good bankable business plan is one that can be taken to a bank for consideration for a loan or investors, to fund the goals and obje...
A good bankable business plan is one that can be taken to a bank
for consideration for a loan or investors, to fund the goals and objective of a
business. It must be of good quality and positively answer questions about the
business proposal.
The business plan helps to accomplish many things, principal
among them is that firstly, it aligns the management team towards a common set
of goals. Secondly, it allows management to critically look at the vision,
goals, and viability of the business. Thirdly, the business plan allows the
business promoters to assess and test their business proposals and assumptions
to see if there are major bottlenecks or problems. It allows the entrepreneur
to answer some key questions about his business idea, without losing money or committing
its promoters to any substantial expenditure or investment.
The process of producing a business plan acts as a very
efficient method of focusing the ideas of potential entrepreneurs in terms of
defining their activities to organize and run the business. The ability to
prepare a comprehensive and coherent business plan is an absolute imperative
for anyone starting in business and particularly if finance is required from
outside the business.
The planning process establishes parameters and specific targets
which provide a yardstick against which the progress and profitability of the
business can be measured. In terms of the structure of a business plan, its
good at the start of the document to have a concise executive summary, it
should not be more than two pages. It should communicate the value proposition
of the business, what the business wants to do, how it will make money and why
customers will want to pay for your product or service. Show high level figures
of money /funding the business require and how you plan to use it.
The business plan in a few lines must say what you are doing
(goals and objectives), why you have a competitive advantage in your proposed
target market and its size? how fast is it growing? What are your strengths and
weaknesses; where are the opportunities and threats, known risks to the
business, and how will you deal with them. There is a need to assess the
potential viability of the business through market research and segmentation,
assessment of potential sales turnover, and profit margins, breakeven analysis,
availability of regular supplies, availability of competent staff, adequate
working capital etc.
The business plan must provide measurable targets against which
we can compare and monitor progress and achievement, this include annual
budget, forecast income and expenditure, forecast balance sheets (Assets and
Liabilities), and cash flow statements.
The business plan needs to consider the competition, who are
they? What do they sell? How much market share do they have? Why will customers
choose your product or service instead of theirs? Lastly, provide information
on the business team and if the entrepreneur actually has the necessary skills
and competencies to manage the business. It is important for the business owner
to have technical knowledge of the product or service.
The author, Mr. Abbey Dipo Onasanya is a Managing Consultant
with Goldnet Consulting Ltd in the UK, established since 2007. The company
provides consulting service in Strategic and Operations Management, Business
and Management advisory, Project and Programme Management.
PS: "Unless commitment is made, there are only promises and
hopes... but no plans".
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