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Whether you start a new business, diversify your markets, introduce new products, or attract investors to your business, a well structured Business Plan is essential!  

  A Business Plan is your Roadmap to Success!!

Why a Business Plan?

A fair question! Business plans are used by business managers (including owners and entrepreneurs) and potential investors. 

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Preparation of a good plan shows managementís ability to critically evaluate their venture and communicate their strategy;

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The plan provides an objective basis with which to evaluate the business; and

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The plan provides sufficient information to begin a more detailed analysis.

Key Benefits of a Business Plan

Managers receive tremendous benefits by preparing a business development plan.  These include:

bulletA good business plan forces you to take a realistic, objective, unemotional look at your business.
bulletThe act of planning forces managers to articulate and build consensus on the firmís strategic direction.
bulletIt describes your business in detail.
bulletIt takes an objective look at the business climate, including the competitive environment in which your business operates.  It therefore lowers the risk of failure for introduction of new products and services.
bulletIt is an operating tool to help you manage your business.
bulletA business plan becomes an important marketing tool, both internally and externally:
bulletA good business plan puts a premium on your business' worth if you want to sell it. 
bulletIf you need financing, a business plan becomes a complete proposal.
bulletThe plan assists managers in responding to market opportunities and threats while guiding the business.  It therefore gives you the direction you need to take in order to achieve your goals.
bulletA good business plan will save time and money.

Why outsource your Business Planning? 

It has been argued that, in order to maximize their effectiveness, business plans should be prepared by the managers who are going to use them.

There are many reasons why this advice is often overruled in favor of using consultants to provide assistance during the business planning process.  The most important is the large number of topics that the business plan must include.  In fact, each component encompasses an entire field of knowledge.  Managers often do not have the in-house skills available to cover all areas of the business plan effectively.  In conjunction with the range of topics covered by the business plan, is the sheer volume of work needed.  Outsourcing your business plan frees you to dedicate your efforts to keeping the business moving forward.

 

What goes into a Business Plan?

This is a question that any new business owner should ask and often don't ask.   The body of the business plan can be divided into four distinct sections as indicated below

Description of the Business
Firstly, a Business Plan contains a complete description of the business, which starts with the overall purpose objective of that business, the mission and the long term goals of this business.

A Good question to ask is: "What business am I in?"  The answer to this question includes the products, the market and the services as well as a thorough description of what makes your business unique and appealing to the market.

The business description is divided into three sections:  
Section 1 actually describes your business. This includes among others, legalities, business form, proprietorship, partnerships, licenses, permits, etc.  Also the business type: merchandizing, manufacturing or service, description of the product or service, why and how the business will be profitable, the growth opportunities.  Will franchising impact on growth opportunities?  Very important is what can be learnt from outside sources?
 
Section 2 The product or services you will be offering.  The challenge in this section is to describe the product or service from the customers' perspective.  This type of anticipation is helpful in building customer satisfaction and loyalty.  Most importantly is to describe exactly what is different or unique about the product or service that will appeal to the customer.
 
Section 3  The location of your business.  The location of your business can play a decisive role in its success or failure. Your location should be built around your customers, it should be accessible and it should provide a sense of security. Consider these questions when addressing this section of your business plan:

1.       What are your location needs?

2.       What kind of space will you need?

3.       Why is the area desirable? The building desirable?

4.        Is it easily accessible? Is public transportation available? Is street lighting adequate?

5.       Are market shifts or demographic shifts occurring?

Management and Organization

If external financing is being sought for the venture, particular attention attention should be paid to this section.  Most investors place a heavy emphasis on the individuals involved in the business because management is one of the key factors responsible for the success or failure of a business.  Investors will evaluate the technical and managerial experience of the parties involved.
Therefore the business development plan must clearly and completely describe the management structure and the people who will operate the business.  The key positions in the company; the key employeesí education, skills and experience and the board of directors should be outlined.  If there are absences or weaknesses on your management team, explain how you will develop and strengthen the management team.

Risk Factors

The idea behind this section is to show potential investors that you have fully considered the business environment.  In order to accomplish this several elements of the risk facing the venture must be identified. These include the risks the business will face; how the risks can be minimized or avoided; the impact of the risks on the business; and the steps which can be taken to mitigate their impact.

If the plan is intended for in-house use, the risk analysis will reveal what aspects of the business are vulnerable.  Some potential risks include the risk of new entrants, possible scarcity of vital raw materials, market share shake-out or the poor health of a key management figure.

The Marketing Plan

Marketing plays a vital role in successful business ventures. How well you market you business, along with a few other considerations, will ultimately determine your degree of success or failure. The key element of a successful marketing plan is to know your customers - their likes, dislikes, expectations. By identifying these factors, you can develop a marketing strategy that will allow you to arouse and fulfill their needs.

Identify your customers by their age, sex, income/educational level and residence. At first, target only those customers who are more likely to purchase your product or service. As your customer base expands, you may need to consider modifying the marketing plan to include other customers or products.

A detailed analysis of market characteristics, segments and trends is necessary.  The goal of the Market Analysis is to show how the company views the market, and to determine how sound the market really is.

Outside investors, particularly venture capitalists place a heavy emphasis on this section.  To appeal to this group, the market's grow rate must be high, a ten fold growth in 5 years is typical.

Even for inside use, pay particular attention to the size of the market and the growth rate.  Is the market capable of sustaining your product or service as well as competitors and substitutes?  Is your goal to increase market penetration or to displace competitors?

Developing this section will give you an idea of what your potential revenues will be. 

Issues that must be addressed are:

 
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What is the target market (who has a need for your product or service)?

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How is the market segmented? Some examples are: customer age, income, lifestyle, and geographical location;

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How large is the market in total and by segment?

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What are the growth trends in the market and in the various segments?

The analysis should also focus on buyer behavior, and describe the target marketís product or service preferences and reasons for purchasing. 

A complete picture of the competitive environment is vital.  This is an analysis of the industry which includes its size, maturity, and competitive nature coupled with an analysis of the firms (direct and substitute) competing in the industry.  In addition to establishing the level of rivalry in the industry, a focused environmental analysis should be included which strives to ascertain the effects of societal, political, technological, and economic trends on the business.

 
 
 
Financial Management
After Completion of all of the above sections, it is possible to build a five-year financial forecast from the information contained in the plan. We believe a five-year forecast fully describes the expected sales growth for the business.  Bear in mind that the first year forecast is the most important.  The element of uncertainty contained in a projection grows proportionally with the length of the forecast.  But how well you manage the finances of your business is the cornerstone of every successful business venture. Each year thousands of potentially successful businesses fail because of poor financial management. 

The forecast includes pro-forma balance sheets, income statements and cash flow statements.  Prepare the statements on a monthly basis for the first year, a quarterly basis for the next two years and annually for the last two.  Including a capital plan (budget) adds to the detail given in the financial statements.  All assumptions used in developing the forecast should be clearly stated.  This prevents any misunderstandings.

 

How we can help you

Within Quartz Technology, we have the tools necessary to help you build your highway to success.
It is our motto and our mission to help build a successful business environment in our country.  All you need to do is pick up a  telephone and give us a call, or write to us or fill in the information sheet.  We will contact you immediately to discuss your needs.
 
Our Guarantee
Your involvement with us WILL have a positive effect on your business. We are there to lead your organization to leadership and we will ensure that together you will end up at the top!
 
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Last modified: May 31, 2013