A business plan is like a guide, a prospect, or direction of the business especially for a business that is about to kick of. It is expected that before you open a business, you must have drawn a proper plan for the business, how you intend to start and where you hope to be in the future.
A properly constructed business plan takes into consideration the capital(loan or savings), location, expenditure ( includes salaries, cost of equipment and daily running) and much more.
A business plan is not only for the onset of the business as it can be used as a roadmap as the business progress and to monitor improvement and direction of the business. A proper business plan can keep you in check in terms of spending and enable you to plan for future expenses.
A properly drawn business plan can be a requirement in accessing loan and can easily facilitate loans as the loan officer will see a well-structured business with direction and well-calculated profit time table.
In drawing a business plan, you should put the following into consideration.
1. Analyze Your Potential Market
In drawing up a business plan, you have to analyze the potential of that services or goods in the available market. You will also have to analyse the competitors.
2. Establish the Size of Your Potential Market
You will also, through your business plan, analyze the size of the potential market in the locality and how you are going to attract them and service them. For example, if you are opening a barbing salon, you will have to establish the size and type of the locality you are opening the shop. A barbing salon will thrive well in a residential area and a populated area full of middle-class people than in an industrial area or less populated locality.
3. The Establishment Initial Needs
In your business plan, you will also have to put into consideration the company needs, what you will need to establish your company. Still using a barbing salon as an example, you will have to put into consideration the cost of buying mirrors, chairs, clippers, etc. You will also have to consider electric bills and generators set and estimate the amount to spend on fuel. This is part of the capital to start up the business and also involve recurrent expenditures.
You will also consider your capital to start the business, do you have enough capital or are you going to loan. Either way, you have to find the source of your capital and analyze at what time frame it will be possible to start making a profit after you have recovered your capital. This analysis is very important when sourcing for a loan as you will be able to provide a timeframe to start paying your creditors.
This is very important as this will mostly determine your client base while writing a business plan. Proper analyses should be carried out to establish in a location that you good or services will be highly patronized. You should be able to identify location where your good or services will be highly patronized so as to increase profit potential. It is more profitable to establish a restaurant in an industrial area than in a residential area, or more profitable to establish a supermarket in a residential area than in an industrial area.
Read Also: How to Write a Business Proposal.