Drawing Up A Business Plan

The number of great concepts that have not been transformed into profitable concerns is quite scary. More often than not, the entrepreneurs in question are extremely hard working and dedicated, but have failed to secure much needed investment of capital, be it financial or intellectual. A well-prepared Business Plan will not only open doors for you at financial institutions but will also attract other potential stakeholders.

The following is a guide to drawing up an Effective Business Plan, to be used as a framework for your concept, but still requires an expert’s opinion before making any submissions

Business details

• Name of business or trading name
• Physical address
• Occupancy status: owner/tenant, if owner include your net equity in property
• Contact person, including current position, telephone numbers  and e-mail

Reasons for funding application

• New business, expanding current concern or taking over an existing operation
• Assets that finance will cover
• Owners/shareholders contribution both cash and fixed assets

Description and overview

• Type of business, namely: partnership, closed corporation, private/public company or franchise
• Nature of enterprise (retail, manufacturing etc.)
• Detailed ownership breakdown
• Staff complement
• Age of operation
• What kind insurance is in place

Operations

• Products or services that are provided
• Current and projected offerings
• Market location and logistics
• Existing pipeline (tenders and long-term contracts)
• Turnover , past statements and expected future revenue

Environment (Sales)

• Large customers being serviced, and those in your sights
• Future target market
• Sales forecast and budget

Manufacturing business environment

• Current processes and plans
• Production capacity
• Essential major equipment
• Future profit expectations
• Detailed stock-value appraisal

Competition

• List realistic competitors and their market share
• Do they threaten your market share, now or with future plans?
• What sets you apart?

Financials:

Debtors

• Percentage of annual sales on credit
• Details of terms given
• Is it in accordance with industry norms?
• How is bad debt managed?

Creditors

• List of, and length of relationship with, major suppliers
• Purchasers budget is a bonus, but not essential
• Outstanding debt
• Sureties you have provided

Review

• Existing operations must produce most recent balance sheet, profit and loss account and cash flow statement
• New business need to furnish reputably supported projections of cash flow, income and balance sheet
• The details of financial advisor: name, address and contact details
• List of shareholders/partners assets
• Three- year cash projection
• Personal bank statements for the last three months

The details listed above need to be presented in a fully-proofed and bound fashion, with extensive information on financials and ownership.

Everything needs to be preceded by an Executive summary, which is never longer than one page, and provides a concise explanation of the concept and the nature of funding requested.