Business Corner: WRITING A BUSINESS PLAN – III

6. Operations plan: At this point, you go from dreamer to business owner because if your business is not designed to make money, you’ve just an expensive hobby. This section explains how you plan to operate the business; devising a means to keep down costs and maximize profits. Whether running your business is simple or complicated, various issues that can affect its day-to-day running should be addressed as a detailed part of your plan. These issues include clear process for delivery, handling customer complaints, personnel decisions, raw material purchases, emergency handling, business permits, inventory management, insurance requirements, personnel training, etc. These and more can keep you from opening your business and hence a plan needs to be in place to tackle them beforehand.

7. Management team: Most businesses start as a management team of one, and as the business grows new employees are introduced with skills that are required at various stages of the business. Highlighting your expertise and background in this section is critical to giving your business credibility, particularly in the early years.

8. Intellectual property strategy: Almost every business has an intellectual property of some value and will need an intellectual property strategy. A brand is an important form of intellectual property, and also any information produced and managed by the business. Other essential areas of intellectual property include patent, copyright, trademark and trade secret. A strategy to protect the IP of a business should be stated in this section of the business plan.

9. Cash flow projections: Typically, the first thing any investor or bank will want to know is at how much money your business will generate and how soon will it be profitable. A tight, realistic financial plan that includes the amount of personal financial risk you are putting on the table will need to be created. In developing sales projections, it is important to be conservative and realistic, hence entrepreneurs are advised to focus sales projections around 30-day goals. The plan should also include a cash-flow projection and a break-even analysis. The process of developing your financial plan will help you understand how many sales must be generated to cover your expenses and eventually make you a little cash. The best estimate of the financial future of your business is your financial plan; it is regarded an estimate because you do not have an idea of how your business will perform financially until you are in operations for six months to a year. Your plan should include a one year operating budget and up to three years of sales projections.

Developing a viable business plan requires a high level of patience and consistency, the end result being a foundation in preventing the decline of a new or existing business. Outsourcing this task is a possibility as consultants possess the ability to create strong and realistic plans for your business. I sincerely hope this article and the ones preceding it have helped bring a clearer view on the necessity of having a business plan.

Make 2016 your best year yet!

Osatohanmwen Omwanghe