Loy Okezie

You’ve probably heard this several times, but I’m going to say it again:

If you are considering setting up a business, you need to develop a business plan.

But, I’m going to add this (so quote me if you like):

It is not a must to write up a business plan when you’re starting up. The most important thing is to have an idea and a vision from the start.

After you have launched your business startup with some seed capital (either from your job salary, personal savings or from friends and family), you can start developing a business plan in order to seek funding or sponsorship from angel investors or venture capital firms, as the case may be.

If you don’t know how to develop a business plan, perhaps this article will help you in planning your business from startup to stardom.

Here are 7 strategic steps to developing a winning business plan.

1. Research

You need to understand the various sections required in a business plan, the purpose of the various sections, as well as the objectives of the plan. These sections will include: Executive Summary, Mission, Strategy, Market Pain & Solutions, Market Opportunities, Management Team, Boards and Advisors, Achievements & Assets, Customers and/or Partners, Competition, Technology & IP, Business Model, Financial Projections, Fund Raising, and other information.

2. Decide

As much as the ‘idea’ of your business startup is important, the operational and logistical requirements are equally critical. You need to know how to choose the right partner(s), decide who will make up your board of directors and advisors, as well as whether you will operate as sole-owner, partnership or limited company.

Before you decide, you can get the help of a local accountant, business consultant or lawyer. Equally, issues such as VAT obligations, trade marks, employment contracts, etc should be well explained and understood.

3. Define

Before developing a business plan, clearly define the benefits of your business startup to consumers, users, clients, etc. Define your business model, solution strategy, marketing strategy and market competition.

4. Manage

Even if you’re not good with figures, you should strive to have a good understanding of ‘the numbers’ that will impact your business. Here are a few of them: Start-up Costs, Break-even point, Cash flow analysis & forecast for 1 – 3 years, Funding requirements and Balance sheet reports. Your accountant or business consultant should be able to help you with these things.

5. Obtain

Here, you need to obtain industry analysis of other business startups or companies that are into your kind of business or offering your type of service. You need to undertake a detailed market research to help you understand your target market.

6. Search

I’ll assume you know what SEO means (i.e. Search Engine Optimization) and how it plays a huge role in your business startup visibility on the web. So before choosing a URL or domain/startup name, find out the terms and keywords related to your business or service that are most heavily searched on the Internet. Simply go to: http://www.google.com/keywords and look for terms that relate to your business. Trust me, it will help you to identify your competitors.

7. Assess

It is always difficult to predict the level of demand for your products or services. However, it is recommended to use conservative estimates (or assumptions) on likely demand and to use proxies where data is hard to come by.

Instead of claiming that there are no comparative figures available, you should use proxies to determine demand estimates even when the idea is innovative or unique. For example, if your site’s user base eventually becomes lower than you predicted at the beginning of your venture, you may fail to generate enough revenue to cover the large cost base that you’ve incurred.

My hope is that you’ve benefited from this article. In the future, I’ll be sharing tips on how to write a winning business plan.

Photo via flickr by ksgirl

Tags: balance sheet, business plan, cash flow analysis, seo, startup costs