HOW TO WRITE A BANKABLE BUSINESS PLAN

IFE ADEDAPO examines the key features of a business plan that will attract investors

The ability to generate business ideas is not a problem for budding entrepreneurs, but their capability to attract external funds is a major obstacle.

 

Experts advise that every business owner should have a business plan to show a comprehensive research has been conducted on the business concept and indicate commitment to seeing the project to a successful completion.

What are the objectives of having a business plan?

The CEO, Angela Itambo Company, Mrs. Angela Ihunweze, says a business plan is a written document that outlines the goals and objectives of a particular business activity.

She says it can be used for the purpose of starting a new business, expanding or being able to show the competence of the company to handle a particular activity for a client.

She observes that most entrepreneurs in the country use business plans to raise funds or attract partners, however, she says that it is a map that provides alternative routes to an individual or business entity to get to its destination.

Ihunweze adds that it is a working document that should be owned by all businesses including those that do not require external funding.

According her, the plan for every business should be updated on a weekly basis to reflect the changing trends in the business environment such as the inflation rate, the high cost of raw materials, changes in tariffs, taxes among others.

For instance, she says the current state of the economy and the way it has affected some of the business parameters should be reflected whenever the plan is reviewed.

“It can either be typed or written with a pen depending on its use.

A standard business plan should be written in a language and manner which makes it interesting to read devoid of technical jargon that make it unappealing to read,” she adds.

The physical qualities of a business plan

A business consultant, Mr. David Adesokan, says that as regards physical features, a business plan should not discourage people from viewing it but should create a positive first impression.

According to him, entrepreneurs who put together a poor-looking document with several font style and size, haphazardly arranged will send the wrong message to the readers.

He says the impression this will create is that the business owner is sloppy, disorganised and incompetent to manage a business.

The cover page

Ihunweze explains that the title page should contain the business name, name of the manager(s)/partners/directors of the company and contact details like the office address, phone number, mailing address and the email address.

She says that some people make a mistake of not including their contact details in their business plan and deny themselves the opportunity to be reached by potential investors or lenders for further questions.

Table of contents

Angela Itambo’s CEO notes that although some people do not include table of contents in their plan, it is essential to include it because it will give the viewer easy access to pages they are more interested in.

According to her, banks and other financial institutions are more interested in finding out if the business is capable to generating sufficient cash flow to service a loan, as such, they will prefer to examine the financial analysis of the business.

Therefore, she says the table of content will be a pointer to the page where it can be found.

Ihunweze explains, “If it is being submitted to an interested investor who wants to have equity in that business, the individual will be particular about the management because if there is mismanagement irrespective of the business size, it will fail.”

Executive summary

Ihunweze explains that this chapter summarises every element that constitutes the chapters of the business plan.

According to her, the readers can examine it and if it is attractive to them, they will read the entire plan, adding that it is usually the last to be written.

In addition, she says, “If it is a start-up plan, the first chapter after the executive summary is the introduction to the business concept or description of the business idea. This chapter introduces the reader to the business, what it entails, how it will make money, the mission statement, the expectations of every customer when he or she buys its products or services. It includes the vision for the business in one year, three years and five years’ time.

“What are the success nuggets that they will use to ensure they arrive at that vision? If it is an existing business, it is like an overview of the company in question. When was it incorporated? What have been the milestones? Who are the targeted customers? What is the initial business model? Initially, how were they generating income and now what do they want to add to increase revenue? Where do they see themselves? What success or core values have they held together to ensure that they arrive at this destination?”

The marketing/ industry analysis

According to the business plan expert, this section exposes the reader to how the industry operates, the regulators, the advocacy groups that protect the interest of the business in the sector, and also the value of the market.

She says it should explain if the market is expanding, contracting or evolving. Who are the players in the market, the competitors and the buyers?

The business strategy

Ihunweze says this includes the marketing plan, operational plan, human resources plan and the production plan, all of which make up the running of a successful business.

“For you to run a successful; business, you must have enough market and strategy to attract new customers and retain them. You must have a standard operational process to produce the quality products or services. The number of employees you will need, their salaries and policies to sustain their desire to work and increase productivity,” she adds.

Financial analysis

She says, “For you to arrive at your destination, you need funds. Give information on how much you will need. How you intend to get the money. Will get it from a loan or investors? What are you expecting in return and when will you break even.”