Before an airline pilot taxis a plane onto the runway, he will have made a detailed flight navigation plan. This plan is documented and signed off.
by Clive Mphambela
It includes information about the destination, the route to be taken, the flight cruising altitude, time the journey will take, the weather conditions right across the route, and even the weather conditions at the destination.
The pilot makes sure all the pre-flight safety checks are done, that the plane has enough fuel; the instruments are working properly, among many issues. This is all done before the plane leaves for the take off runway.
This is the same approach that business owners must adopt in planning their business journeys.
Just imagine what would befall an aircraft that just sets off without the captain or pilot making a careful flight plan and making adequate preparations for the flight.
Most small businesses fail to take off properly because the proprietor ventures into business without a plan. Planning is, therefore, an essential element of success in business.
As the adage goes, “a bad plan is better than no plan at all”. While the statement is a bit of a “tongue in cheek”, the adage highlights the importance of planning.
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From a banker’s perspective, it is, therefore, always important for every small business owner to set out a written business plan in order for his business to achieve any chance or measure of short or long term success.
Writing a bankable business plan, where do you begin?
Before one decides to go into business, they first have to conceive an idea for a product or service. This idea must be first written down somewhere.
A successful entrepreneur will, therefore, routinely note down market gaps in products or services.
Actively thinking around these gaps will usually trigger ideas about new products and services that the business person can introduce into the market.
Writing things down is, therefore, a good habit, and avoids you forgetting about ideas and opportunities you may have observed in the market.
Why is a formal written down business plan important?
A formal written down business plan for starting and running your business successfully is essential.
You definitely need a written business plan if you are going to seek bank financing or investors for your business.
Banks and other investors will not invest in or lend to a small company just to be good or to lend a helping hand.
They will invest to make money and they expect to make a lot of money by investing in your business, together with the you, of course!
They, however, won’t even consider your business idea or proposal without anything written down.
What are the key elements of a bankable business plan?
A well-written business plan will promote the growth of your small business and provide an easy map for you to follow in implementing your business idea.
In fact, the business plan should act as a live document that continuously monitors your “work in progress”.
This is true even when your business is successful and growing, you should still maintain a current business plan.
It is, therefore, important to review your plan on an ongoing basis to see where things could be going wrong in order to take corrective action.
Continuous monitoring also ensures that you can build on the strong points in your business and thereby successfully exploit profit opportunities.
Why is prior market research very important?
Writing a business proposal is hard work and it must be informed by solid market research.
Critical information about the market size, customers, suppliers, competitors and financing options etc must be researched upfront as part of the idea generation process alluded above.
This information and research is what the business owner will need in order to write a comprehensive and bankable business plan.
If you do not get your information right, the business will falter right from the start.
However, if you get all your information correct, don’t spoil the effort by writing a poor business proposal.
It is very easy to fail to impress investors because of because of the language and style in which your proposal is written.
Your business plan needs to be clear and easy to read so your audience can concentrate on the key message and see the same opportunities that you are seeing in the market.
In order that your business plan becomes attractive, it must be original and creative, but the information must nonetheless remain factual.
The business plan must tell a compelling story about your business idea, but the story should be well grounded and supported by research.
In the next article, we will discuss the key elements of a sound, well-written business plan and how to organise the business plan ideas in a logical and informative way.
Clive Mphambela is a Banker. He writes in his capacity as the Advocacy Officer for the Bankers Association of Zimbabwe. BAZ expressly invites other stakeholders to give their valuable comments and feedback related to this article to him on [email protected] or on numbers 04-744686, 0772206913
