A ‘business plan’ is much more than a tool for getting investors or loans from financial institutions. From my personal experience, a ‘business plan’ is an excellent tool to open up your mind to greater possibilities in your business.
Many people dread the idea of sitting down to write a plan for their business until there is a need to get loans or funds from investors. This is a very counterproductive way of starting or running a business.
“As long as you view and run your business from the one position …, even if that one position has worked for you in the past, you’ll NEVER achieve the success you should or could. If you keep looking at your business from the same, limited perspective, you’ll only see what you’re prepared to see and what you’ve seen in the past.”
– Jay Abraham
I have been making the same error for many years until something happened a few months ago.
I’ll tell you exactly how I revamped my business idea just by writing my business plan.
A friend of mine, a Managing Partner at LoftyInc Limited (a start-up incubation and funding & research and advisory company in Nigeria), called me to write a business plan for any business idea I had in mind, in order to join a contest to get investors. He referred me to a template on their website.
My aim as I began to write the business plan was to present the business idea as a simple, workable, and juicy project to investors.
But something magical happened.
More ideas began to open up in my mind as I wrote the plan. Having to refine, define and improve the idea brought out other possibilities I never thought about. Writing it on paper and brainstorming at the same time helped me clarify presumptions and break down clogs of clouded thinking affecting my reasoning.
However, the most amazing thing was the mathematics of the cash flow, required funding and the expected time frame before generating good profit.
As I did the calculations, I began to see the real potential of the business – how to minimize cost and maximize income. Interestingly, I began to get much more enthusiastic about the business and its possibilities in benefiting people and generating profit for us.
I finished writing the business plan with more zest and faith in the business idea than I originally had.
Below are the questions that opened up my mind while writing my business plan:
- What is the problem or need your idea solves?
- What is the size of the accessible market & the evidence that customers will buy your product or use the service?
- What differentiates you from the competition, and how do you intend to sustain that?
- Do you have a management team and/ or advisory board? What are their experiences?
- What is the current state of development of your product or service (e.g., beta, customer, trials, etc.)?
- What time frame is required to achieve significant revenue and/or positive cash flow?
- What is the amount of funding you are seeking?
If you can answer all these questions precisely, correctly and confidently, you are very well on your way to making your business a reality and a great success.
“If one does not know to which port one is sailing, no wind is favourable.”
– Seneca (5 BC – 65 AD)
All in all, use these vital business questions to open up your mind and business idea. If you intend to get a sponsor for your business, ensure you have all these indices at your finger tip to boost your confidence.