Writing a Business Plan – Part I
A friend of mine invited me for a cup of tea in one of the stylish hotels in Nairobi. She pleaded that I should not miss this humble request since we had to discus something very important. As we were having a cup of tea, she laid a question on the table on how to write a business plan. We had a nice discussion after that I made up my mind to answer this question here. I believe it will help all CEO fans.
When it comes to writing a business plan, the first step you should take as an entrepreneur is figuring out your business model. I am going to post other subsequent series on how to write a good business plan. Today, I want to focus on crafting a business model which is the first part in developing a good business plan.
What do I need to develop my business plan?
There are a lot of things you need to put in place when it comes to launching a business. For you to make sure you establish a well-executed business endeavor, don’t be tempted to skip the important step of establishing your business model. Your
business models will describe how your business is structured and the methods for maximizing revenues and profits.
Before you start writing your business plan, identify your business model because it will be a key aspect that you explain in the plan. I believe you have seen the reason I am moved to do it first. Your business model outlines
your strategy and often includes information or processes that may be considered proprietary or confidential.
A well-developed business model details the viability of your business concept and goes deeply to explore the demand of the marketplace, the competition, competitive advantages such as pricing, quality or availability and the ins and outs of getting the product or service to market. The business model makes you think about what you plan to offer your customers. It answers questions about the price, distribution (including where and how you will sell), your niche customer and when the market will be ready. Your business model is often completely confidential, and while it may be pictured in the business plan, it is rarely completely revealed.
Basically, you need to clarify your business model before your write your business plan.
If you’ve got a business model, but no business plan yet, you have a third of the work already done. The exploration necessary in developing a solid business model often will help you streamline the process of writing your business plan.
As you grow your business, you may find need to make substantial changes to your business model. Your niche or product offering could change. The needs of the market may change. If you stay on top of the trends in your industry, you won’t be surprised by changes over time. These changes are unavoidable and often serve to strengthen your business concept and ultimately your business.
Facebook began in February 4, 2004 as a social networking site for university students, creating an invitation-only platform that was in high demand from students. Once it started to reach its upper limit on growth, Facebook expanded to a younger audience by opening up to high school students, and eventually to the rest of the world.
I simply point out that over years, Facebook and the needs of the market has changed tremendously, and it’s important for you to pay attention and tweak your business model from time to time so that you don’t get left behind.