Business Plan writing Tips: Continuation... By Utibe Etim

Major expansion of existing business:

If your business plan is produced with the main aim of raising finance to expand your business, the two following issues have to be properly covered:

That the market of the business sector you are targeting has potential for further growth; and

That your entity, on the basis of its history and competitive strengths, is well positioned to win a substantial share of this market.

Regularly continuing business:

There are also business plans that do not anticipate significant growth or major investments and therefore are not concerned with the issue of raising additional funds. In such cases, business plans are produced to inform or get approval from the decision-making bodies and existing investors and/or the team of managers write themselves in order to reach a common understanding of their goals and to determine their future priorities and activities. Obviously, in such business plans, less emphasis is put on justifying the market potential to accommodate growth. Many firms produce such business plans every year.

Financing stage:

As has often been mentioned, one of the primary purposes of producing a business plan is to inform your lenders and investors. If you are not seeking new money but only intend to keep your present financiers informed, you need to put less emphasis on the background of the business (which is already known), but to emphasize more new developments in the business.

However, if you are approaching new lenders/investors (so-called second and third round and/or the stock market), your plan has to contain a more detailed description of the background of your business (including markets and products).

Specific project:

Perhaps you are drawing up a business plan not for the entire business of your entity, but only for an isolated one-time investment project such as:

Opening a subsidiary/profit centre in a specific country abroad;

Starting a new business unit for a set of new products or services.

For such business plans you need only to provide general information about the entire group. Your business plan should be concentrating on the new specific business you are planning. However, lenders or investors will be interested in having a wider picture of your company’s finances in order to assess the overall financial risks. If your company has financial difficulties, obviously this will reflect on the project as well.