business plan
A business plan sets out what you will sell, to whom, and how the money works, and its real value is in forcing you to find the flaws.
In plain English
Most business plans are written for somebody else. A bank, an investor, a competition. Which is exactly why most of them are useless.
The genuine value of a business plan is not the document. It is what the writing of it forces you to confront.
Who exactly is the customer, and have you actually spoken to one? What will you charge, and did anybody agree to pay it? What does each sale cost you to make and deliver, honestly, including your own time? How many sales before you cover your rent? What happens if it takes twice as long as you hope, which it will?
Answer those properly and you will often find the business does not work, which is the most valuable outcome available to you. Finding out on paper costs an afternoon. Finding out with ₦5 million of your savings costs a year of your life.
Keep it short. Nobody needs forty pages. A few honest pages that a stranger could read and understand, with numbers that survive being questioned, beats a beautiful document nobody believes.
Write it for yourself. If it happens to convince a bank as well, that is a bonus rather than the point.
You plan to sell a product at ₦5,000. Writing the plan, you calculate that materials, packaging, transport and your own time cost ₦4,600. You would earn ₦400 a unit and need enormous volume to survive. You learned that in an afternoon, not after two years.
Questions people ask
How long should a business plan be?
Short enough that somebody will actually read it. A few clear pages with honest numbers beats forty pages of ambition.
Do I need one to get a loan?
Usually yes, and lenders will test the numbers. But write it first for yourself, because a plan that convinces a bank and not you is a dangerous document.
What is the most important part?
The numbers. Specifically, what each sale actually costs you and how many you must make to cover your fixed costs. Everything else is commentary.
Last reviewed