MOST people believe that the business plan is simply a document that banks need before they consider granting you a loan.

Most business plans are in fact produced by a consultant and are copied from a standard business plan template, the consultant that you paid anything from K1,000 to K30,000 to produce it will not be able to stand by it, as in most cases, they have not any in depth knowledge of your business and simply cut and pasted what you told them on to the template.

Bank managers will not read it in any detail, they will certainly not question the viability or sustainability of it, as long as it looks ok they will accept it. Hereby being the root cause of Zambia’s extreme debt situation. Loans being easily obtained from banks and financial institutions on the basis of a very flimsy and totally useless business plans, a purely fictitious cash flow projection and loans being granted only on security which in most cases is highly inflated value, but this is a subject of another article in the future.

Even worse, I can guarantee that once a business plan has been produced and given to the bank, the business plan is filled away, sometimes in the bin, sometimes in a file and forgotten about. How many of you out there can truthfully tell me that you consult the plan and adapt it as your business grows.

Only you, the business owner, know your business ideas and potential, only you know the risks and pit falls that your business will and may encounter along its path. Only you understand your ideals and dreams. Yet you let some unqualified so called consultant draw up such an important document.

Excuse me for bringing in religion into this, but to all you church goers, you all follow a business plan, you consult it every day of your life, the Bible is in fact a business plan of life, it details what you should and should not do, it guides you through your life.

The business plan is in fact your Bible, it is a very important document that you, and you alone as the business principal should have produced or at least been part of the production.

So let’s get down to what a business plan should contain. It is firstly a plan, a plan of were you are, were you are going too and how you are going to get there. It also confirms that you have the right staff to achieve the journey, that you identify and protect your key employees.

It tells the reader of your dream, it lists the milestones that you need to achieve to reach that dream, and it shows you the capital that you will need to achieve this.

It should show that you have investigated the risks, the market potential and the opportunities for expansion.

A business plan is essential for any new or expanding business. It will help you to turn your idea into a reality and gives you an important insight into the hurdles you will face in your journey.

A business plan gives an outline of your business, the market in which it will operate, and how it aims to make money.

Writing your own business plan is vitally important, as it will help you assess whether your business has the potential to succeed. Your business plan should allow you to answer the question: why will your business succeed when so many others fail?

The business plan is your document and can be written however you want to but it should have the following sections

a. An executive statement – Why this business, were are you going with the business, why do you think you will succeed.

b. General Business description

c. Your product or service. What is your USP, why have you priced it as you have, Is it different to others and why. Where does it fit into the market place. Show that you know your product, better still, that you are an expert in the product.

d. Marketing Plan. – How are you going to promote the product to the customer, How are you going to create the desire for the public to want to buy or use your product. What is the marketing programme, both in time and cost. Are you going for a brand,

e. Operational Plan – What are your goals and identify the milestones that will let you check your progress towards the goal. What are your staffing requirements. Do you have key personnel that need keeping at all times and who are they, How are you going to keep them and what effect will it be if you lost them. Do you have the right premises and facilities to operate, not only now but in the future. If not, do you have an expansion plan. If you have an expansion programme, share it,

f. Financial viability – Prove that the business is viable. Investigate risk areas or periods and state the plan b you have to overcome these. Note the profitability of the business or different products, Investigate your overheads, make sure they are at a controllable minimum.

g. Start up or expansion capital requirements – What capital do you need and when do you need it, also why do you need it. But please you need as little as is possible.

h. Financial plans – 12 month, Three or maybe five year cash flow projections showing the need for capital, the cash flow problem areas and the overall profitability. Also showing the strain areas and low months. It needs to be complete including all costs, it should prove the viability of the business and if needed, the affordability for any loan.

i. SWOT analysis – Investigate the strengths, weaknesses, threats and opportunities of your business and state in the plan the ways you will use or avoid these as required.

In previous articles, I talked about the very important question “What If” The business plan is the document were you ask this question of yourself and your business.

What if my competition cut their prices?

What if my key personnel left me or died?

What if I changed direction and produced a new product?

What if the market changed, could I adapt?

There are hundreds of similar questions you need to ask, but only when you have answered them, can you truly prepare a good business plan.

Remember a business plan is not for the bank, it is a document that should prove to you, the business owner or CEO that the business is a good one, is viable and worth pursuing. It should give you ideas, as you write it, questions will pop up and more ideas will come into your head.

Look for problems, problems that may crop up in the future, plan to avoid them or convert them into opportunities. When writing the business plan, do it honestly, not just to impress the bank manager. An honest plan will show you the risk areas, it will identify the possible problem areas and once alerted, you can plan to overcome them.

A business plan needs investigation, it is no good to simply say there is a market out there, you need to undertake a market research.

My lovely wife has even fallen foul of this, she has opened “Makeni Garden Centre” and is busy growing thousands of beautiful plants and shrubs for homes around Lusaka, but she was offered a site in Northmead from which to sell her plants. She simply dived in and set up without undertaking a market research, without looking at the surrounding houses, the ease of parking, the visibility. The site simply is not working and never will.

So please your business plan is vital but its your business plan, yes get someone to write but use your words, use your investigation, it is not a bank document, there is frankly no one at any of the banks with sufficient business knowledge to be able to read it any case, It is not a financial document although they use it as such. Your business plan is your Bible and should be treated in the same vain.

Start or expand your business, there is huge potential in Zambia, but please, if you want to succeed, have a proper plan.