Developing a Strategic Business Plan
The establishment and success of a business is highly dependent on a well structured and concise strategic business plan. This is because preparing a business plan converts pipe dreams into realities. It is important for the business owners to understand that a business plan does not create the strategic direction of the business but it records it in paper for all to see. Abrams & Kleiner (2003) argue that when evaluating a business plan readers spend the first five minutes reviewing the executive summary, the financials, and the management section.
A strategic business plan should include; executive summary, company overview, products and services section, marketing plan, management plan, operating and financial plan. The executive summary section must convey a clear picture of the proposed venture. It should give a summary of the whole plan indicating the vision, mission, goals and objectives of the business. The company overview section should have a clear description of the firm and for existing businesses it should give its history. It informs the reader where the company is located, legal issues and the type of business being proposed.
The products and services section outlines what the company intends to offer to its prospective customers. Investors will have a lot of interest in products which have been developed, tested and found to be functional in the market. The marketing plan identifies the type of market that exists, the market analysis, documents the customer demands and interests. This section should examine the competition in detail and describe the elements of the proposed marketing strategy. The management plan section should describe the personnel, their qualifications and positions. Operating plan offers information on how the product will be produced It should also explain the firms approach to acquiring the raw materials, assuring quality and controlling inventory.
Financial plan section provides an account of the new firms financial needs and sources of financing and a projection of its revenues, costs and profits. The financial plan should indicate the expected return on investment over a given period of time. DeThomas & Derammelaere (2008) commented that a convincing financial plan should indicate the amount of financing required for making the plans feasible, when and in what form the financing will be needed and then what short or long term financial projections does the firm estimate.
In conclusion, we generally agree as suggested by DeThomas & Derammelaere (2008) that preparing a strategic business plan requires effort and time, but the tasks should not certainly be beyond the reach of the typical entrepreneur. The business plan acts as a calling card and it gives the owner the best opportunity to introduce the business and him or herself to others in the most favorable light. A well packaged business plan helps promote a favorable first impression because financiers or investors will ultimately make a decision based on the merits of the plan.