Windhoek
To map future growth and success it is essential that all businesses, including small and medium enterprises (SMEs), should have a proper business plan.
A business plan is a document that states the business background, goals and objectives. It also includes plans for reaching these goals and objectives and plans to overcome challenges in this journey. In simple terms, a business plan is a roadmap that indicates a business’s goals and how it plans on achieving these goals.
A business plan can differ depending on what sector the business is in and who is drafting it. But in general they should include the description of the business, its products and services; target market; details on the management of the business and staff; details on competitors and marketing strategy.
“These points are very important and really very basic requirements with regard to the content of a business plan. A business plan does not have to be unnecessarily long, especially one for a SME. The most important thing is that the entrepreneur must understand his/her own business plan and be able to defend what it states about his/her business,” says Mbo Luvindao, Manager at Bank Windhoek’s Emerging Small and Medium Enterprise (ESME) Branch.
“One can consider a business plan as a roadmap or guide for any business. Before starting with your business plan the questions you should answer is where is your business going and how do you know when you get there? What are your expectations of your employees? Business plans also assist with investor confidence. It provides an investor with reasons why they should invest in your business.”
Luvindao says that when setting up a business, budding entrepreneurs should distinguish between a feasibility study and a business plan.
A feasibility study is an assessment of the viability of a business idea. Feasibility studies are done before anything is invested in a business. When you do a feasibility study you are trying to find out whether the business idea is worth your time and effort.
A business plan is developed after the feasibility study. The business plan is done after you have established that your business idea is viable and worth your time and effort. The business plan is about strategizing on the implementation, sustainability and goals of the business.
“In a nutshell, a feasibility study shows how profitable a business idea can be while a business plan lays down the roadmap on how to achieve and maximise on the profitability in a sustainable manner,” Luvindao said.