Have you been nursing the idea of starting your own business for a while now but you do not know how to go about implementing it?
Do not worry much about it, because we are here to help. This help will come in the form of teaching you how to create a business plan in Nigeria which without , starting the business will be very much complicated.
The objective of any business plan is to guide you and help you assess the viability of your project.
In it, you get to analyze and prioritise your project in operation, which will help you avoid errors that involve spending / losing money and time.
But do not for a minute think that creating this business plan in Nigeria will be a very big deal because in this article, we have taken out time to comprehensively explain how to write a business plan in Nigeria for your business step by step.
And should you have any doubts, fears or questions, we are always waiting for you in the comment section, or you can simply contact us here
Definition of a business plan:
A business plan is a document that details and analyzes the viability of a business opportunity, both technically, economically and financially.
In it you will analyze the starting situation, set goals, draw strategies and estimate future profits.
Differences between a business plan and other plans
There are so many types of plans to be made for a business that sometimes you can get confused and not know which one you really need.
These are some of the most common plans:
- Business Plan
- Strategic plan
- Financial plan
- Viability plan
- Digital Marketing Plan
➡ Business Plan
It is the plan you make to launch a new project or business idea from scratch and test its viability.
➡ Strategic Plan
The strategic plan is carried out by a company in operation and with a projection of important growth.
To do this, you need to make a strategic plan that helps you analyze your current situation, set objectives and strategies to have control of your future in your hands.
➡ Financial Plan
The financial plan is a roadmap to analyze the viability of a company and its operation.
It is essential for any company because it will allow us to analyze all the economic information about a business project.
Thanks to it, we will have clear understanding of how much money we need, how we are going to get financing , how much we are going to sell and what costs we will have.
➡ Feasibility Plan
It is the plan carried out by a mature company , which is stagnating or losing market share .
For this, you need a feasibility plan that will help you to redirect and improve your current situation.
➡ Digital Marketing Plan
The digital marketing plan is the document and the roadmap where all the marketing strategies and actions that the company will carry out are detailed.
What is a business plan for?
Why do you have to make a business plan?
Basically for these reasons:
1. So as not to waste resources, such as money and time.
2. When developing the economic viability of the project, it will help you apply for outside financing or find new partners .
3. Mark your way forward. Entrepreneurship is a long and difficult journey, therefore, having a guide will be a great ally of yours.
With the business plan in Nigeria, you will make estimates of your needs and possible situations that may arise when starting your project.
It is true that it is not a document that can predict the future, but it does raise possible problems, errors or objections to the start-up of your business , being able to take action before committing them.
Before going into the nitty-gritty of making a business plan in Nigeria, we must point out that the Business Plan is not a static document which, once drafted, will be set aside and never looked at again.
Each company tends to go through three phases in its life: the start also called start-up, the development stage and the maturity stage. In general, the transition to each new phase of a company’s life corresponds to an increase in revenues and in the number of employees (perhaps of product lines, company assets, investment sectors, etc.) and greater delegation of management tasks.
These steps will necessarily require an update of the Business Plan, making it a dynamic document and an essential reference point for business management.
The Executive Summary Of The Business Plan In Nigeria
If you want to learn how to make an effective business plan in Nigeria, you will absolutely have to become an Executive Summary black belt. The Executive Summary is in fact the most important part of a business plan , the section that introduces the document itself, allowing the reader to get an idea of the project.
Its fundamental value lies in being the first element examined by a potential investor. It could be compared to the interpretation or introduction of a novel that must be written to know how to catch the attention of the reader who, if not satisfied, could decide not to complete the reading.
It is therefore important to be clear, direct and compelling, driving directly to the point.
The Executive Summary will contain the most relevant elements of the plan and will have to show its uniqueness and validity in a few pages.
The executive summary must therefore:
Clarify the foundations of the plan.
Clearly indicate products or services to be developed and the markets to which the company refers. It is important to be clear and never ambiguous in these descriptions that define who you are, what you do and in which sector you will work. Moreover, in preparing the Business Plan in Nigeria, never forget to skillfully measure the ambition of the goals set!
Explain the variations in trends of growth.
Especially if the company in question comes from very static markets or periods, an accurate analysis of these trends must be provided. It will be fundamental to describe the changes in the market or the company and the reasons for these changes with clarity and precision.
Avoid slogans. A Business Plan is not an advertising campaign.
If you believe that the product presented will be the best on the market, you will have to explain the reason in detail with objective and factual analysis.
Quantity is not synonymous with quality.
A well-written plan must be concise and relevant and have a length between 30 and 50 pages (the folders are an editorial unit of measurement, 1 folder = 30 strands of text for a total of between 1800 and 2000 characters including spaces).
As for the executive summary, on the other hand, this must fall between 1 and 3 maximum folders depending on the complexity of the company that is being described.
The first impression is what counts.
People are often influenced by the first impression, so be careful: do not make unsupported statements, use a professional and punctual writing style, check that the numbers presented square and leave no doubt, organize the text clearly in a consequential and linear way, pay attention to spelling, grammar or punctuation errors.
The “flashy” plans are counterproductive.
Business plans that are too “flashy” are often perceived as “all form and no substance”, something futile, a waste of financial resources.
Ultimately, remember that it is advisable to cite external, reliable and independent sources to support what is stated in the plan. Above all the declarations concerning the target market and the competition must be supported, as far as possible, by information from independent third parties giving greater credibility to the forecasts.
In any case, avoid the use of an ambiguous language. The vague terms such as “may be”, “probably”, “perhaps” in business, have no place and can also have a negative effect on a potential investor or reading partner.
Always use a positive and decisive tone when writing a business plan in Nigeria.
The description of the company
This is the section dedicated to the most thorough description of the company, a section with which the real heart of the business plan opens; this has the purpose of accurately illustrating the nature of the company and describing its fundamental characteristics starting from the mission (which is never simply making money) and passing from the exposure of short, medium and long term goals, strengths, weakness and success factors; up to, if necessary and present, general information such as: the type of company and date of incorporation, past and / or anticipated changes in the legal form of the company, investors and directors and the organization chart.
In this section it must be stated the kind of business it is, for example, if the company is an industrial, retail or service company, which is its reference market, where it is placed within the market, what is the offer that it puts in place, if it is local or multinational, what level of development has been reached so far.
It is in this part of the business plan that the objectives to be achieved are explained, which of course must be realistic, achievable and at the same time able to attract the attention of potential financiers.
For simplicity we list below the points that this chapter of the business plan in Nigeria must meet:
In which sector does the company operate?
A general introductory description followed by details. For exposure, a certain originality is always recommended to help fully convey the competitive scenario in which the company operates.
What are the goals of the company?
The objectives must be listed as explicitly as possible including financial objectives and all available details such as: revenues, gross and net profits, return on investment (ROI). The definition and illustration of the so-called KPI (key performance indicators) typical of the sector or of the company is also fundamental to this theme .
What are the critical success factors of the company?
The critical factors are not the business objectives, but the factors that allow their achievement. In this section the characteristics of the management, the company organization and its products that have contributed, or are expected to contribute, to the success of the business will have to be indicated.
What are the successes already achieved and the strengths of the company?
Explain if you intend to capitalize and invest in what in the past has been a success factor of the company or if you want to start new alternative or complementary initiatives based on new skills or on a different use of those already matured.
What are the difficulties and weaknesses?
This is a very delicate and non-secondary part of the document. Difficulties and weaknesses must be drawn up that threaten the success of the company. Critical issues that must be monitored to be contained or eliminated. Obviously not every weakness can be eliminated! It is up to the entrepreneur to decide the priorities, which points are to be addressed and which points instead constitute a necessary strategic compromise. The form usually adopted for this review is that based on a cost / benefit calculation.
Recommended Reading: How To Make Money With Your Talents In Nigeria
The description and illustration of the products or services
This section of the business plan in Nigeria is dedicated to the description of the products / services offered by the company, their in-depth illustration and plans for the future.
When making the business plan in Nigeria, it is mandatory to specify whether the products / services are already existing and marketed, ready for placing on the market (indicating the launch date) or, if the products are being processed (indicate the time to market).
In this chapter we must also list the distinctive features of the product (eg brand) or the possible sources of competitive advantage that must clearly be described in detail.
In summary , the description of the individuals will highlight:
Physical characteristics of the product , it is useful to include information leaflets, detailed descriptions, drawings and / or photographs as attachments;
Purpose. Explain in detail the employment possibilities;
Attractions. Describe what distinguishes the company’s product from that of others;
Evolution. Useful to describe the evolutionary steps of product development and above all the possible future developments.
Exposure of the details in this section is however of vital importance, so during the drafting it is important to take into consideration different items depending on whether the product / service is current or future.
Regarding current products or services:
Is the product / service of the company covered by legal forms of defense of intellectual property (eg patent, registered trademarks, etc.)?
How does it differ from that of the competition?
What advantages does it offer the customer?
What are the competitive advantages, the strengths and weaknesses and the characteristics of the product / service compared to those of the competition?
Are there any supposed limitations or possible loss of market shares?
What are the details of the production and the sales mix of each product / service of the company?
What are the price lists and what are the pricing policies and consequently what are the costs and the profit margin?
How is the current customer portfolio composed (both direct and end users)?
What are the components (only the main components). More than anything else it is necessary to understand the nature of the product and its dependence, if applicable, on third parties or resources and any current and / or future problems relating to the supply of the aforementioned components.
Explain the value chain of your offer (necessary more than anything else when we talk about a particularly structured reality or production / administration models).
What are the sales and margins trends of current products?
Speaking of future products or services:
Are any innovations planned?
If yes, what are the expected development times?
What are the price lists and what are the pricing policies and consequently what are the costs and the profit margin?
How is the sales mix and global profitability expected to change?
Will the planned innovations substantially change the strategic positioning and the value chain?
The market analysis in the business plan in Nigeria consists in the acquisition and in-depth processing of the data useful for designing the environment in which the company will place itself with its offer. Market analysis puts key factors such as the key decision-making factors that convey the purchase choices of potential customers and many other details that change depending on the time and budget available for further analysis under the magnifying lens.
Often one of the complications that arise for a company in making a business plan in Nigeria and specifically for performing a market analysis is the difficulty of accessing deep data of a specific market or even the non-existence of precise and univocal data .
A starting point can be:
The marketing strategy
The marketing strategy is nothing but the set of guidelines along which the company, in the medium-long term, wants and must proceed to achieve the goals set.
So, how do you make a business plan in Nigeria without going into the guidelines that will dictate the course of your work?
To define the strategies that will guide companies decisions, it will obviously be necessary to take into consideration the sector and market analysis and then define the so-called Marketing Mix levers which include:
- Product : not only the product / service in a physical and concrete sense, but its qualities, the line of belonging, the after-sales service, the guarantee, etc;
- Price : the sales price of the product / service must take into consideration the business costs, the prices charged by the competition, the price policies, the discounts, the methods and the payment times;
- Point of sale (distribution): how your product is distributed. If there are direct sales outlets, if there are intermediaries (for example a wholesaler), if the distribution also takes place online and how;
- Promotion : all advertising, communication and public relations activities designed to make your product / service known to the market.
Thanks to the information entered in this section you can then define the practical marketing activities that you will put in place, which will be collected in:
The management structure
Whatever the company, regardless of sector or size, it is the people who make the difference . The best business idea can go totally bankrupt if administered by managers who are not up to par.
Equally the presence of a solid and prepared management is absolutely fundamental even in the eyes of potential investors who often evaluate the proposals they receive not on the idea or the product, but on the qualities and abilities of the team that must develop them.
The requirements that the team must have to ensure that the series of interrelations that distinguish it are efficient for achieving the objectives are:
the common purpose and a harmonious vision towards the set goal;
the number, type and characteristics of the individual members must be functional to the objective, in terms of adequacy;
they must have precisely defined tasks and competencies, be hierarchically framed and have a clear rule for maintaining the set of relationships established ..
This is why this section of the business plan in Nigeria needs some attention in its compilation.
The three phases that lead to the composition of the chapter dedicated to the management structure are:
Indication of characteristics and skills;
Presentation of people.
The definition of organization and structure are useful for identifying the functions performed by the various collaborators with their respective responsibilities. With respect to this, the part concerning the personal part, or the management with the relative CVs, will be detailed, identifying the right person for each individual role.
The first phase of the work concerns the identification of the company functions based on the activity we want to carry out; for example:
Production: deals with the identification of the most suitable technology and for example to control the machines and the structure guaranteeing the manufacturing process;
Procurement: guarantees the safety of purchases of raw materials and all that is necessary for production, defining stocks and purchase times;
Marketing: defines and illustrates the strategies of the company and relates products / services to the market by identifying opportunities, studying and applying the moves needed to seize them;
Sale: not limited to the mere commercial and distribution issue but including the part of customer assistance in the post-sales phase;
Research and development: the assurance of continuous competitive advantage through the periodic identification of new processes and new products;
The second phase consists in identifying the characteristics and the competences of each function , explaining why, thus clarifying the selection criteria. If necessary, specify a probable expansion of the workforce in the future and the reasons.
It could be useful in the case in which the structure of the company was particularly structured, presenting an organizational chart that explains its organization.
At this point the time has come for the third phase, that is to present the people . A brief presentation of the curricula of the key management and property components will be useful: educational qualifications, specializations, experience (including previous assignments).
It is important to indicate synthetically the successes achieved, if significant, for the company in question. In some cases it may be necessary to dwell on more detailed presentations, in this case it is better to include them in the appendix to the business plan.
Obviously the best choice is to emphasize experiences and skills useful for reducing the risk typically associated with business activity, especially if we talk about start-ups or rapidly developing companies, perhaps sacrificing parts of the less inherent, though no less prestigious, curriculum. .
The implementation plan or operational plan
The implementation plan or operating plan expresses in detail the systems and methods of realization of its own products or supply of its services. In practice it is the point in which we try to define the transition from theory to practice, demonstrating that we have the skills to bring the idea and vision to their actual realization.
The operational plan takes into consideration the daily processes or rather all the processes that can be defined in the short term and the general objectives or the “milestones” to which we aim in the medium and long term that will be used as benchmarks for the verification of success of the business idea.
Essential in this part of the business plan in Nigeria, is to provide a description of problems and solutions relating to:
Practical and procedural organization of work
Practical and procedural organization of the capital invested in the production processes
Practical and procedural organization of supplies of raw materials
Production and supply techniques used
Policies adopted with the sales force
Policies adopted with suppliers
As with the entire business plan, even in this section we will try to be clear, logical and accurate in the description, without however falling too much into technicality.
The business plan, we must never forget, is a document with a strategic-managerial and not a technical function.
The contents listed above can be ordered and displayed according to 4 key points:
A significant summary of research and development policies;
- Production Section
dedicated to resources and processes that lead to the final result: product or service;
Increasingly central to every activity, the organization dedicated to customer support and loyalty is now the real fulcrum of the competitiveness of many sectors;
- External influence factors
Extremely variable content from sector to sector, as well as from many other factors. However, it is fundamental for a significant estimate of how external factors could change production or supply activities.
Financial analysis: necessary capital and financial information
One of the most difficult part when studying how to write a business plan in Nigeria, is without a doubt the chapter dedicated to financial analysis.
This part of the business plan essentially seeks to answer a series of key questions:
How much will it cost to start the business described in the business plan?
Do we self-finance or do we seek funding?
How soon will we return and pay back the financiers?
What are the amortization plans for the machines and how much are they?
How will all company supplies be paid and in what way?
Our typical customer how and when will he pay?
The compilation of this part of the business plan in Nigeria undoubtedly requires specific skills and is the part that is most often entrusted to consultants. This chapter of the business plan is indeed key to convincing a potential lender to invest.
Obviously financial analysis will not only serve to find lenders, but will also have the task of making us understand whether or not we have financial coverage for our company!
I undertook not long ago , I can tell you that the road is long and exhausting, but it is well worth it . Being the owner of your time and work is priceless, it is the best price you can get for anything.
I hope you found this article on writing a successful business plan in Nigeria useful, you may also want to check out How to generate capital to start a business in Nigeria
Thank you very much for taking your time to read!