How to make a business plan in 7 Steps in Nigeria
Any business creation must be the subject, upstream, of a business plan. This document makes it possible to assess the relevance of a business project but also to show its potential and its viability in the long term. It also lays the foundations for the business development strategy.
The obligatory passage before embarking on entrepreneurship, the business plan takes time and must respond to a very specific method. It includes a written part but also an important part with quantified projections.
What is the role of a business plan?
The business plan plays several roles. First, it is particularly useful for the project leader: it allows him to mature his idea and push his thinking further. The business plan covers all aspects of the project: the strategic, financial, and commercial objectives over the next three years. It thus represents a real line of conduct, even if it can be difficult to project oneself during creation. This development plan can be adjusted over time, to adjust the objectives according to what has been accomplished.
In addition to being an essential document for the entrepreneur and his team, the business plan is also essential to convince potential partners and to obtain financing. In this case, the challenge is not the same since the business plan in question will have to be thought out and carried outt is possible to adapt it according to the interlocutors. For example, if it is aimed at investors, they should immediately see the possible return on investment. If it is to be sent to the bank, the business plan must show the financial viability of the project.
1 – Write an operational summary
The executive summary or operational summary must give an overview of the company and the market. It’s a very short part that serves as an introduction, but it’s best to write it at the end when all the rest of the business plan has already been completed. This will make it easier to extract the main ideas.
Composed of several short paragraphs, this summary must include an overview, a description of the company and the founders, a presentation of the products and/or services, a brief market analysis, and the main financial data. The objective is to centralize on a single page the key elements of the project, before going into detail in the following pages.
Example of the first paragraph of an executive summary for a concept store;
Based in Ikeja, Daniel & Patricia is a concept store of children’s clothing and decorative items. The 2 founders of the store have more than 10 years of experience in BtoB sales and childcare. In the city, there is no similar shop, which will allow Daniel & Patricia to meet real demand and build up a young and dynamic clientele, on the lookout for trends on social networks.
2 – Describe the company and the team
The objective of this part is to describe in detail the activity of the company and its mission. It is also necessary to provide a complete presentation of the founders and their expertise. For each member of the team, the description should highlight the training, background, and experience. It is also important to specify which role each person will take on. The idea, at this stage, is to show potential partners and/or investors that the project leaders have complementary skills to carry out the creation and development of the company.
Example of a business description for a digital agency;
VicBro is a digital agency in the process of being created. It will offer 360° digital support solutions to professionals. In this very competitive market, our agency will make a difference thanks to the expertise of the founders, which will make it possible to internalize a large part of the processes. We will indeed be able to manage internally the graphic, editorial and technical part during the creation of a site as well as the community management.
Our agency wants to focus mainly on a business-to-business service target and develop long-term centers of expertise by sector of activity, to bring real added value. To develop our portfolio, we can count on the personal and professional networks of the 4 founders, who have been working in digital for ten years.
We plan to establish our agency in Lyon and to develop our activity locally at first, then, on a national scale. The agency will be a real place of life and meetings, whether for clients, partners, or simply entrepreneurs who evolve in the digital world.
3 – Do a market and competition analysis
Market research is an essential part of the business plan. It makes it possible to check supply and demand on the market in question and thus to define to what extent the project can find its place. If there is already strong competition, it is rather a good sign: it is a demanding market, but it will then be necessary to find a way to stand out from the competitors. Conversely, if there is little supply on the market, you also have to ask yourself the right questions. Maybe the project is too cutting-edge or there just isn’t enough demand right now. It will then be necessary to carry out a more in-depth study with the target.
In summary, at this stage, it will be necessary to analyze the market (i.e. supply and demand, about the target audience) and the competition (i.e. the companies offering the same service and/or product or which meet the same need).
Example of market analysis for a start-up specializing in commercial real estate;
A PropTech start-up, Neoffice conducted a market study to have an overall inventory of business real estate in Nigeria. The sector is experiencing an increase in office demand of 32% over the period January-September 2021, compared to 2020.
The start-up studied its target market, namely VSEs and SMEs, and identified their main expectations in terms of office rental. According to a study conducted in September 2021, companies and employees are looking for properties that are perfectly soundproofed and close to transport. The provision of common areas is also an important element when renting an office. Finally, companies also want more flexibility and agility and are gradually turning away from the traditional commercial lease.
Thus, Neoffice wishes to bring a breath of fresh air by only offering to rent offices with all-inclusive contracts for the provision of services. The start-up will build a catalog with properties that meet the expectations of companies and will only offer contracts with a commitment period of fewer than 36 months. The objective is to respond to a real demand on the market and to adapt to the new requirements of today’s societies.
4 – Determine the commercial strategy
The commercial strategy can be defined thanks to the 4P method, also called “marketing mix”. It thus consists in taking an interest in the product (Product), the price (Price), the distribution (Place), and the communication (Promotion).
To begin with, the entrepreneur will have to prepare his offer of products and/or services and detail all the characteristics associated with it. He will then have to define how his products and/or services will be distributed on the market. Will they be sold via physical stores? On an online site? Through intermediaries? In this part, it will also be necessary to explain how the proposed ranges come to meet a need and what they bring compared to the solutions of the competition.
Example of a business strategy for a computer hardware distributor;
Nairatalktoday is an expert consulting firm in digitalization. It offers a full range of services to support companies in their digital transformation, from A to Z.
The company offers its solutions in 4 main areas:
- Strategic support for digitalization: this service consists of defining an action plan hand in hand with the client and determining an overall budget
- Digital training: this is a comprehensive service to train the various internal departments in new digital uses (HR department, for example, accounting department, etc.)
- A recruitment offer: this is an offer that makes it possible to hunt and recruit the best IT talents on the market to join the company.
- Work on the employer brand: this consists of creating a career site but also accounts on professional social networks, to develop the notoriety of the company.
The added value compared to the competition
Nairatalktoday wishes to make a difference thanks to the proximity and the consulting dimension. It wants to position itself as a true partner for its clients, available to monitor projects from start to finish. The company only markets services and not products. These are consulting services, which are entirely managed internally since Nairatalktoday has the necessary resources. This allows great responsiveness in the management and monitoring of projects, which is highly appreciated by customers.
Nairatalktoday distributes its solutions mainly by recommendation and by prescription. Current customers very often recommend Nairatalktoday’s services and thus allow the portfolio to grow. At the same time, a network of prescribers has been developed throughout the territory, with IT equipment suppliers and digital agencies.
5 – Define the marketing strategy
To establish a relevant marketing strategy, you must first define the buyer personas: this is the target of the products and/or services. Then, the communication plan must follow several steps. First of all, it is necessary to work on the image and the identity of the company. It is therefore a question, for example, of creating a logo, choosing a graphic charter, developing an editorial line but also thinking about the sales pitch.
Then, it will be necessary to choose the different channels to make the company known to the general public. They are numerous and must be selected with care, demonstrating relevance to the target audience. The communication strategy should be the subject of a complete action plan.
Example of a marketing plan for SaaS planning management software;
VickRaj is a software dedicated to companies that have many employees with complex schedules (catering industry, medical sector, logistics, transport, etc.). This is a tool that makes it easier to create and manage schedules, saving time and increasing efficiency. To reach its BtoB target, VickRaj plans various actions.
- SEO on the website
VickRaj wants to work in-depth on the content of its website and deploy a complete SEO strategy over the long term, in particular through the development of a blog, to attract qualified leads to its site.
The company plans to be very active on Linkedin and to share a lot of useful content with its targets, to attract them to its site (infographics, advice, practical guides, white papers, etc.).
- Specialized magazines (paper/web)
VickRaj provides a budget for editorial adverts in business-to-business service newspapers, in paper and digital format. An envelope will also be dedicated to the distribution of press releases and in the long term, recruitment is envisaged to manage all the PR parts.
6 – Establish financial forecasts
After all the descriptive parts, it’s time to move on to financial projections. First, what is the business model of the company? It is necessary to determine how the income will be generated. We also talk about the business model. Sometimes it just flows. When a company sells products, the business model is simple: it is the margin generated on sales. But for a mobile application, for example, the business model can be more difficult to determine. In this case, it could be income from advertising or affiliation or even a paid subscription system.
Then, the financial plan must precisely indicate all the details of the start-up costs but also the expected turnover, over three years. It will thus be necessary to review all the launch costs (establishment of the company, purchase of equipment, administrative costs, real estate costs, etc.) but also all the fixed costs ( payroll costs, communication costs, purchase of stock, taxes, executive compensation, rent, software subscriptions, etc).
This part must also show how the founders plan to raise the money they need to launch the project. For example, if the start-up costs amount to N100,000,000, the business plan will specify, for example, that the founders bring N20,000,000, that a loan of honor finances N35,000, and that a loan from the bank in the amount of N45,000,000 is required.
7 – Add appendices
Depending on the stage of the project, several documents may be appended to the business plan. The objective is to provide potential partners and investors with as many elements as possible to reassure and/or convince them. This can be, for example, the CV of the founder, the statutes of the company, the first orders from suppliers,s or even the rental lease of commercial premises. Any information likely to show the relevance of the project may be added in the appendices.
We have reviewed the various important points to know to draw up a business plan. To go further, here is a complete business plan template that will help you make your project a reality