July 15, 2024
Mind Mapping and Information Gathering For Successful Drafting Of a Business Plan

Information Gathering Prior To Drafting the Business Plan – The planning phase.

Business or hobby?

A question begging an honest answer is, “Is it a business you want to start or is it a hobby?” This is a vitally important question because these are two very different enterprises or entities. To start and run a business takes a lot of extensive, in depth analytical thinking, legal steps need to be taken, and a lot of planning and budgeting needs to be done. One can’t stress this enough.

Entrepreneurial skills

Entrepreneurial skills are naturally inbred in very few people. The Indians and Chinese seem to have it as a natural trait. Many people think that because they’re starting a trading business, that it should just succeed because they are buying at a low cost and selling at a higher price. So, therefore then, a profit should be shown and all should be in order. Not true in many cases, many hidden costs are not taken account of. Hidden costs exist such as telephone, petrol/transport, stall or rental, packaging, owner’s salary, and so forth.

Many times the business owner uses the money, which should be in reserve for purchasing more stock, for his personal use and then he wonders how all the money or profit has “disappeared”. Now he would need to raise more money somehow to purchase his next batch of stock and/or raw materials. Such a business owner is actually getting poorer each day and he is hardly aware of it.

If one approaches only one’s friends and family with a business idea, and none of them have the necessary knowledge to advise one, the rot will begin to set in. Wrong or ill-informed advice is not what you need.

Drafting a complete and accurate business plan is a very important step that anyone can take who wants to start any new business, or expand an existing business. The business plan covers all the important steps, decisions, reports and forecasts needed to assess the likelihood of success or failure in the new venture. At least one then has a foundation from which to work. It can always be used for reference purposes during the life of the business and it can easily be adjusted for future expansions or changes to the business process.

Planning the business, mind mapping and information gathering

If one approaches only one’s friends and family with a business idea, and none of them have the necessary knowledge to advise one, the rot will begin to set in. Wrong or ill-informed advice is not what you need.

The act of planning helps you to think things through thoroughly, study and research if you are not sure of the facts, and look at your ideas critically. It takes time now, but avoids costly, perhaps disastrous, mistakes later.

Bankers and financiers presume that one means business when one approaches them in this regard and they expect to receive honest and accurate information. There is no quick and easy way to deal with this; it’s their way or no way.

We all have skills, talents and learned abilities. These can be used to operate a business, which will generate an income. Extensive, in depth analytical thinking and planning is very important though because, without it one is destined to fail.

Discuss your business plan with people who can give you advice; Bankers, Dept. Trade and Industry, Business Partners Inc., other institutions who grant money for small business initiatives, an attorney, an accountant and various other people who have a wealth of experience in their fields of speciality.

When planning to start a business take the following steps:

  1. Speak to product specialists for their advice concerning your products and/or services.
  2. Speak to bankers, a lawyer, an accountant and a number of institutions offering grants or loans to small business initiatives.
  3. The above people will give you a blank Business Plan form, among other forms, to complete.
  4. The business plan is normally of great assistance in planning and budgeting for the business. And it is a good guide to all that needs to be done and decided upon.

Meet with whoever your partners will be, if any, and discuss the whole planned business process, including:

  • The type of business ownership best suited to your business
  • The products or services to be offered
  • The premises needed
  • The machinery and vehicles needed
  • Start up expenses need to be established and discussed
  • Capital requirements and directorship of the business
  • Decide on who will perform which functions in the running of the business.
  • Your target market
  • The environment of your area to be covered
  • The economy relating to that area, current demand, future growth, etc.
  • Determine what barriers exist at present which may hinder your success
  • Promotion of your products and/or services
  • Distribution channels
  • Operational plan i.r.o purchasing, production, sales, etc. needs discussing
  • Legal environment and requirements
  • Inventory and suppliers
  • Insurance and other professional advisory requirements like, lawyer, accountant.
  • Establish a system of record keeping
  • Bank services needed
  • Personnel requirements and Human Resource policies
  • Do the costing of each product very accurately.
  • Calculate selling prices based on all costs plus mark up
  • Draft the projected financial plan or budget for twelve months
  • Draft the projected cash flow for twelve months
  • Draft a starting balance sheet

This key information will then be used to draft a meaningful business plan. And the information is all inter related an in sync. In closing, the pre-planning phase takes time and effort but it is very necessary as a step to ensuring success.