A business plan for an entrepreneur

Some have asked me why banks often reject loan applications. There are many reasons that banks can use to reject an application. These range from lack of adequate collateral, poor cash flow, or an unconvincing business plan. I feel it is very important to explain more about a convincing business plan. Business travel is truly rewarding and also a journey of discovery. We live in a world governed by laws. If you do not respect the law related to a certain aspect, it means failure in this line. Businesses must not be spared either. There are laws of success that govern business.

In order for the business enterprise to grow and be sustainable there is a need for proper planning. There is a popular saying “Failing to plan is planning to fail” (Benjamin Franklin), this adage may sound like music to your ears but business planning is a key area that zeroes in on the importance of planning for any project. Unfortunately, this planning step is often neglected and the result is always devastating.

There is a lot of money in Zimbabwe that could be exploited by businesses if they plan properly. Some good business ideas die, just because they lack a good business plan that can attract funding.

What is a business plan?

A business plan is a well-articulated road map that shows in detail how a company intends to achieve its goals and objectives. He seeks to lay out a written road map for the company from a marketing, financial and operational standpoint. Both start-ups and established companies use business plans. A business plan is a document that outlines strategic action items. Planning involves setting business goals for a given period and formulating various actions to achieve those goals by choosing the best possible options (or alternatives) from the various activities available. It is concerned with both ends and these are: what must be done and how it must be done. It bridges the gap between where we are and where we want to be. It is a rational approach, where, all the members of the organization need to work to achieve the organizational goals. In fact, everyone in the business should plan, try to keep a to-do list to achieve these goals every day.

It is a summary structure of the business. To run a smooth business there is no alternative other than making a business plan. Depending on the sector, a business plan can sometimes be referred to as a business proposal, investment prospectus, corporate plan, loan proposal etc.

Use of a business plan

It is used by financiers and investors. Banks, for example, want to see how the company can achieve its goals. The plan is used to attract investment before a company has established a proven track record. Thus, it helps to get loans from financial institutions. For large organizations, a business plan can serve to keep a company’s executive team on the same page on strategic action items and on targets for achieving established goals. They are so useful especially for start-ups because they show the way. Ideally, the plan is reviewed and updated periodically to reflect goals that have been achieved or changed. Sometimes, a new business plan is created for an established business that has decided to move in a new direction. It gives direction to the business. A business plan reduces the risk of uncertainty. It reduces overlapping and wasteful activities. Planning encourages innovative ideas. Decision making becomes easier. Planning establishes standards for control.

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1. A business plan is a very important and strategic tool for entrepreneurs.

It helps entrepreneurs focus on the specific steps needed to make their business idea successful, and helps them achieve short-term and long-term goals. Although it is essential to have one, some entrepreneurs are reluctant to put it in writing. They believe that every day must be different from the other and also others think that they are guided by the course of the economy, especially in a hyper inflationary environment like the economy of Zimbabwe. However, excellent business ideas can be useless if you cannot formulate, execute and implement a strategic plan to make your business idea work. If you are looking to raise money from institutional investors and lenders, remember that having a good business plan is very important. The goal is to have a well-documented plan that speaks for itself. It needs to be clear and easy to read and understand.

2. Raise money for your business

Potential investors or lenders want a written business plan before they give you money. In Zimbabwe many businesses have already failed and to reduce the risk Investors, Banks etc. require a business plan to see if the Management knows the most important things in their business. A mere description of the business concept is not enough. The plan must include a thorough business and financial plan that demonstrates the likelihood of success and how much the business needs to be successful in the long term.

3. To make good decisions

In addition to the banks a business plan acts as a guide for the entrepreneur. Deviation from the guide is minimized. Having a business plan helps you define and focus on your business idea and strategy. Because a plan touches many aspects, the entrepreneur will not focus only on financial matters, but also on management issues, human resource planning, technology, and creating value for customers.

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4. Identification of any potential weaknesses

Having a business plan helps you identify potential pitfalls in your idea. You can also share the plan with others who can give you their input and advice. Identify experts and professionals who are in a position to give you valuable advice and share your plan with them. Even banks can tell you the risks associated with your business when you apply for a loan.

5. To communicate your ideas to stakeholders-Viability

A business plan is a communication tool that you can use to obtain investment capital from financial institutions or lenders such as banks. You can also use it to convince people to work for your company, get credit from suppliers, and attract potential customers. For an international company that wants to invest locally, ZIDA requires a well-written plan to license the entity. For special licenses such as Telecoms licensing regulatory bodies also look at the business plan and the business proposal.

6. Creating a business plan involves a lot of thought.

You need to consider what you want to do and use that as a starting point. It doesn’t have to be complicated. At its core, your plan should identify where you are now, where you want your business to go and how you will get there. Writing a good business plan does not guarantee success, but it can go a long way toward reducing the chances of failure. Plus, even if you’re not looking for investment, your entrepreneurial plans will fall flat quickly without a plan to guide them.

7. Planning reduces the risk of uncertainty

Planning helps the entrepreneur look ahead and anticipate changes by deciding in advance the tasks to be done. The business plan shows how to deal with changes and uncertain (unexpected) events. Changes or events cannot be eliminated (removed), but they can be anticipated (predicted), and management responses can be developed in advance. Thus reducing the impact of risk.

8. Planning reduces overlapping activities and waste

A good business plan must show a coordination of efforts of different divisions, departments, and people. It must also ensure clarity of thought and action and help in smooth work without interruption. It must show stakeholders such as the Bank that confusion, misunderstanding, unnecessary activities have been minimized. It makes it easier to detect inefficiencies and minimize work pressure.

9. A good plan establishes standards to monitor

Controlling involves a comparison of actual performance with pre-determined standards. In case of any deviation, the management can take remedies to improve the results. All this is shown in a business plan. In the absence of a business plan, a manager will have no standard to monitor actual performance.

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10. It must consist of industry analysis:

A good business plan consists of a background and overview of the industry and, along with important trends, key success factors, as well as an outlook for the future. This gives an open overview to the financier. It shows the lucrative business.

Important elements of a business plan

1. Executive Summary- This part includes the business management structure plus it spends the company’s mission statement.

2. Products and Services- This portion seeks to elaborate the services or products the business offers or intends to offer in the market.

3. market analysis – the business must show that it understands its market in full. Remember the Bible says there is nothing new under the Sun- (Ecclesiastes 1:9) Therefore the business is not unique the trends that affect the business have already been experienced by others.

4. Marketing strategy – the business must show how it intends to keep its customers and reach new customers.

5. Cash Flow- It must include financial projections for start-up or historical for existing business.

6. Budget- A budget is essential to show investors or the bank how the business intends to use their money.


It takes a lot of quality time to make a good business plan that speaks to your business. It is always good to hire experts to write a business plan. DON’T PLAN TO PLAN PLAN TO FAIL. To run a business there is no alternative way other than making a business plan. A Business Plan must be followed to make the business successful, not just set aside. I encourage business leaders to approach professionals like this writer to make their business plans.

There are many investors in Zimbabwe who are looking for places to put their money but sometimes they do not find businesses to put their money. I have been approached by many potential investors who are hungry to invest in this country and my encouragement to businesses is to have good business plans, cash flow, keep books of accounts and systems in place. Banks and Investors also like to invest their money in a company that has an efficient and effective business plan that clearly shows its financial projections and its chances of success in the projected business.

Francis Chitambira is the founder of Smartfiscal Consultants – a business advisory firm. He is a business consultant, entrepreneur, business tutor, tax consultant and business promoter. He has interest in agriculture and marketing. He can be reached on cell/WhatsApp: +263775844941 or email: [email protected]; website: www.smartfiscal.co.zw

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