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People who undertake their first international project may not have experience developing a business plan. In developed countries, business plans are typically developed by a marketing person, possibly with an MBA degree or similar experience.
However, we have found that a basic business plan is a critical component to do business in developing countries. A comprehensive business plan is the best tool to help a small business raise money. It is typically a requirement of any lender.
The business plan is also an excellent tool for getting business owners to research the facts surrounding their business in an objective manner. It can be an aid in the day-to-day management of the company, it can be the source of material for communicating with the press and anyone outside the company, and it is critical if the owners wish to raise funds or sell the business.
So, even if writing business plans may not be your specialty back home, you may be called upon to help write one. Having some understanding of the basics of a business plan makes an advisor much more effective in many situations. Fortunately, technology makes it easier for an advisor to help a client gather research and get a business plan started.
As with most aspects of technical assistance projects, it is important not to write the business plan yourself, but to assist the client in researching and developing the plan. Dredging up research data, providing sample business plans, and leading brainstorming sessions can all help the process, but the report must come fundamentally from the business owners to be of value.
This section describes the basics of business plans, points you to some technology resources, and discusses a business model prevalent in developing countries - the co-operative.
A business plan is a document that defines the goals for a business venture and proposes an outline for how those goals will be achieved. Ideally, it is clear, as concise as possible, and full of concrete research. It should establish realistic goals, and a sound methodology for achieving them. It is the blueprint for starting up a business and running a profitable operation. It should explain how the business will function and detail how funding will be obtained.
The old mnemonic for a business plan is the 3 M's: Money, Management, and Marketing. Strategies for how the business will deal with each of these major issues is the core of the business plan. If a client has an excess of dreams and ambition, but is short on how to convert them into a profitable business, focusing on these issues can help.
Sample Business Plan Outline
An outline for the business plan might be:
1. Cover Page. The name of the company and the date of the revision of the business plan should appear.
2. Confidentiality. This is often overlooked, but may be critical in a legal situation. A sample of this page appears below.
3. Executive Summary. A summary of the entire business plan. Often limited to one or two pages.
4. Business Description. Lists the business name, contact information, ownership, and locations of business.
5. Goals and Objectives. Description of why you are (or want to be) in the particular business.
6. Products or Services. A description of what you will be offering.
7. Market Analysis. An analysis of the market in which you will be competing. This section should be objective and filled with concrete facts and data that have been researched. Effective analysis and presentation of the data is important for the audience reading this section.
How and why will you be successful in this market?
How will you market?
How will you operate?
How will your products be positioned?
Who is your target audience?
What is your pricing strategy?
How will you handle distribution?
What are your sales forecasts?
9. Management and Operation. Describes the people, equipment, and facilities to support your business. Outlines the management team's strengths as well as gaps and weaknesses.
10. The Financial Plan. This is the most critical part of the business plan. It details:
Start-up costs (for a new business)
Projected profit-and-loss statement
Projected cash flow statement
Projected balance sheet
First year return-on-investment (for a new business)
11. Appendices. Any supporting documents or information. This may include recent tax returns, statements, or balance sheets for an established company.
Many excellent books and Web-based resources exist for developing a business plan. We can't begin to survey them all a Web-search or a visit to a good book store will yield dozens.
However, we have used these resources and recommend them:
One excellent source of information is the commercial site Bplans.com. They have extensive information on researching and composing a business plan, and sample plans for many types of businesses. You may wish to pay the fees for some of their advanced features, but if you do not wish to pay any fees, the free information on their site is worth the visit.
Small Business Administration
The US Small Business Administration (SBA) is a huge on-line resource for businesses. They are focused on US-based business ventures, but much of the information is applicable to businesses in developing countries.
Another approach to business development that is important in developing countries is the co-operative. A co-operative is typically an association of small businesses or individuals which meets some common economic goal that none of them could achieve individually.
Bob Albrecht related his experiences with a group of milk producers in Moldova. It formed because the individual producers did not have the resources to refrigerate their products. A good portion of the milk spoiled before getting to market. With the help of an international technical assistance project, they formed a co-operative and constructed a central refrigeration facility that became the delivery point for all the producers, and the central market for milk products. Spoilage was eliminated and sales soared. The co-operative lasted until one of the producers used its new profits to develop a more efficient refrigeration facility which successfully competed with the co-operative.
A co-operative may a permanent solution to a problem or a transition phase to provide a service until entrepreneurs can fill a void. But, either way, the co-operative concept is powerful for pooling resources toward a common need or goal.
Here are some excellent web resources on co-operatives:
Sample Confidentiality Page
This is sample text for the confidentiality page for a business plan.
The undersigned reader acknowledges that the information provided by (company name) in this business plan is confidential; therefore, the reader agrees not to disclose it without the express written permission of (company name).
It is acknowledged by the reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by the reader, may cause serious harm or damage to (company name).
Upon request, this document is to be immediately returned to (company name).
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