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How to Come Up With Uncommon Business Idea and Write a Successful Business Plan

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Business Plan

Business Plan

Business Plan

A business plan is a database of information related to the details of a business. It is a valuable document when seeking credit and other support.


Business Idea

A business idea is the perception that a course of action is potentially profitable or value adding. An idea is however not synonymous with an opportunity. An idea is simply the conception of a possibility. You need to understand that ideas are an entrepreneur’s raw material. In business idea generation, an entrepreneur opens up to new horizons and content. Without idea generation or opening up, an entrepreneur will not get an innovative part in the business idea. In a business idea generation, multitude of ideas is generated as the emphasis is initially on quantity and not necessarily quality. People piggy back on ideas and create new combinations and modifications after first generating ideas at the individual level. Idea generation process, whether to find a significant solution to a problem or to generate solutions to a problem benefits from few restrictions and no evaluation or criticism. The rationale is that either praising or criticizing an idea at this point might shut the flow of additional ideas or restrict the direction of thought too early in the process. There are many sources of ideas for an entrepreneur.

Sources of business ideas

  1. Existing situation that you may want to improve.
  2. Existing way of doing something that you want to improve.
  3. An existing product/service that you want to improve.
  4. A new way of doing things.
  5. A problem.
  6. Common needs.
  7. Mismatch between demand and supply.
  8. A gap in the market.
  9. A problem that needs to be addressed.
  10. A more efficient or effective way of doing business.
  11. New technology.
  12. Skills and expertise and aptitude.

Business opportunity

Entrepreneurship is all about opportunity. It is about identifying and evaluating an opportunity. Entrepreneurs often have one or two things on their minds and these are how they will come up with a good business idea and they worry if the idea is good enough to make a successful business. There are many definitions of what an opportunity is all about. A good idea is not necessarily an opportunity. An opportunity is a solution that is offered to address a problem and customers are willing to pay for it that the provider gets a profit. The causal nature of opportunities needs to be assessed to understand what leads to the existence of an opportunity. It is important to know that an idea is not necessarily an opportunity. An idea becomes an opportunity if it is characterized as;

  1. Attractive: structure, size, capacity and cost structure in the market is attractive.
  2. Durable: it must continue in a particular condition and not wear out soon.
  3. Timely: presented to the market at the opportune time anchored in a product or service that creates or adds value for its buyer or end user.

Size of the market and timeframe are key in judging the attractiveness of an idea. It is important that for an idea to be an opportunity, it must have the power to please the consumers mind or eye and arouse his or her interest, thus drawing the consumer to purchase the good or service. A viable business opportunity has a customer, and enables an entrepreneur to make profit, be creative, and meet a need within the market. A gap in the market or a marketing opportunity could exist as a result of;

  1. Existing unresolved problems.
  2. Unsatisfied and common customer needs.
  3. Shortcomings or weaknesses of possible competitors or suppliers to competitors.
  4. Changes in the environment that might create needs, such as political or economic changes or even changes in the international market.
  5. Shortcomings or weaknesses of possible competitors or suppliers to those competitors.

Industry/market analysis

The industry or market analysis is critical and the market will ultimately dictate how successful your business will be. You need to know what your target market is, and why they would be interested in buying from you and you need to be specific. Make sure you outline the strengths and weaknesses of your potential competitors, as well as strategies that will give you a competitive advantage.

In the venture feasibility analysis, it may be enough to prove that a sufficient market exists for the venture and, therefore, further in depth research is warranted. Study your competitors in the marketplace. Lessons learned from competitors will provide you opportunities to find the real unique distinctions in your own concept

Market segments

A market can be divided into different “market segments” and these can be;

  1. Geographic segments: e.g. local/urban, national/international.
  2. Demographic segments: young, old
  3. Income segments: poor, middle class, upper class.
  4. Psychographic segments: organic, fair trade, none of these (i.e. normal mass production).


Basic types of business plans

  1. Short business plan.
  2. Extended business plan.
  3. Operational business plan.


Structure of a Business Plan

  1. Cover page
  2. Table of contents
  3. Basic information
  4. Product/service
  5. Reasons for selecting the activity
  6. Raw materials
  7. Production
  8. Personnel (division of responsibilities).
  9. Technology and equipment
  10. Marketing
  11. Financial aspects

Be familiar with the format of the business Plan

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Understanding Structure of a Business Plan

A business plan has the following elements: Basic information: About the company such as name and address of the company. It also includes the vision and mission statement of the organization.

1. Basic business information

This contains the name of business, address, village, traditional authority, district, country, tel. no, email address, total number of members, number of active members among others.

2. Vision and mission

Under this you tell the objective of forming the business.

Mission

This tells who we are, what we do, where we are now. Mission is not to make profit, but mission is what we will do to make a profit. An example is Microsoft its mission is to empower people through great software, anytime, any place, and on any device while Otis elevator its mission is to provide any customer a means of moving people and things up and down and sideways over short distances with higher reliability than any similar enterprise.

Vision

Vision shows the desired future state of the business and it shows what the business would be like to achieve by starting the business.

3. Details about business

This shows the type of business and what product /service is the business going to provide.

4. Raw materials

This provides details on the type of material required and Quantity

5. Production

This shows what is produced and all the production cycles involved. If the unit makes more than one product, each must be documented individually.

6. Personnel (division of responsibilities)

This shows the type of skills you expect the employees to have and how you will recruit these personnel. It also shows how much do you expect to spend on their salaries.

7. Technology and equipment

This shows the type of equipment you need in business and how much it cost.

8. Marketing

This shows who will be your customers, why they will buy your products, type of quality measures you do intend to follow and where you will locate your manufacturing unit and why. It also shows how the business will be prompted.

9. Financial aspects

This shows what your financial needs will be in your business.

10. Sales

This shows your anticipated sales forecast in your business.

11. Financial statements

This shows the profit and loss projection, cash flow projection, projected balance sheet and breakeven analysis.

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