Toolkit on how to Start and Improve your Business

Business Planning

• Introduction

• Business plan for micro and small enterprises

• Business plan for medium and large enterprises

 Introduction to Business Planning   [top]                                                  

A business plan is the most essential document for starting, building and making businesses successful. It is an effective tool for raising the necessary capital to start and/or run business enterprises. The business plan describes what the business will do, how and where it will be started. Many businesses fail due to lack of planning and preparation. 

The preparation of a business plan
is important because it provides information about:

• What profit your business can expect to make in the future;

• How much money you can expect to come into and go out of your business;

• Level of profit expected from your business within the period of the life of the business;

• Which part of your business you can improve.

The two most important planning documents for your business are:

• Sales and cost plan;

• Cash flow plan.

When you make business plans:

• Make them simple;

• Choose the most suitable period;

• Make them before you need to use them;

• Look for information.

In working out your own project, you should prepare a sound business plan based on data which you collected and in which you have the utmost confidence. Make your business plan tailor-made based on your specific strengths and weaknesses. Decide on how much of your savings should be invested in the project, how much income you should generate from the business, who your clients would be, and which technical process is in line with your level of skills, resources and market size. 

The following two checklists are presented to show you two business plan formats. 'Business plan format 1' is envisaged to serve people who engage themselves in micro and small enterprise activities, whereas 'Business plan 2' may be used by medium and large businesses. The formats will help you take practical steps to prepare your business plan accordingly. You will find help topics and explanations for the majority of the elements of 'Business plan 1'.  When applying the formats, you need to organise and make use of data collected in the information seeking stage.

 Business Plan format 1 for Micro and Small Enterprises   [top]           

Business Plan

1.  Full name of the business operator ..............................................................

2.  Address: Woreda / Sun-City............................... Town .................................

Kebele......................................................................... House no......................

3.  Type of the plan/work/business.........................................................................................

4. Date of business plan:  From..................................... to .............................

5. Work premises at the disposal of the operator ..........................................
(location, size, facilities)

Specify, if there is any advantage or problem related to the location:

.......................................................................................................................

    6. Yearly sales plan:

 Months during which sales are expected to be high .........................................  

   7.  Equipment currently owned by the operator:

 
   8.  Equipment to be purchased by the operator:

 
   9. Annual raw material requirements:

Sources of raw materials ......................................................................

   10. Other annual operating expenses:
    (e.g. labour expenses, sales expenses, depreciation expenses, tax expenses)