“Our men, women and children should be taught to believe in the capacity of our group to succeed in business, in spite of the trials and failures of some of them. Trials and failures in business are by no means confined to any particular group of people. Some business ventures of all people fail. We have many men and women among our people who are qualified, both by training and experience, who are shining lights in the business world of all the people. It is a sad weakness in us as a people that we have withheld the very encouragement, support and patronage that would have made some of our worthy business ventures a grand success. And worst of all, have joined in the condemnations of them when they failed. Except in cases of actual dishonesty, discourtesy, lack of service and actual unreliability, our business enterprises in every field of endeavor should have lulled of confidence cooperation and patronage whenever and wherever they can be given.” – Noble Drew Ali
Moors and Business: Developing a Plan for a Success Business
I am a strong believer in the Moorish Community developing, implementing, applying and demonstrating effective and competent business strategies and business plans. However, the understanding and insight for such a plan may not be readily available without the consultation of a business professional. Moorsgate.com is dedicated to providing Moors/Asiatics with the necessary tools for both divine and national success.
The importance of planning should never be overlooked. For a business or organization to be successful and profitable, the owners, shareholders, trustees and/or the managing directors must have a clear understanding of the company’s/organization’s customers, strengths and competition. They must also have the foresight to plan for future expansion. This document will serve as a financing proposal tool which could provide direction for any Asiatic/Moor seeking to involve him or herself in the world of business. The key is to move one’s self or collective body through the Cash Flow Quadrant. The aim of the consulting arm of Moorsgate is to provide informative information that will benefit anyone willing to use time tested jewels for success to advance themselves or their collective body.
This written resource will take each of you through a step-by-step process for developing a business plan for a business or organization. A business plan is very specific to each particular business and requires in-depth research. To complete an effective business plan requires you to be objective, critical and focused. The finished project is an operating tool to help manage your business or organization while guiding the governing or managing body toward success. The plan also serves as an effective communication tool for financing proposals and grant writing.
I. The Importance of Writing a Business Plan
Why should a business or organization develop a business plan? MBAs and consultants will tell you that there are six primary reasons:
1. The process of putting a business plan together forces the individual or group preparing the plan to look at the business/organization in an objective and critical manner.
2. It helps to focus ideas and serves as a feasibility study of the business’s/organization’s chances for success and growth.
3. The finished report serves as an operational tool to define the company’s present status and future possibilities.
4. It can help the individual/organization manage the business and better prepare for success.
5. It is a strong communication tool for your business. It defines your purpose, your competition, your management and personnel. The process of constructing a business plan can be a strong reality check.
6. The business plan is helps add credibility to the individual’s or organization’s financing proposal.
Planning (one of the nine management systems) is critical to a business’ survival. By taking an objective look at your business you can identify areas of weakness and strength. You will realize needs that may have been overlooked, spot problems and nip them before they escalate, and establish plans to meet your business goals.
The business plan is only useful if you use it. Ninety percent of new businesses fail in the first two years. Failure is often attributed to a lack of planning. To enhance your success, use your plan! A comprehensive, well constructed business plan can prevent a business from a downward spiral.
Finally, your business plan provides the information needed to communicate with others. This is especially true if you are seeking financing. A thorough business plan will have the information to serve as a financial proposal and should be accepted by most lenders.
II. Who Is Involved in the Development of the Business Plan?
The owner of the business or the Acting Board Members of an Organization should write the business plan. It doesn’t matter if you are using the business plan to seek financial resources or to evaluate future growth, define a mission which provides guidance for achieving your goals and operating our business or bringing your organizational goals into fruition.
There are a number of software packages in addition to this article that can assist you in the formatting process: Business Plan Pro, Palo Alto Software are only two of many available. Consultants are helpful in this process, but it recommended that a majority of the work be completed by the individual or organization. Only they can generate the financial data, the purpose of the business or organization, and the vision of the business or organization.
III. Business Plan Components
The Executive Summary
The first page of your business plan should be a persuasive summary that will capture the reader and entice them to take the plan seriously. The Executive Summary should follow the cover page, and not exceed two pages in length.
The summary should include the following:
• A brief description of the company’s/organization’s history
• The company’s/organization’s objectives
• A brief description of the company’s/organization’s products or services
• The market the business will compete in
• A persuasive statement as to why and how the company/organization will succeed, discussing the company’s/organization’s competitive advantage
• Projected growth for the company’s/organization’s and the market
• A brief description of the key management team
• A description of funding requirements, including a time-line and how the funds will be used
The Product or Service
It is important for the reader to thoroughly understand your product or service offering. However, it is important to explain this section in layman’s terms to avoid confusion. Do not overwhelm the reader with technical explanations or industry related terminology that he or she will not be familiar with.
It is important to discuss the competitive advantage your product or service has over the competition. You will want to discuss the benefits of your product or service.
If appropriate, discuss any patents, copyrights and trademarks the company currently owns or has recently applied for and discuss any confidential and non-disclosure protection the company has secured.
Discuss any barriers that you face in bringing the product to market, such as government regulations, competing products, high product development costs, the need for manufacturing materials, etc. Areas that should be covered in this section include:
• Is your product or service already on the market or is it still in the research and development stage?
• If you are still in the development stage, what is the roll out strategy or timeline to bring the product to market?
• What makes your product or service unique? What competitive advantage does the product or service have over its competition?
• Can you price the product or service competitively and still maintain a healthy profit margin?
Investors look for management teams with a thorough knowledge of their target market. If you are launching a new product or service, include your marketing research data. If you have existing customers, provide an analysis of your client demographic, their purchasing habits and their need for your product or service.
This section of the plan should include:
• A general description of your market
• The niche you plan on capitalizing on and why
• The size of the niche market. Include supporting documentation
• A statement and supporting documentation as to why you believe there is a need for your product or offering by this market
• What percentage of the market do you project you can capture?
• What is the growth potential of the market? Include supporting documentation
• Will your share of the market increase or decrease as the market grows?
• How will you satisfy the growth of the market?
• How will you price your goods or services in the growing competitive market?
The Marketing Strategy
The next step is to explain your strategy for reaching the market and distributing your product or service. Potential investors will look at this section carefully to make sure there is a viable method to reach the target market identified at a price point that makes sense.
Analyze your competitors’ marketing strategies to learn how they reach the market. If their strategy is working, consider adopting a similar plan. If there is room for improvement — work on creating an innovative plan that will position your product or service in the minds of your potential customers. The most effective marketing strategies typically integrate multiple mediums or promotional strategies to reach the market.
The following are some promotional options to consider:
• Printed Materials (e.g. Newspaper, Magazine)
• Trade shows
• Public relations
• Promotional materials
• Direct Mail
• Individual sales
• Strategic Partnerships
Understanding your competition’s strengths and weaknesses is critical for establishing your product’s or service’s competitive advantage. If you find a competitor is struggling, you need to know why, so you don’t make the same mistake. If your competitors are highly successful, you’ll want to identify why. You’ll also want to explain why there is room for another player in the market.
Specific areas to address in this section are:
1. Identify your closest competitors. Where are they located? What are their revenues? How long have they been in business?
2. Define their target market.
3. What percentage of the market do they currently have?
4. How do your operations differ from your competition? What do they do well? Where is there room for improvement?
5. In what ways is your business superior to the competition?
6. How is their business doing? Is it growing? Is it scaling back?
7. How are their operations similar to yours and how do they differ?
8. Are there certain areas of the business where the competition surpasses you? If so, what are those areas and how do you plan on compensating?
Analyzing your competitors is a ongoing process. Knowing your competition will allow you to become more efficient and effective in your target area.
Next is how will you implement the idea. What resources and processes are necessary to get the product to market? This section of the plan should describe the manufacturing, R&D, purchasing, staffing, equipment and facilities required for your business.
You’ll want to provide a roll out strategy as to when these requirements need to be purchased and implemented. Your financials should reflect your roll out plan.
In addition, describe the suppliers you will need to build the business. Do you have current relationships or do you need to establish new ones? Who will you choose and why?
Management and Leadership
For most investors the experience and quality of the management and leadership team is the most important aspect they evaluate when investing in a company. Your plan must communicate management’s capabilities in obtaining the objectives outlined in your plan.
When preparing this section of the business plan you should address the following five areas:
1. Personal history of the principals:
a. Business background of the principals
b. Past experience — tracking successes, responsibilities and capabilities
c. Educational background
d. Personal data
e. Personal financial statement with supporting documentation
2. Work experience:
a. Direct operational and managerial experience in this type of business
b. Indirect managerial experiences
3. Roles and Responsibilities:
a. Who will do what and why
b. Organizational chart with chain of command and listing of duties
c. Who is responsible for the final decisions?
a. A simple statement of what management will be paid by position
b. Listing of bonuses in realistic terms
c. Benefits (medical, life insurance, disability…)
5. Resources available to your business:
a. Insurance broker(s)
b. Legal Advisors
d. Consulting group(s)
e. Small Business Association
f. Local business information centers
g. Chambers of Commerce
h. Local colleges and universities
i. Federal, state, and local agencies
j. Board of Directors
k. World Wide Web (various search engines)
The business plan must also include information about personnel. The following represents a list of questions that should be answered:
1. What are your current personnel needs (full or part-time)? How many employees do you envision in the near future and then in the next three to five years?
2. What skills must your employees have? What will their job descriptions be?
3. Are the people you need readily available and how will you attract them?
4. Will you be paying salaries or hourly wages?
5. Will there be benefits? If so, what will they be and at what cost?
6. Will you pay overtime?
IV. Financial Data
The heart of any business operation is the accounting system and financial data. It is recommended that a relationship with a certified public accountant (CPA) be established for the analysis, observation and critique of your fiscal management system (one of the nine management systems).
One of the first steps to having a profitable business is to establish a system for record keeping and reporting which provides you with data in the following four areas:
• Balance Sheet – indicates what the cash position of the business is and what the owner’s equity is at a given point (the balance sheet will show assets, liabilities and retained earnings).
• Break-Even Analysis – is based on the income statement and cash flow. All businesses should perform this analysis without exceptions. A break-even analysis shows the volume of revenue from sales that are needed to balance the fixed and variable expenses.
• Income Statement – also called the profit and loss statement, is used to indicate how well the company is managing its cash, by subtracting disbursements from receipts.
• Cash Flow – this projects all cash receipts and disbursements. Cash flow is critical to the survival of any business.
If the goal of your business plan is to obtain financing, you will be required to generate financial forecasts. The forecasts demonstrate the need for funds and the future value of equity investment or debt repayments. This exercise is critical in obtaining capital for your business. To obtain capital from lending institutions you must demonstrate the need for the funding and your ability to repay the loan.
The forecast that you generate should cover a three to five-year period. This is a period in which realistic goals can be established and attained without much speculation. Forecasts should be broken down in monthly increments.
Projections and forecasts are an integral part of your financial portfolio. Carefully and accurately state your assumptions. Honesty is the best policy! Over-optimism and over-inflation can lead to failure. For more help, review the tools Conduct a Sales Forecast and Prepare a Balance Sheet.
V. Supporting Documentation
You must include any documents that lend support to statements made in the body of your company’s business plan. The following is a list of some items for your consideration. This list is not complete and may vary depending on the stage of development of your business or organization.
2. Credit information
3. Letters of Intent from prospective customers
4. Letters of Support from credible people who know you
5. Leases or Buy/Sell Agreements
6. Legal Documents relevant to the business
7. Census/Demographic data
The completed business plan should be bound; however, for internal purposes three-ring binders work well. Amendments can be easily added to this version of the business plan. The business plan that is intended to be circulated to a lender and/or investor should look professional and organized. The business plan should become an operational tool to measure the success of the business. However, the plan should be updated as milestones are reached.
- Moorsgate Consulting Department