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Monday, October 16, 2017

Business Plan Competitions in Nigeria: Are they always worth the stress?

Many Nigerian entrepreneurs and business owners looking to raise either startup capital additional capital to fund their growth may have had cause to participate at a business plan competition in the past. Are business plan competitions really worth the trouble of submitting and participating fully in? We shall find out at the end of this article whether or not they are worth the stress.

What are Business Plan Competitions?
Let us begin first by asking what are business plan competitions? They are competitions designed usually by governments, international development agencies or consortium of investors to identify, mentor, and fund small and medium scale businesses which are viable and have great potentials for growth, employment creation and wealth creation. Usually they are part of a larger project by governments and major international organisations to achieve sustainable development goals or enable various countries achieve major economic and developmental aims. Therefore a business plan competition is both an economic and social development project.

Why Should Business Plan Competitions Matter to Entrepreneurs
There are a few reasons why you should participate in Business Plan Competitions. The main reason is that you could attract funding for your business if you win at the competition - that is not including the prize money by the way. Some business plan competitions like the Abuja Business Plan Competition offers prize money for the best 10 entries in addition to access for funding from high net worth individuals who may be interested in investing in SMEs with huge growth potentials.

Another benefit is the chance to network and meet potential business partners and customers. Like a trade fair which is principally a networking and marketing event, you could say a business plan competition also offers entrepreneurs new business opportunities that they may not have heard of but for the business plan competition.

Entrepreneurs can also be mentored through trainings, courses, conferences, case studies, lectures, affiliations with established business schools and institutions to mention a few entrepreneurs can actually be empowered with new skills, knowledge, information and strategies that could take their businesses to the next level.

Why Business Plan Competitions may be a waste of time
The other end of the divide presents the failure of the human factor in most noble projects. On one hand, business plan competitions are designed for entrepreneurs but they may not function that way. The organisers usually have interests and goals to achieve which may not correspond with the expectations and interests of the applicants at the competitions. Some entrepreneurs understand their businesses thoroughly but the competition organisers may hire ‘experts’ to review their applications and many of these so called ‘experts’ are questionably qualified to assess the viability and potentials or otherwise of emerging new businesses.

Most startup businesses which attracted huge funding for their businesses never applied to a business plan competition, because there are other alternatives which show greater promise. So someone like Mark Zukerburg who didn’t get the funding he required for facebook from a business plan competition may be right to ask “why bother then?”

Stiff competition and limited funding also reduce the chances of serious entrepreneurs with bankable business plans and viable businesses as well who may have to struggle to convince a panel of judges that they and not others should be considered.

There is also the issue of the integrity and competence of the competitions’ managers. YOUWIN for instance has faced allegations of favoritism, nepotism, lack of due diligence and lack of due process in the award of grants. Many grant winners have folded up their businesses due to inexperience, poor management, an unviable business model or other risks that were not factored in when these businesses were being assessed for viability and suitability for grant.

Business Plan Competitions in Nigeria: past, present and the Future
There will always be business plan competitions available to Nigeians whether they are perennial – once every 3 years – like the Abuja Business Plan Competition or annual like the YOUWIN, African Young Entrepreneurs Empowerment Nigeria, Tony Elumelu Entrepreneurship Programme or one off like the Pat Utomi @ 60 Business Plan competition, they have come to stay albeit for an uncertain period. Some other global and regional international business plan competitions hold in various parts of the world and Nigerian entrepreneurs can seize advantage to be part of it.

My Take on Business Plan Competitions
If you are new, young, inexperienced but have a business you believe so much in, then go ahead and participate in a business plan competition. This is because even if you don’t get funded, there are other benefits you can gain from them. If on the other hand you have lots of experience, you have an existing SME with strong growth and profit potentials and you have made concrete progress in growing your business with the little resources you have, then look for alternative sources as they are usually more promising, that is not to say business plan competitions are only for novices, but serious investors with interests in SME ventures are often nowhere near business plan competitions and they are not likely to fund startups run by inexperienced entrepreneurs.

Are you looking to submit a bankable business plan to an investor, bank or business plan competition and need very sound and reliable write up? Give me a call: 0803 206 4106 or email me: paulonwueme@gmail.com

Tuesday, October 3, 2017

5 Business Plan Formats/Outlines to Know

Business plans that attract the kind of desired funding usually owe their success to certain factors one of which is their outline/format. In Nigeria from my experience, I have come across some institutions especially banks and venture capitalists which have specifications for business plans submitted to them. Even an experienced business plan writer in Nigeria should know better than to submit an inferior business plan based on the fact that the format he/she is working with has limitations which may affect the strength of his/her presentations.

So I would like to share a few business plan formats which although are standard in their own right still have one or more limitations. It is up to the business plan writer using each format to address the lapses and make the business plan as presentable and effective as possible. 

First Sample Business Plan Format (Lavinsky’s Template)

  • Executive Summary
  • Company Overview
  • Industry Analysis
  • Customer Analysis
  • Competitive Analysis
  • Marketing Plan
  • Operations Plan
  • Management Team
  • Financials
  • Appendix

Source: www.growthink.com

This business plan format is detailed and very organized but stereotypical and assumes that business operating climate is stable which is not so in Nigeria. Therefore you may use this in a fairly stable industry in Nigeria or in countries where the business environment is well regulated and stable. In comparison to the next sample formats I would rate this higher.

Second Sample Business Plan Format (SBA’s Template)
  •  Executive Summary
  • Company Description
  • Market Analysis
  • Organisation and Management
  • Service or Product Line
  •  Marketing and Sales 
  •  Funding Request
  •  Financial Projections 
  •  Appendices

This is a well-researched business plan format designed for small businesses in the US and Canada looking for funding either from government sanctioned financier or venture capitalists. The business plan developed from this is simple but the main disadvantage is that it doesn’t look at unstable economic climates where government policies are inefficient, it is weak on implementation planning and risk analysis. It also doesn’t focus on manufacturing industries and seems more suitable for services and retail.

Third Sample Business Plan Format (Bplans.com’s Template)

  • Executive Summary
  • Company Summary
  • Products
  •  Market Analysis Summary
  • Strategy and Implementation Summary
  • Management Summary   
  • Financial Plan
  • Appendix

This is the most widely used business plan format I have come across. Some business plan competitions I know of have had most of their submitted business plans using this format. The Format is simple to use and flexible but there is a little consideration about business risks, environmental challenges etc. I believe this business plan format is not very persuasive in that the title for each section leaves little room for capturing strong ideas. 

Fourth Sample Business Plan Format (Entrepreneur Mag’s Template)

  • Executive summary
  • General Company description
  • The opportunity
  • Industry and Market
  • Overall Business strategy
  • The management team
  • Marketing plan
  • Operational plan
  • Financial plan
  • Appendix

This is a very good business plan format to work with. It is a very adaptable format that will work in almost any country, any industry and at any scale. The contents allow for additions of strong compelling ideas and even a novice business plan writer with excellent research skills will find this format very useful.

Fifth Sample Business Plan Format (Business First’s Template)
  • Executive Summary​
  • Enterprise Description
  • Product or Service Description
  • Industry Analysis
  • Competition Analysis
  • Swot Analysis
  • Marketing Sub-Plan
  • Operations Sub-Plan
  • Human Resources Sub-Plan
  • The Budget
  • Liquidity
  • Financial Sub-Plan
  • Selected Options and Critical Measures
  • Milestone Schedule​

Source: www.businessfirst.com.mt

From this selection, this is the most detailed, best organized and most technical business plan format. It is ideal for large scale and highly technical business ventures and requires deep managerial understanding to present. This business plan fits into a proper ‘MBA Standard Business Plan’ and requires plenty of research and analysis. But it is too technical for use with Nigerian SMEs and although it is adaptable I won’t recommend it for Nigerian entrepreneurs except those who are seeking overseas funding and technical partnerships.

Want to write a business plan that covers all the necessary loose ends and presents persuasively? Give me a call: 0803 206 4106 or email me: paulonwueme@gmail.com for details

Wednesday, September 27, 2017

Top 5 Misconceptions Nigerians have about Business Plans

 Many Nigerian entrepreneurs have very wrong worldview about business plans. They tend to see it as something – akin to trying to pass an exam in school - you present to an investor, bank or development agency to score points by letting see what you think will convince them to buy into your business idea.

That would have been correct if the real world functions like the academic world. In real life business situations, street wisdom rules to a large extent and the same academic approach would fall flat on its face if the real issues that make things happen are conspicuously absent in your business plan. Secondly there are mindset issues you must eliminate before you ever conceive preparing a business plan for submission.

That is what this article is out to address, but will only focus on 5 misconceptions Nigerians have about business plans which can negatively affect how they can present professionally and persuasively to interested stakeholders. Here are 5 common misconceptions Nigerians have about business plans.

You Only Need a Business Plan to Raise Capital
Most Nigerian business owners or entrepreneurs think a business plan is only needed when it’s time to raise capital from investors or loans from banks and other lending institutions. They are partially right to think you may not need a business plan to succeed in business but that is if you are a master in your business. Sometimes even highly experienced business owners still need a business plan as a working document. A highly experienced business consultant I sometimes work with still contacted me recently to prepare a strategic plan for his consulting business which is over 15 years in existence and he isn’t looking to raise capital to fund it. He just needed an objective worldview for his consultancy over the next 10 years. So you don’t only need a business plan to raise capital, it can also serve as a blueprint for future success.

You can use any Format for your Business Plan
Initially I used to think this way too until I got a call from a business analyst who reviewed a business plan I submitted to a client. He was very upset that I used a sample business plan format I got online which according to him is not suitable for his client’s business model. He sent me another one to work with instead and asked that I be very mindful in future the kind of business plan format I use as different businesses require unique presentations. So business plan formats are not one size fits all, they must be adapted to a particular business for them to make good impact.

Professionally Written Business Plans are too expensive

This is one poor mindset to have in my opinion. It’s like wanting high quality education for free or wanting to live in a mansion but paying bus fare rate to own it. That is why many people who consult Professional Business Plan Writers in Nigeria scamper for safety when they hear How Much it Costs to write a Professional Business Plan only for them to end up patronizing quacks who can sell them pre-written and copied business plans for N10,000. A big mistake if you want to submit this to a business plan competition where probably other applicants in similar industry would have bought the same business plan and made skeletal editing. After having the business plan turned down, the same person may have no choice than to call on a professional to write him the business plan – that is like being penny wise and pound foolish.

Business Plan and Business Proposal both mean the same thing
For many Nigerian business owners/entrepreneurs, a business plan is the same thing as a business proposal. There is an informative article on what is business proposal which you will find here how to write an effective business proposal. They are very different indeed. A business plan is blueprint for success in business – how you will exploit a business opportunity using an established venture. A business proposal is an offer to be part of a business opportunity in which all parties involved stand to benefit and it’s usually short term and may or may not involve established ventures. The format, layout and targets for both are not the same.

You can Copy, Edit and Present a Sample Business Plan for Submission
Just as I stated earlier, this is a very bad idea especially when submitting to a business plan competition. It will portray you as someone lacking integrity and competence. Moreover just like finger prints, no two businesses are exactly the same no matter how one tries to copy another. There are differences in company structure, culture, mode of operations, even locations of businesses are different and target customers in different regions have different behaviours. The list goes on, can a supermarket based in Onitsha realistically have the same business plan as another based in Kano? If you copy and edit a business plan for a restaurant based in Los Angeles, do you really think its contents will apply for a restaurant that will operate in Lekki or Festac?

I will conclude by saying you are more likely to find success in business and in life if you are properly informed, getting rid of misconceptions and false beliefs is the starting point. Thanks for reading.

To get a professionally written business plan in Nigeria call: 0803 206 4106 or email: paulonwueme@gmail.com