The Central Bank of Nigeria (CBN) in conjunction with the Bankers’ Committee, sometimes in May unveiled the Creative Industry Financing Initiative (CIFI), which will enable businesses to obtain loans up to the tune of N500 million.
In regard to that, a Nigerian financial expert, Kalu Aja, via his Twitter page shared tips on how entrepreneurs who are interested in obtaining the loans should write good business plans.
CBN wants a business plan
How to write a Business Plan
Table of Content
1. Executive summary.
2. Company description
3. Market analysis.
3. Organization and management.
4. Service or product line.
5. Marketing and sales.
6. Funding request.
7. Financial projections.
— Financial Planning (@FinPlanKaluAja) May 9, 2019
Below are all you need to know when writing a business plan according to Kalu Aja.
Executive summary: Tell your reader what your company is and why it will be successful. Include mission statement, product or service, basic info on company’s leadership team, employees, and location, financial information and high-level growth plans.
Company description: Provide detailed information about your company. Go into detail about the problems your business solves. Be specific, and list out the consumers, organization, or businesses your company plans to serve. Explain the competitive advantages that will make your business a success. Are there experts on your team? Have you found the perfect location for your store? Your company description is the place to boast about your strengths.
Market analysis: You’ll need a good understanding of your industry outlook and target market. In your market research, look for trends and themes. What do successful competitors do? Why does it work? Can you do it better? Now’s the time to answer these questions.
Organisation and management: Tell your reader how your company will be structured and who will run it. Describe legal structure of your business. State if you intend to incorporate your business as a Ltd or a Plc, form a partnership, or if you’re a sole proprietor. Use an organisational chart to lay out who’s in charge of what in your company. Show how each person’s unique experience will contribute to the success of your venture. Consider including resumes and CVs of key members of your team.
Service or product line: Describe what you sell or what service you offer. Explain how it benefits your customers & what the product life-cycle looks like. Share plans for intellectual property. If you’re doing research and development, explain it in detail.
Funding request: Outline your funding requirements. Your goal is to clearly explain how much funding you’ll need over the next 5 years and what you’ll use it for. Specify whether you want debt or equity, the terms you’d like applied, and the length of time your request will cover. Give a detailed description of how you’ll use funds. Specify if you need funds to buy equipment, pay salaries, or cover bills until revenue increases. Include a description of your future strategic financial plans, like paying off debt or selling your business.
Financial projections: Submit financial projections. Convince the reader that your business is stable and will be a financial success. If your business is already established, include income statements, balance sheets, and cash flow statements for the last 3 to 5 years. If you have other collateral you could put against a loan, list it. Provide a prospective financial outlook for the next 5 years. Include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets.
For the first year, be even more specific and use quarterly — or even monthly — projections. Make sure to clearly explain your projections, and match them to your funding requests. Use graphs and charts to tell the financial story of your business.
Appendix: Provide supporting documents or other materials specially requested for. Common items to include are credit histories, resumes, product pictures, letters of reference, licenses, permits, or patents, legal documents, permits, and other contracts.
He finally advised, “I have taken these from the business plan guidelines on the US Small Business Administration page. Remember this is a guide, feel free to customize and highlight your areas of strength in line with the CBN requirements. Good luck.”