JSS 3 BUSINESS STUDIES: CLASS NOTE

TOPIC: BUSINESS PLANS (PART 2) SUB-TOPIC: PROCEDURE FOR DRAWING UP A SIMPLE BUSINESS PLAN AND THE FORMAT OF A BUSINESS PLAN

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INTRODUCTION

In our previous lesson, we defined a business plan as a written document that describes in detail how a business—usually a startup—defines its objectives and how it is to achieve its goals. A business plan is the "road map" for a journey; without it, an entrepreneur is likely to get lost in the competitive world of commerce.

In this lesson, we will dive deeper into the practical aspects: how to actually write one and what sections must be included to make it professional and effective according to the Nigerian educational standards for Business Studies.

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SECTION 1: COMPREHENSIVE CORE CONCEPTS

1. The Procedure for Drawing Up a Simple Business Plan

Writing a business plan is a systematic process. You do not just wake up and start writing; it requires careful thought and investigation. The procedure follows these essential stages:

A. Idea Generation and Conceptualization The first step is deciding what business you want to do. Is there a problem in your neighborhood that needs solving? For example, if students in your school find it difficult to buy healthy snacks during break time, your business idea could be "Healthy Fruit Packs for Students." You must clearly define what your business will offer and who will buy it.

B. Market Research and Feasibility Study Before writing, you must go out and ask questions. This is called market research. You need to find out:

• Who are my competitors?
• What prices are people willing to pay?
• Where is the best location? A feasibility study is a "check-up" to see if the idea can actually work or if it will fail. If the research shows that people don't like fruit or that fruit is too expensive to buy in bulk, you might need to change your idea.

C. Information Gathering Once you confirm the business is feasible, you gather specific data. You need to list every single item you need (equipment, raw materials, rent, licenses) and find out their exact prices. In Nigeria, this might include the cost of a generator, fuel, or shop rent in a specific market.

D. Drafting the Plan This is the stage where you put pen to paper (or type on a computer). You organize the information gathered into the standard format (which we will discuss below). During this stage, you must be realistic. Do not overstate your potential profits or understate your expenses.

E. Review and Finalization After writing the first draft, you must review it. It is often helpful to show it to a mentor, a teacher, or an experienced business person. They can help you spot mistakes in your calculations or logic. Once corrected, the plan is ready to be presented to a bank for a loan or used as a guide for operations.

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SECTION 2: THE FORMAT OF A SIMPLE BUSINESS PLAN

A standard business plan follows a specific layout. Each section serves a unique purpose. Below is the format used by entrepreneurs worldwide:

I. Cover Page

The cover page is the "face" of your business. It must be neat and professional. It should include:

• The Business Name (e.g., Supreme Bread Bakery Ltd.)
• The Logo
• Contact Address, Phone Number, and Email
• The Date the plan was prepared.

II. Executive Summary

Even though this appears at the beginning, it is usually written last. It is a one-page summary of the entire plan. It highlights the business goals, the product, and the amount of money needed. Busy investors often read only the Executive Summary to decide if the rest of the plan is worth reading.

III. Business Description

This section explains what the business is all about. It includes:

• Mission Statement: Why does the business exist?
• Vision Statement: Where do you see the business in 5 years?
• Legal Form: Is it a Sole Proprietorship, a Partnership, or a Limited Liability Company?

IV. Marketing Plan

This is where you explain how you will get customers. You must describe your Marketing Mix (The 4 Ps):

1. Product: What exactly are you selling?
2. Price: How much will it cost? (Competitive pricing).
3. Place: Where will the business be located?
4. Promotion: How will people know about it? (Radio ads, flyers, social media, or word of mouth).

V. Operational Plan

This section describes the "behind-the-scenes" work.

• How will the product be made?
• What machines are needed?
• Who are the suppliers of raw materials?
• What is the daily schedule of the business?

VI. Management Team

Investors invest in people, not just ideas. Here, you list the owners and key staff, their qualifications, and their roles. Even as a student, you can list your skills in Business Studies and any previous experience you have.

VII. Financial Plan

This is the most critical part for lenders. It includes:

• Start-up Capital: How much money do you need to start?
• Sales Forecast: How much do you expect to sell in the first year?
• Profit and Loss Projection: A calculation of income minus expenses.

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SECTION 3: KEY POINTS & ELABORATIONS

1. The Goal of the Plan: A business plan is not just for getting loans; it is primarily a management tool to keep the owner focused.
2. Accuracy in Research: If your market research is wrong (e.g., thinking a bag of flour costs ₦20,000 when it actually costs ₦45,000), your entire plan will be faulty.
3. The SWOT Analysis: Often included in the marketing or business description section. It stands for Strengths, Weaknesses, Opportunities, and Threats.
4. Executive Summary Importance: Think of it as a "Movie Trailer." If the trailer is boring, nobody will watch the movie. If the summary is poor, nobody will invest.

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SECTION 4: MULTIPLE EXAMPLES (VARIED CONTEXTS)

• Example 1: A Tailoring Business (Service Sector)
  • Procedure: The entrepreneur researches the latest fashion trends in the city.
  • Format Focus: The Operational Plan would focus on the types of sewing machines (Butterfly vs. Industrial) and the source of fabrics.
• Example 2: A Poultry Farm (Agricultural Sector)
  • Procedure: The entrepreneur does a feasibility study on the mortality rate of chicks and the cost of feed.
  • Format Focus: The Financial Plan must account for the high cost of bird feed and vaccinations.
• Example 3: A Phone Repair Shop (Technical/Repairs)
  • Procedure: Researching which phone brands are most common in the local market.
  • Format Focus: The Management Team section would highlight the technical certifications and skills of the repairers.

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SECTION 5: ENGAGING ACTIVITIES

Activity 1: The "What's My Goal?" Mission Statement Challenge

• Instructions: Individually, choose a small business idea (e.g., selling zobo drink, a barbershop, or an errand service). Write a two-sentence Mission Statement for it.
• Hint: Sentence 1 should say what you do. Sentence 2 should say how you help your customers.

Activity 2: Group Research Project (Simulated)

• Instructions: In groups of five, assume you want to start a "School Stationery Shop."
  1. List 5 items you will sell.
  2. Find out the current market prices of these items.
  3. Create a "Promotion Plan" (How will you tell other students about your shop?).
  4. Present your findings to the class.

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SECTION 6: DETAILED SUMMARY

To draw up a successful business plan, an entrepreneur must follow a logical procedure: starting with an idea, conducting market research and a feasibility study, gathering information, drafting the plan, and finally reviewing it.

The format of the plan provides a professional structure. It begins with a Cover Page and an Executive Summary. It then describes the Business, the Marketing Strategy (how to sell), the Operations (how to produce), the Management (who is in charge), and finally the Financials (the money involved).

A well-written business plan reduces the risk of business failure and acts as a persuasive document for attracting investors and partners. Remember: "He who fails to plan, plans to fail."