PLANNING AND ORGANIZING A BUSINESS

A business (or firm) is an enterprise that provides products or services that customers desire. According to the Corporate Affairs Commission, more than five hundred thous businesses are created in Nigeria every year. Many businesses, such as Pz and Dangote Group of Companies, develop products for customers. Others such as Acro contractors, and Meridian Hotels, provide services rather than products. Managing a business that provides services can be as challenging and rewarding as managing a business that provides products, Developing a business plan Once entrepreneurs create a business idea, they can fully assess the potential profitability of that idea by developing a business plan. A business plan is a detailed description of the proposed business, including a description of the business, the types of customers, it would attract, the competition, and the facilities needed for production (Madura, 1998). The business plan is not only for the entrepreneur but also for any investors or creditors who may provide financial support. Entrepreneurs commonly provide their plans to these investors who may be willing to serve as partial owners. They also provide their plan to creditors (such as commercial banks) that may be willing to provide business loans. Thus a business plan must transport to bring in investors on board to generate profit. If investors do not believe in the business plan, there is a possibility of unwillingness. If creditors do not believe in the plan, they will not provide any loan The business plan can demonstrate that the entrepreneur has conducted a comprehensive review of all business aspects. The plan should stay focussed on all aspects that have an impact on potential profitability. Many business plans cover the following areas.

(i)Management Plan/Organizational Structure
A management plan focuses on the proposed organizational structure and production of the firm. An organizational structure identifies the role and responsibilities of the employees hired by the firm. Most businesses experience rapid growth when positions are shared among different bodies. Even if owners initially run the business they should develop plans for the future organizational structure.
Various decisions must be made about the production processes, such as the site (location) of the production facilities and the design and layout of the facilities. The location decision can have a major effect on a farm's performance because it influences both the price he renting space in a building and the revenue generated by the business.
(ii) Marketing plan
A marketing plan focuses on the target market, as well as product characteristics, pricing, distribution, and promotion.
(a) Product characteristics - The characteristics of the product should be described, with an emphasis on how the product is more desirable than similar products afforded by the competitors.
(b)Pricing - The proposed price of the product should be stated.
(c) Distribution - How the product will be distributed to the customers should be described.
(d) Promotion - How the product will be promoted should be stated. The promotion strategy should be consistent with the customer's profile. For example, products that appeal to secondary students may be advertised in students' magazines.

(iii)Financial Plan

The financial plan should demonstrate why the business is feasible and should propose how the business will be financed. This is how much funds will come, much from owners and how much from creditors.

(a)Feasibility:
The benefits and costs of business must be estimated to determine whether the business is feasible (whether the benefits exceed the costs). The business must be judged as feasible by.. the owner and by any creditor who will provide financial support.
The details of the business plan can be used to create forecasts of expected revenue and expenses of the business over time. Forecasts of the sales volume and product price could be used to forecast periodic revenue. The proposed organizational structure, location, design, and layout can be used to estimate the expenses involved in the proposed business.
The estimated revenue and expenses (including payments to creditors) can be used to forecast periodic earnings. These earnings can be evaluated to determine whether they provide
an acceptable profit to the owners. In addition, the risk of the business should be assessed by measuring the uncertainty of future earnings. If the risk is high, owners should be able to implement the project only if the potential profits adequately compensate for the risk involved.