MICROFINANCE: PROJECT FORWARD

John C Cranfield, Chief Executive, First Step Microfinance

John Cranfield explains the essentials of business planning.

One of the primary reasons for the collapse of early-stage businesses is improper business planning. Therefore, it is imperative for self starters to create a strong and succinct business plan that captures all aspects of a business’ vision, strategy and potential.

An abundance of literature exists on how to research and compose a business plan. However, John Cranfield explains how aspiring entrepreneurs often underes-timate crucial elements. “In a lot of cases it is the indi-vidual’s lack of knowledge of the market. They might have a good idea but they don’t realise how that idea would or would not fit into the actual marketplace.” According to Cranfield, self starters sometimes lack an understanding of fundamental financial issues such as whether they have enough collateral or whether the money they propose to have will translate their busi-ness plan into a sustainable reality.

In View

TRANSITION TIME

Once a business is up and running for a few years, the business plan then transforms into a strategic review. Cranfield believes that entrepreneurs need to go over their strategic review each year to assess how their business is performing and to determine the direction in which the business is heading. An entrepreneur should also analyse market changes and assess whether finance is necessary for future expansion. “It’s an ongoing process and every business should do it and all the successful businesses do it.”

While enthusiasm, market knowledge and passion are vital ingredients for any successful business plan, Cranfield advises people to take a step back from their plan in the initial stages to achieve an objective stance on critical issues such as market entry and the financial implications of their business. It is always worthwhile sharing the business plan with an external consultant, a family member or a confidante as they can all contribute to the plan’s organic potential.

If an individual does not already have a business plan written up when they approach First Step for microfinance, Cranfield delineates how the First Step team will introduce them to an external party who can assist. In encouraging people to take up the start your own business courses at their local county or city enterprise board (CEB), Cranfield explains that, while it’s not prerequisite to getting a loan, a CEB training course is an excellent foundation.

Full Conviction

While people often take on a professional mentor who will physically write the plan, Cranfield asserts that the entrepreneur has to contribute to the main elements. “It is very evident at times when you see that a busi-ness plan is written by a third party.”

In achieving a winning business plan formula, Cranfield concludes that an emerging entrepreneur must have full ownership of the business plan along with having a good perception of the marketplace and a strong grasp of their financial issues.

Interviewee: John Cranfield is Chief Executive, First Step Microfinance. For more information email info@first-step.ie or call (01) 2600988.

THRIVING IN BUSINESS

Little Apples Ann and Seamus Fay own Little Apples, a crèche based in Swords, Dublin, which won First Step's 'Established Award' in 2005. Since starting out in 2004, the crèche now has 100 children on its books and employs 18 people. Why did you start? After spending the last thirteen years bringing up our own four children we decided to combine our business dream with our love for children. How did you start? The first step was to market research the childcare sector and then to meet with all the relevant bodies. Armed with our business plan we were able to look for finance to support our project. First Step was the essential link to finally launch our business. What are your hopes and aspirations for growing? To maintain a very high standard of childcare at Little Apples, to be financially secure and maybe open up another Little Apples. What does success mean to you? Success is combining a happy family with a thriving business giving each 100% without compromise. What barriers to growing have you encountered? In the initial stages it is hard as you are trying to grow. A good business plan should project your first three years. What advice do you have for other start-ups? Research your market area. Always remember that your staff is your backbone.