By Dickson ASSAN, CA, MSc, BSc
The high failure rate of Small and Medium-sized Enterprises (SMEs) in Ghana poses a significant threat to the country’s economic development. Approximately 70% of SMEs fail within their first five years (Asare & Yawson, 2022). This is alarming, considering SMEs account for nearly 80% of total employment and contribute over 70% to Ghana’s GDP (Ghana National Policy for MSMEs, 2023).
Among the many causes of this trend, two stand out consistently: poor managerial skills and lack of proper business planning (Agyapong, 2021; Ocloo et al., 2021).
In this article, I explore the importance of writing an effective business plan as a practical strategy for reversing the high failure rate of SMEs in Ghana. Whether you’re seeking funding, entering a new market, or refining your growth strategy, a business plan provides the structure, clarity, and confidence to navigate the uncertainties of entrepreneurship.
A well-prepared business plan not only helps entrepreneurs secure funding but also serves as a strategic guide for day-to-day operations, risk management, and long-term growth. It provides clarity on business goals, resource allocation, market positioning, and financial sustainability, critical elements that many SMEs in Ghana currently lack.
The Business Plan Framework
Your business plan should address the following components:
- Executive Summary
This one-page section is often the only part read by investors or lenders, so make it count. Open with a compelling one-sentence description of your business idea.
Then include:
- Your target market and the problem you’re solving
- Unique benefits of your product or service
- Why you’re well-positioned to succeed (team, innovation, timing)
- Current status of the business
- Financial needs and what the funds will be used for
- Risk assessment and potential return on investment
Tip: Write this section last even though it comes first.
- Brief History of the Business
This section answers: Where are we now, and what have we achieved so far?
Include:
- Founding story: When and why the business was started
- Mission: The reason the business exists—its core purpose
- Vision: What the business aspires to become in the future
- Milestones: Prototypes developed, contracts signed, capital raised, customer base reached, etc.
- Legal Status: Sole proprietorship, partnership, or limited liability company
- Location: Physical location of operations
- Company Address: Include digital address, postal address, and GPS coordinates if possible.
- The Product or Service
Give a precise, jargon-free description:
- What are you selling, and how is it used?
- What makes it better, faster, or cheaper than existing alternatives?
- Can the idea be easily copied, or does it have competitive protection?
- What are the technical challenges and how will you address them?
Be honest about potential weaknesses. Transparency builds credibility.
- Market and Competitors
Market Analysis
- Total market size and growth trends (national, regional, or local)
- Your specific target market segment
- Customer behavior and decision-making patterns
Competitor Analysis
- Who else is offering similar solutions?
- How does your offering compare in terms of price, quality, brand, and availability?
- What are their strengths and weaknesses?
- How will competitors respond to your entry?
Tip: Consider informal competition, which is strong in many local industries.
- Marketing Strategy
Describe how you will reach and retain customers.
Pricing:
- What is your price point?
- Is it based on cost, value, or competitor pricing?
Promotion:
- Use affordable channels—social media, WhatsApp broadcasts, community radio, flyers
- Consider partnerships or word-of-mouth as key drivers
Distribution:
- Will you sell online, through shops, agents, or directly?
- What are your logistics or delivery plans?
- Production and Operations
Focus on key operational issues:
- Raw materials: Are they locally sourced or imported?
- Equipment: Buy or lease?
- Staff: How many, and what skills are needed?
- Premises: Owned, rented, or home-based?
- Quality control: How do you maintain consistency?
Note: Avoid technical overload—keep it simple but realistic.
- Management and Objectives
Investors back people, not just ideas.
Include:
- Who owns and runs the business?
- Team experience and skill mix
- Gaps in the team and how you plan to fill them
- Future staffing needs and plans
Also, define your business goals:
- What do you want to achieve in 1, 3, and 5 years?
- How will you measure success (sales targets, customer reach, etc.)?
- Financial Plan
Summarise:
- Sales and revenue projections
- Cost structure (fixed and variable costs)
- Breakeven analysis
- Funding needs and what the money will be used for
- Assumptions behind your numbers
Attach a financial appendix with:
- Profit & Loss statement
- Cash flow forecast
- Balance sheet
Advice: Use realistic numbers. Overpromising can kill investor confidence.
- Risk, Return and Exit Strategy
Investors want to know:
- What could go wrong (economic instability, supply chain risks, customer adoption)?
- How will you manage those risks?
- What’s the expected return on investment?
- How can they exit (e.g., dividend, share buyback, sale of business)?
- Appendix
Supporting documents are critical to verifying claims made in your business plan. Attach:
- Land title documents or lease agreements
- Business registration certificates
- Signed MOUs or contracts with suppliers/clients
- Pictures of existing structures, outlets, or manufacturing units
- Resumes/CVs of key team members
- Financial statements (if already in operation)
- Any permits or regulatory approvals obtained
Ensure the appendix is organized and referenced within the main body of the plan.
Conclusion
In a volatile business environment like Ghana’s, an effective business plan is a game-changer. It forces entrepreneurs to think critically, plan proactively, and pitch persuasively. For SMEs, it’s not about having a glossy document but having a living guide to help you build, grow, and sustain a business with purpose and profit.
About the Author
Dickson Assan, CA, MSc, BSc (First Class) is a Chartered Accountant, career coach, and business strategist with experience supporting SMEs and startups in Ghana. He is passionate about helping young entrepreneurs transform ideas into profitable ventures through strategic financial planning and mentoring.
