There are so many failed businesses across the globe and most of them are due to bad planning. Having a good plan in anything you do, will result in a positive outcome, however, a bad or no plan at all may result in negative outcomes.
You don’t want your business to be another statistic or you as an entrepreneur. There are thousands of businesses in South Africa that started off without plans, some of which failed and some of which by luck make it through.
Usually when people from townships or villages start a Spaza shop or a corner store, they never really consider a business plan. Learn how to create a business plan in easy steps.
What is a Business Plan
A business plan is a formal written document that layout in detail business goals, business details, including the financial plan of your business and the funding required among a vast of information provided on a business plan.
It includes the Marketing plan, Strategies, Market and Opportunity analysis – it’s more of a guide,
THE BUSINESS PLAN
There are a number of important aspects of a business plan that cannot be overlooked. Your plan should consist of your business details, the executive, company description, analysis of the market, gap of the market as in opportunity, strategy, a team, marketing plan, financial plan and funding required to start a business.
- You will need to point out a Business Name or Trading name if not both. According to CIPC, not every business necessarily need to be registered as there may not be tax benefits, however, if you are looking to have sponsors, investors, etc. you have to legally register your entity
- Point out the Address of your Business, including a Postal Address
- You must include Business Contact number, be it a cell number or a landline
- It is best to mention the occupancy status if you are an occupant/owner or a tenant
- If you are the owner of the builder, mention the new equity and date in premises
- Note down the contact person name, position, landline/cell, email, etc.
- You need to summarize all the most important aspects of the business
- Explain the nature or rather the Business Concept. What sort of activities will be done in your company to keep the business going and growing?
- Note down how old the business is. The company’s age
- What’s your current turnover, and what have you got under your sleeves to achieve the projected turnover, and how much in percentage is it? These are important questions when you have goals for your business
- Legal entity type (It can be a private or a non-profit-organization) and registration number, provided by CIPC upon company registration.
- Layout the owners or rather ownership (include name, age, gender, ownership, financial contribution, and ID number)
- Vision and Mission Statement are important to highlight the current and future plans of the business
- SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats ) is important to be able to challenge your business to minimize risks from being liquidated. (This is done to identify strengths, weaknesses, opportunities, and threats)
- Describe the business category or rather industry description
- If applicable, note down debtors (days, credit terms, customers on credit, credit sales and debt provision) and creditors (This will depend on the nature of your business)
- Analyze your competition and include company insurance if you have one, and mention the name, risks breakdown and premiums.
The Opportunity, Industry & Market
There are two types of essential analysis that you must do intensively – this is one of the most important parts of business planning, understanding the market and tackling issues that come with it.
- Opportunity Analysis
When you are selling a product, you need to have the main focus, and see to it that you find the gap in the market. Find out what caused the gap, and how wide is the gap, as well as factors, contributed to widening the gap. How was this gap identified and how will you fill the gap as a business.
- Market Analysis
In this case, you will look at the size of the market and the rate of its growth. Take note of the percentage share of the market you’ll get, provided if you’ll be a major factor in the market. You should take into account the major trends in the target market in all forms.
- Just like when you do forex trading, you need a strategy to be able to trade professionally and consistently. Yes, in business – you need a strategy.
- Is your business focused on the broad mass market or a specific niche?
- Figuring out how the business is going to succeed in the business market as well as creating valuable and unique positions and involving a different set of activities
- Find what’s unique about your business, how is it different from your competition
- Note number of employees
- Management team
- CV founders and management
- You need to know what is important, or rather why are your services valuable to your customers
- Describe in detail, the focus and target market of the business.
- How are you to render your services and how customers see your product or service
- Where will the product or service be sold as well as pricing strategy
- How will the product or service be delivered to the customer
- How are you planning to market your product or service, come with the promotion strategy including advertising, promotions, etc?
- You will have to figure out the working capital as well as the start-up cost required
- Set up a 12-month profit and loss projection as well as a three-year profit and loss projection
- 12-month cash-flow projection and a three-year cash-flow projection
- A projected balance sheet at start-up and at the end of years one to three
- A break-even calculation
- Asset register
- Gross profit calculation
- Reasons needed
- Ownership contributions
- Monies owed to creditors
- Suretyship agreements
- Asset financing break-down
Whenever you want to start a business, think of a business plan – by so doing, you will be able to pick up some of the factors or aspects of the business that you may have mistakenly forgotten. Starting a business is not easy, the paper is hard, and the actual work is even harder.
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