The Business Plan

The Business Plan

by Andrew Patricio

A business plan is still the best method ever developed to test the viability of your business idea. Whether you are in business already or intend starting a new venture, make sure that you have a well thought out and constructed business plan. A business plan will not guarantee your success but it will improve your chances of succeeding. You may even decide not to go into business once you have completed your business plan.

What is a business plan?

It is a document prepared to show the viability of your business. A business plan is the blueprint that you will use to develop your business idea.

A business plan must include:

· What you intend doing?
· How you intend doing it?
· When you intend doing it?
· Where you intend doing it?
· What makes you believe that your business is viable?
· A structured guideline to achieving your goals.

Why is a Business Plan important?

· It forces you to arrange your thoughts in logical order.
· It forces you to simulate reality and anticipate pitfalls before they occur.
· It will be used as your working action plan.
· It is an essential aid when applying for finance.
· It can eliminate potential flaws in your business.
· It is an essential decision-making tool.
· It can assist you when trying to obtain credit terms from suppliers.

A Business Plan - the basics

It needs to be:

· Professional
· Concise
· Comprehensive
· Logical
· Simple and easy to read
· Based on facts or evidence

Step 1: Prepare a professional-looking title page and contents page

Include:

· The business name
· The addresses, telephone numbers, fax numbers, email address and WebPages.
· The business logo.
· A list of the owners their contact details and titles.
· The date the business plan was printed.
· The name of the person that prepared the business plan with contact details
· A clear contents page.

Step 2: Prepare an Executive Summary

The summary should include:

· A description of the service or product you provide or plan to provide.

· What makes you different to other similar businesses and why you believe your business is viable?

· If it is a business in operation include some history and information on its past performance

· List your short, medium and long-term goals and objectives. You can determine how long is short, medium and long term, for different businesses in different stages of growth the time-span could be different. If you think short-term is 6 months or 12 months say so.

Include a summary of:

· Your marketing plan.
· Your projected sales for the first few years (on a graph if possible).
· Your expected gross profit.
· Other financial information that will interest the reader.

Step 3: Company Information and Legalities

· Type of business ownership selected (if you are starting a new business).

· You could start off as a sole proprietorship and change later into a CC or company. If you are growing your business, include your future plans. If you intend listing on the JSE (Johannesburg Stock Exchange) or being bought out by your competitors, maybe you should register a company.

· What are the legal requirements, if any?

Step 4: List products and / or services to be offered

· Include an outline of your products and or services.

· Include photographs or drawings of the products if possible.

· How is your product or service different to what is currently available?

· Include a technical outline of machinery that you will need to purchase. Include brochures and quotes with a picture of the equipment and any technical details that may be required.

Step 5: Outline your proposed marketing plan

· Include copies of market research done, including statistics and questionnaires distributed.

· Include some background information on your industry. What trends are taking place and how will this affect your business?

· Describe your specific target market.

· What is your projected turnover for the next 12 months?

· A brief description of your competitors' marketing strategy.

· A description of your sales and promotion strategies. How are you going to market your products and services? Insure that you include a detailed plan of what you will do when and how much it will cost.

· Include advertising material, copies of advertisements and costs to be incurred.

· Include a map showing proximity to main competitors, main transport routes, commuter routes, traffic flow etc.

· A SWOT analysis of yourself and your business: Strengths, Weaknesses, Opportunities and Threats. Try and be as honest as possible.

· A description of your competitors, their target markets, position in the market and their products. Do a SWOT analysis of your main competitors.

Step 6: Include information on your staff and management team

· How many staff do you intend employing?

· Show your organizational structure.

· Include a job description for each member of staff.

· Include the salaries and packages you will offer key staff, if you have this information available.

· Include a CV of yourself and your key staff showing your ability to develop the business, if specialized skills are required to make the business a success.

· Remember don't overdo it with the CV one or two pages will be sufficient and exclude the certificates.

· If training is required. What and where will training take place?

Step 7: Outline your financial plan and strategy

· Detail your purchasing strategy. Who will you purchase your products and services from?
· Show how you will cost of each of your products and services.
· What is your price-setting policy?
· What gross profit will you achieve on each product or department.
· What record keeping system will you be using?
· Prepare a projected Income Statement for the first few years.
· Calculate your projected break-even point monthly and annually.
· Prepare a projected cash flow forecast.
· Prepare a projected balance sheet.
· Look at different scenarios - best case, average case and worst case.
· What financing required, if any? (Start-up requirements if it is a new business).
· What security, do you or the business have available?

Step 8: Outline your operating Plan

· A description of your location its advantages and disadvantages relation to labour force, proximity to customers etc.

· What premises will be required?

· Include a layout of the premises and machinery.

· If in manufacture how will this be done?

Step 9: Technology

· What computer systems will you use?
· What software will you require?
· What are your plans for the Internet?

Include:

· Quotes, floor layouts and plans, newspaper or magazine articles of interest, a one page summary of lease agreements, product photographs and any other information that you think that could be useful to add value to the business plan.

WebPages

· www.bplans.com
· www.cbsc.org/ibp

Back to www.bizland.co.za

·	A description of the service or product you provide or plan to provide.
·	What makes you different to other similar businesses and why you believe your business is viable?
·	If it is a business in operation include some history and information on its past performance
·	List your short, medium and long-term goals and objectives. You can determine how long is short, medium and long term, for different businesses in different stages of growth the time-span could be different. If you think short-term is 6 months or 12 months say so.

·	Type of business ownership selected (if you are starting a new business).
·	You could start off as a sole proprietorship and change later into a CC or company. If you are growing your business, include your future plans. If you intend listing on the JSE (Johannesburg Stock Exchange) or being bought out by your competitors, maybe you should register a company.
·	What are the legal requirements, if any?

·	Include an outline of your products and or services.
·	Include photographs or drawings of the products if possible.
·	How is your product or service different to what is currently available?
·	Include a technical outline of machinery that you will need to purchase. Include brochures and quotes with a picture of the equipment and any technical details that may be required.

·	Include copies of market research done, including statistics and questionnaires distributed.
·	Include some background information on your industry. What trends are taking place and how will this affect your business?
·	Describe your specific target market.
·	What is your projected turnover for the next 12 months?
·	A brief description of your competitors' marketing strategy.
·	A description of your sales and promotion strategies. How are you going to market your products and services? Insure that you include a detailed plan of what you will do when and how much it will cost.
·	Include advertising material, copies of advertisements and costs to be incurred.
·	Include a map showing proximity to main competitors, main transport routes, commuter routes, traffic flow etc.
·	A SWOT analysis of yourself and your business: Strengths, Weaknesses, Opportunities and Threats. Try and be as honest as possible.
·	A description of your competitors, their target markets, position in the market and their products. Do a SWOT analysis of your main competitors.

·	How many staff do you intend employing?
·	Show your organizational structure.
·	Include a job description for each member of staff.
·	Include the salaries and packages you will offer key staff, if you have this information available.
·	Include a CV of yourself and your key staff showing your ability to develop the business, if specialized skills are required to make the business a success.
·	Remember don't overdo it with the CV one or two pages will be sufficient and exclude the certificates.
·	If training is required. What and where will training take place?

·	A description of your location its advantages and disadvantages relation to labour force, proximity to customers etc.
·	What premises will be required?
·	Include a layout of the premises and machinery.
·	If in manufacture how will this be done?