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Thread: Knockout Business plan

  1. #1
    Email problem Dastan Kieton's Avatar
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    Lightbulb Knockout Business plan

    Business plans are essential to the success of your small business. Business plans are not only relevant for a small business looking for funding but will give you an understanding of the direction your small business is heading in and difficulties your small business may face. However if you are looking for funding as a small business your business plan will make or break you. When deciding to fund your small business it is at the discretion of someone who is different to you and may not see the vision you have for your small business. There is however a way to ensure your business plan is so comprehensive and covers all aspects that will ensure your small business will be approved for funding.

    It is important to focus on the following items when writing your business plan:

    Differentiate your small business
    The business plan for your small business should show how your small business is different to its competitors and what differentiates it. You should approach fulfilling the needs of your customers in an innovative manner.

    Compare your small business
    It is important to show that you have a good understanding who your competitors are and what they offer and showing how your small business will approach things differently to your competitors.

    Layout of your small business plan
    You do not have the opportunity to explain or present your business plan and for many writing may not be your strength. There are some simple tips to follow when creating the layout for your business plan. The layout should be clear, easy to ready and accessible, apply this to the size, colour and font of your business plan. Make use of headers, subheadings, bullet points, numbering, paragraphs and bold text to separate information. Also avoid ambiguity and ensure you explain all business concepts clearly and clarify all concepts. Lastly check your business plan for spelling errors as this can imply neglect lack of attention to details and impact negatively of the perception of your small business.

    Your personal skills
    Adding why you will be a successful entrepreneur gives a good indication of whether you are fully prepared to be an entrepreneur and its your time to shine. Mention skills you have and how these will be applicable in your small business, previous career achievements. Remember to apply your skills and capabilities to how you will create a successful small business.

    Getting sales
    It is important to have a comprehensive business process model for your small business that shows all channels how the sale will take place. You must include targets, these should be realistic.

    Marketing plan
    Marketing activities should be specific and tasks should be categorized as well as what marketing tool your small business will be using to drive sales. Include branding in this section of your small business plan

    Financial plan
    Ensure your financial plan is specific and based on accurate figures and not broad estimates. Get experts to look over your small business financial plan to ensure the have be complied correctly.

    It is important to know the particulars on your business plan and be aware of all elements. Creating a business plan for your small business should not be seen as a hassle or administrative task but rather a way that will assist you in gaining as much knowledge as possible that will assist your small business in being successful.

  2. Thank given for this post:

    SilverNodashi (23-Oct-12), Vanash Naick (23-Oct-12)

  3. #2
    Diamond Member adrianh's Avatar
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    This all very interesting but as far as I am concerned the most important part of a business plan is the numbers, anything else can be fixed. If you can clearly show that you understand your numbers, that you will make a profit and that the investor stands to make money then the rest is mostly fluff.

    An investor doesn't want to wade through 10 pages of drivel, he wants to see a sound financial plan.

    At the end of the day it doesn't matter who you are, what your dreams are or what you sell, if the numbers don't work then you won't get backing, you don't believe me, speak to any investor or banker.....its all in the numbers.
    How easily someone is offended is directly proportional to how stupid they are.
    ~GS Elevator

  4. #3
    Diamond Member Blurock's Avatar
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    When drawing up a business plan always start with the numbers first. Some people write a novel and then expect the investor to read it. The financier is not interested in where you were born or what qualifications you have. As Adrian says, the numbers are the most important. The rest you can make up.
    Only chickens achieve something while sitting still...

  5. #4
    Bronze Member Miro Bagrov's Avatar
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    Numbers are also very problematic in business planning.

    My personal approach to business planning involves estimating numbers which I then keep to myself (as they are untried).
    Then I do a test run of some sort - a simulation. Actually obtain a small product sample, hire actual sales-temps, and do an actual sale event somewhere. This stage helps me a lot - because if it fails, then Ive lost maybe R2000-R4000. But if I proceeded and got finance I could have lost R10000 - R100000.
    I use the numbers that come back after a test run and I use those for making a business plan, now taking into account also the costs of increasing the scale of the operation.

    Problem is that some operations can't be tested before hand - in those cases we can source numbers from a similar business/operation. Public companies disclose their information and we can take some relationships from them.
    For example it's not useful if we know that they have R555 000 000 sales p.a, instead what is more useful is getting their Gross Profit/Net Profit RATIO as a %, then we can multiply across our costs/incomes by that ratio to estimate how much Cost of Sales or Sales will be. Another way is the following - we know (for instance) that 3% of the population use Insurance policy X and that the competition has at least 80-90% of that market. To capture the rest we need a price that is 40% lower than that competition. Then continue from there to check feasibility. I attach a assumptions page on the back of any estimate because the adjustor can always refer to where I got my numbers from - I cite national statistics, current market rates, market rates in future, %'s, SARB's inflation rate, etc.

    The third way is to actually test the market before buying the product sample - example - get the phone book an call 100 people and ask them are they interested in product Y, at Price X. The statistics show if there is interest at all. Also consider that only a % of all interest gets converted into sales within 30 days, 60 days. So it's not a certain way at all. It's like "teasing" people to see if they care.

    I ultimately prefer to understate expected incomes than overstate - because we can see that the over-performance is welcomed but under-performance means heads get lopped off in the land of finance.
    When all this is done, you have a very good idea of the business's feasibility and just but it all in writing, the Market Testing goes to marketing section with a summary of results, and the financial calcs go to the finance section in the form of income statement.

    So when stuck:
    1. Turn to testing
    2. When that fails, turn to calling
    3. When that fails, turn to industry averages
    4. When that fails turn to testing again
    Until all data is collected.

  6. Thanks given for this post:

    Dave A (13-Nov-12)

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