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Cbc effective business plans 20170830

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Developing an effective business plan

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Cbc effective business plans 20170830

  1. 1. An Effective Business Plan A MAP TO ENTREPRENEURIAL SUCCESS Presented by Petro Bothma Business Partners Limited
  2. 2. PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED Benjamin Franklin – one of the founding fathers of the USA said If you fail to plan, you plan to fail
  3. 3. PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED A recent study from the University of Edinburgh, revealed that entrepreneurs who write a business plan are 16% more likely to succeed. Considering it is generally reported that 9 out of 10 of start-up businesses fail within the first two years of operation in South Africa, the importance of planning and documenting your plan when starting a business cannot be overemphasized.
  4. 4. A Comprehensive Business Plan Should not be developed only when finance is required It is also: ◦ A valuable way to outline a clear route and key milestones, in other words a strategy document ◦ A guide to brief management and employees on the business’s objectives and strategy ◦ A selling tool in dealing with important relationships including your lenders, investors and banks ◦ Your roadmap to success PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED
  5. 5. A Comprehensive Business Plan Must tell a clear story of ◦ Why the business has started ◦ How the business owner will steer it to profitability and sustainability PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED
  6. 6. 7 Essential Elements ◦ Executive summary and introductory elements ◦ The business overview ◦ The management of the business – who are the entrepreneurs ◦ The market in which the business operates ◦ Sales and marketing plan/strategies ◦ Financial planning and management ◦ Development and production ◦ Additional where applicable – the legal and regulatory environment PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED
  7. 7. Executive summary and introduction ◦ A business plan should have a powerful executive summary which encapsulates the business’s strategy precisely, without waffle or exaggeration. This is the most vital part of the business plan as it will ultimately be the tool that will convince a potential financier to invest – should this be what the business owner or entrepreneur seeks. The executive summary should be written last as it entails highlights of the full document. Chances are that the potential investors have seen many business plans in their time, and may not make an effort to read further if the executive summary does not whet their appetite. ◦ Table of content ◦ Professional and well presented cover page ◦ Business name ◦ Entrepreneur’s name ◦ Logo ◦ Contact details, including physical address PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED
  8. 8. Business Overview ◦ An overview of the industry in which the business operates ◦ Research the industry and back up any observations with facts ◦ Trends, new developments that could impact your business ◦ Challenges within the industry ◦ Growth forecasts ◦ Legislation ◦ Industry players ◦ A discussion of the business or company ◦ Type of business ◦ Phase – Start-up, Expansion, Take-over, Franchise ◦ Legal format – Sole proprietorship, partnership, registered company PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED
  9. 9. Business Overview (cont’d) ◦ Description of products/services ◦ Innovative features ◦ What gives the business the edge over competitors ◦ Positioning ◦ Pricing PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED
  10. 10. Management ◦ Who is managing the business ◦ Skills and experience ◦ Key management ◦ Functions and responsibilities ◦ Future employment levels ◦ Labour relations ◦ Board of Directors (where applicable) ◦ Board of Advisors ◦ Support structures PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED
  11. 11. The Market ◦ Customers ◦ Describe the ideal customer ◦ Market size and trends ◦ Define the total market size as well as the slice of the market your business will target. Use numbers as well as trend information to make a case for a viable current market and its potential for growth ◦ Competition ◦ Estimated sales PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED
  12. 12. Sales and marketing plan/strategies ◦ Marketing Strategy (the Why) ◦ Purpose ◦ Objectives ◦ Advertising and promotion (the How) ◦ Sales strategy ◦ Method of sales PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED TIP Don't make the mistake of confusing sales with marketing. Sales focuses on how you get your products into the hands of your customers. Marketing is concerned with how you educate your potential customers about your product.
  13. 13. Financial Planning and Management ◦ Expenses and capital requirements ◦ Financial Statements and Projections ◦ Financial ratio’s ◦ Costing methodology ◦ Cost of sales and pricing policies ◦ Mark up and gross profit percentages ◦ Financial risks and mitigation PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED
  14. 14. Development and production ◦ Development status ◦ Production process ◦ Cost of development ◦ Labour requirements PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED
  15. 15. Additional ◦ Legal and regulatory environment ◦ Include ◦ details of any licenses, copyrights, trademarks and patents registered (or in the process of being registered) ◦ details of any legislation and regulations governing the industry, product and production processes ◦ proof of compliance with tax and labour legislation (VAT, PAYE, RSC, UIF, COIDA, Employment Equity Act, Skills Development Act, etc) where applicable ◦ details of duties and tariffs to which inputs or products are subject if the business is a regular importer or exporter ◦ Existing orders ◦ SWOT analysis PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED
  16. 16. Remember A business plan is a living document ◦ The business plan will essentially become a map for growth for the business, and it is therefore imperative that it not be hidden away once it has initially been completed. Instead, it must be viewed as the document that guides the business's growth and expansion and how it responds to challenges and opportunities on its route to success PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED
  17. 17. PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED Questions?
  18. 18. PETRO BOTHMA – SME TOOLKIT SA BUSINESS PARTNERS LIMITED Petro Bothma Group Enterprise Development Manager – Business Partners Limited Programme Manager – SME Toolkit South Africa enquiries@businesspartners.co.za

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