Information on introduction to technopreneurship.

1. © 2019 Juta and Company (Pty) Ltd 1
Chapter 5: The business plan
• The purpose and principles of the business plan
• The users of the business plan
• The business model
• The business plan
• Technological assistance in drafting the business plan
• The structure of the business plan
• Guidelines for writing a business plan
• Writing a business plan
Entrepreneurship and how to establish your own business 6e

2. © 2019 Juta and Company (Pty) Ltd 2
Learning outcomes
• After you have studied this chapter, you should
be able to:
– Understand the purpose and principles of a
business plan
– Identify and describe the users of a business plan
– Explain the business model
– Explain the business plan
Entrepreneurship and how to establish your own business 6e

3. © 2019 Juta and Company (Pty) Ltd 3
Learning outcomes (cont.)
– Discuss the technological assistance in drafting a
business plan
– Explain the structure of the business plan
– Indicate guidelines for writing a business plan
– Write a business plan
Entrepreneurship and how to establish your own business 6e

4. © 2019 Juta and Company (Pty) Ltd 4
Introduction
• The business plan plays a pivotal role in the
entrepreneurial process
• The business plan is a necessity for:
- Start up capital
- Government grant
- Tender on government contract
• Your business plan is the platform on which
your business will be judged
Entrepreneurship and how to establish your own business 6e

5. © 2019 Juta and Company (Pty) Ltd 5
The purpose and principles of the
business plan
• Primary objective of the business plan is to
develop a blue print to define your business
• The plan is:
– A meticulous route map to entrepreneurial success
– A detailed written document stipulating how you will
address all the business activities to exploit the
identified business opportunity
– A planning document that explores and indicates the
route to follow into the future
– a document that you, the entrepreneur, should
formulate by yourself.
Entrepreneurship and how to establish your own business 6e

6. © 2019 Juta and Company (Pty) Ltd 6
The purpose and principles of the
business plan (cont.)
• A blueprint for the business:
– A business plan explains exactly what the
opportunity is to be pursued and, coupled with
that, how the entrepreneur will exploit the
opportunity
– The road map from pre-start to start-up to
eventual growth is displayed in a business plan
– Similar to an architects plan
Entrepreneurship and how to establish your own business 6e

7. © 2019 Juta and Company (Pty) Ltd 7
The purpose and principles of the
business plan (cont.)
• A flexible document
– The business plan is a dynamic planning instrument that
should be updated regularly to take account of changes in
the business environment
– The digital world has changed the way we conduct
business dramatically
– Continuous research on the internet should be part of the
process of adaption and flexible changes
Entrepreneurship and how to establish your own business 6e

8. © 2019 Juta and Company (Pty) Ltd 8
The purpose and principles of the
business plan (cont.)
• A plan developed by the entrepreneur
– The only way to understand your business is to
develop your own business plan as this will ensure
you end up with a unique plan that suits your
business
– A business plan also serves as a management
instrument and guideline; the entrepreneur is
initially also the manager and requires an
operational framework in this regard
Entrepreneurship and how to establish your own business 6e

9. © 2019 Juta and Company (Pty) Ltd 9
Entrepreneurship and how to establish your own business 6e

10. © 2019 Juta and Company (Pty) Ltd 10
The users of the business plan
• Secondary objective of the business plan is to
acquire finance from a financier
• Also serve as a marketing document to
present to potential investors or venture
capitalists
• Some entrepreneurs use the business plan to
motivate their employees
Entrepreneurship and how to establish your own business 6e

11. © 2019 Juta and Company (Pty) Ltd 11
Entrepreneurship and how to establish your own business 6e

12. © 2019 Juta and Company (Pty) Ltd 12
The business model
• Value creation
– The value proposition
– Target customer
– Channels
– Customer service
– Income model
Entrepreneurship and how to establish your own business 6e

13. © 2019 Juta and Company (Pty) Ltd 13
The business model (cont.)
• Efficiency
– External parties
– Operational activities
– Resources
– Costing
Entrepreneurship and how to establish your own business 6e

14. © 2019 Juta and Company (Pty) Ltd 14
The business plan
• The business plan - a planning instrument
• that describes the entrepreneurial process
and how the entrepreneur will implement it
• Compiled after the model
• The plan is not the nucleus of success: it is a
map, not the road
Entrepreneurship and how to establish your own business 6e

15. © 2019 Juta and Company (Pty) Ltd 15
Entrepreneurship and how to establish your own business 6e

16. © 2019 Juta and Company (Pty) Ltd 16
Entrepreneurship and how to establish your own business 6e

17. © 2019 Juta and Company (Pty) Ltd 17
The business plan (cont.)
• A business plan is a working tool for:
- Analysis - of each variable of the business
- Synthesis (integration) - of information to make
business sense
- Communication - tool for all the users
- Action - implementation of the business plan
• Merely a planning instrument and not the
nucleus of success
Entrepreneurship and how to establish your own business 6e

18. © 2019 Juta and Company (Pty) Ltd 18
The structure of the business plan
• The business plan should be structured so that
it meets the needs of your industry and of the
potential reader/user
• Adapt the structure and style to the needs of
the reader and remember that you will be the
first reader and user
Entrepreneurship and how to establish your own business 6e

19. © 2019 Juta and Company (Pty) Ltd 19
The structure of the business
plan (cont.)
• It is of importance to note the different
structures contained in the textbook
– See pages 122 to 126
– Structure 1: The comprehensive structure
– Structure 2: The general structure
– Structure 3: An alternative structure
Entrepreneurship and how to establish your own business 6e

20. © 2019 Juta and Company (Pty) Ltd 20
Guidelines for writing the business
plan
• Guidelines to help with writing the actual plan:
- Keep the plan short
- Organise and package the plan appropriately
- Orient the plan towards the future
- Avoid exaggeration
- Highlight critical risks
- Give evidence of an effective entrepreneurial team
- Do not over diversify
- Identify the target market
- Keep the plan written in the third person
- Capture the readers interest
Entrepreneurship and how to establish your own business 6e

21. © 2019 Juta and Company (Pty) Ltd 21
Writing a business plan
• The following should be included in the business plan:
- Cover page
- Confidentiality agreement
- Table of contents
- Executive summary
- Business description
- Marketing plan
- Location
- Management
- Financial plan
- Critical Risks
- Appendices
Entrepreneurship and how to establish your own business 6e

22. © 2019 Juta and Company (Pty) Ltd 22
Summary
• A business plan is primarily a planning
instrument and a blueprint of the business
venture, whether new or old
• The structure of the plan should be adjusted
to the nature of the business and its purpose
Entrepreneurship and how to establish your own business 6e