The document discusses starting a small business from scratch and the importance of business planning. It notes that while starting a business from scratch provides more freedom and control over decisions, about half of new small businesses fail within a few years due to issues like financial mismanagement, poor management skills, and lack of planning. An effective business plan assesses the business idea, clarifies goals and objectives, identifies opportunities and challenges, establishes required resources, and provides information for loan applications. A good business plan includes an executive summary, marketing plan, operations plan, and financial plan.

1. “Without a plan (or vision), the people perish…”

2. Starting a business from scratch
Advantages
 More control and freedom
over decisions
 Decide on business name
 Decide on location
 Decide on product mix
 No goodwill
Disadvantages
 Key decisions about
business name, location
and product mix are
already made
 About half of all new small
businesses fail within a few
years of starting up

3. Reasons new businesses fail
 Financial mismanagement
 Poor management skills
 Poor record keeping skills
 Sales and marketing problems
 Failing to get advice
 The state of the economy

4. Benefits of Business Planning
 Requires you to assess your idea carefully before
spending money
 Helps you to become better informed about your
potential market
 Helps you clarify your goals and objectives
 Assists you to identify the opportunities, challenges and
issues that may arise
 Establishes the resources you will require
 Provides relevant information to back up your loan
application

5. What should a business plan include?
 Executive summary: overview of the business, goals
and objectives, timelines, goods and services
 Marketing plan: market trends, target
market, extent of consumer demand, proposed
marketing mix (4 P’s)
 Operations plan: resources, required including
physical and human resources
 Financial plan: cost estimates, cash
flow, wages, rent