Small Business South Africa - Business Plans for Small Business South Africa
THE BUSINESS PLAN FOR SMALL BUSINESS


Are you failing to plan, or planning to fail?


A business plan is crucial to the success of any business. This plan is simply a step-by-step exercise in forward thinking. A sound business plan should contain crucial budgets and cash flow forecasts that will show how much profit you can expect your business to make, how much finance you will need and the risk involved. This helps to demonstrate your business idea, how you want to implement it and the long-term viability thereof.

The importance of a comprehensive business plan that is well thought-out cannot be overemphasised. Much hinges on it: outside funding, credit from suppliers, management of your operation and finances, promotion and marketing of your business and achievement of your goals and objectives.

Surprisingly, many entrepreneurs drag their feet when it comes to preparing a written business plan. They argue that they do not have enough time, or that the market changes too fast for a business plan to be useful. But just as a builder would not begin construction without a blueprint, eager business owners should not rush into new ventures without a proper business plan. A good business plan is your roadmap to success.


Before you begin writing your business plan


Before you begin writing your business plan, consider four core questions:

1. What service or product does your business provide and what need does it fill?

2. Who are the potential customers for your product or service and why would they purchase it from you?

3. How will you reach these potential customers?

4. Where will you get the financial resources to start your business?

Your business plan should do the following:                            Top

A. Identify the target market by defining your audience; the size and scope of the market, with details about competitors, your pricing and marketing strategies.

B. Explain the benefits of your product or service, how it is unique and its appeal to customers. Include information about your company’s location and how that location will benefit your business.

C. Show that you have effective management, with people who not only have the necessary business skills, but who also work effectively together.

D. Focus on the future by attempting to develop forecasts of relevantnt business trends over the next three to five years. At the same time, do not be too optimistic in estimating sales potential. Allow for the best, worst and most likely scenarios.

E. Highlight current and potential problems and show how they will be overcome. This helps you avoid problems and boosts your credibility with investors and lenders.

Develop a financial plan that includes a capital equipment list, a balance sheet, income statements or projections for three years, cash flow statements, break-even analyses and loan applications.

10 reasons why small businesses fail
 
         Inadequate business planning

         Over-investment in fixed assets

         Insufficient capital

         Lack of management experience

         Poor location

         Poor inventory and cash flow management

         Poor credit arrangements

         Personal use of business funds

         Competition or lack of market knowledge

         Low sales/not pricing properly



Writing Your Business Plan

To consider financing, financial institutions requires a comprehensive and well-motivated business plan from which a thorough understanding of your existing or proposed business, your own goals and objectives and your financing requirements can be obtained.

Click Here for guidelines on writing a business plan.

Business South Africa - Business plans for the South African Entrepreneur.  Business opportunities, business solutions and business links.
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