Building a house starts with a blueprint. And in draughting the blueprint, the architect needs to take into account various factors, such as the suitability of ideas, the cost of materials, and the time-frame involved in construction. Planning a business is essentially the same – it involves working out the nuts and bolts of the enterprise, so that, as the entrepreneur, you know what everything is going to cost, where the money is going to come from, and how long the implementation of your plan is going to take.
A good business plan is vital in attracting investors, and in managing the business in South Africa once it is up and running. A business plan is like a tool that you use to convince others of the viability of your business idea or model. The plan should have the following parts.
* Executive summary: this is a section that gives a concise overview of the business and its nature, as well as its central product or service.
* Description of the business opportunity: More detail is provided here, including the target market (who the business is aimed at) and what opportunity for investment the business is exploiting.
*Operational description: in this section you give an in-depth analysis of how you plan to do business, providing as much detail as possible, so that others will be persuaded and will take you seriously.
*Marketing strategy: if no-one knows about your business, you will have no customers, and so you use this section to outline your plans to make the public aware of your business, and to attract customers/clients.
*Financial plan: this is essentially a projected budget plan, in which you give an outlay of the figures involved in the business – this section is a good opportunity to show that your business can work in practice, with the right level of investment.
One cannot over-emphasise the importance of having a sound business plan before you start operating. Using your plan, you can attract investors and raise capital and, what’s more, once you start trading and making South African money transfers, you can go back to the plan to measure performance and adapt to changing conditions. The plan gives you a point of departure in a volatile environment.