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8 Simple Steps to a Successful Business Plan for the South African SME

There are many things to consider when starting your business! Although it might be a bit frightening to know where to begin when trying to make money out of your idea, there is help. In this article, we will show you how to put together your successful business plan for the South African SME in 8 simple steps.

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There are many things to consider when starting your business! Although it might be a bit frightening to know where to begin when trying to make money out of your idea, there is help. In this article, we will show you how to put together your successful business plan for the South African SME in 8 simple steps. 

Just as the name suggests, a business plan is a written document used by entrepreneurs and business owners when starting their new venture to plan their business from launch to growth. In addition to serving as an actual plan to guide the activities of the business, a business plan is crucial when you’re looking to attract potential partners and raise capital for your new venture.

In this short article, we will give you 8 essential components of any successful business plan. These components in fact form the basic structure of your plan from start to finish.

Step 1 for a Successful Business Plan: The Executive Summary

Your executive summary is one of the most important components of your plan. It acts as a business proposal and is the first thing future investors will read. As the name says, it will summarize your plan in a nutshell, telling the story of your venture and the value you intend to bring to market. Your future partners will get their essential information here. Use this section to give a summary about each component of your business plan. This includes – but is not limited to – a description of your company, your products and services, your market analysis and more. The executive summary should grab the attention of your readers! It should be engaging and short. Think of this as your highly-polished elevator pitch.

Step 2 for a Successful Business Plan: Company Description

Who are the people behind the business? What is the company all about? This is one of the first things future investors want to know is who and what your company is.

Begin this section stating the name of your business and add a brief statement about the the founders of your company.

Example: The directors of Awesomeness (PTY) Ltd come from a diverse background, including finance, marketing, operations and logistics. They bring to the table a combined 30 years of experience in leadership roles. They are young, forward-thinking professionals with a deep commitment to delivering quality products and service.

Continue this section with a brief background story on the people who started the business and how the business came to exist. Here you may include details like your starting year and location as well as the company’s vision and mission statements. You may also include a brief summary on the company’s products or services. You do not need to be very detailed here with regards to products and services; that information will be presented in the next section: Products and Services.

Discuss development stages of your company, as well as past accolades and achievements. You will want to have a competitive advantage that can help your business stand out and succeed. This might be teaming up with other experts in your respective industry or offering any type of specialized service or product.

You may also include a plan to grow your business. Your investors and future partners will want to know what your future plans are. It will be important to indicate what your plan of action is to achieve your business goals. Having your goals set out with a timeline, such as quarters or years, shows that you have deadlines for your growth.

Step 3 for a Successful Business Plan: Products and Services

This is where you can go in-depth about what services or products you will offer. You will need to provide detailed descriptions and predict any questions that might arise from someone without any knowledge on the related industry.

If you are still at work on your idea, you should include a proof of concept and make sure to mention the current stage of development of your product or service. Be sure to include any technical diagrams, product images and other relevant visuals to explain the product life cycle.

You may end this section by indicating what your pricing structure will be. Include details about the cost of materials, labour, the price of your service or product, as well as the profit you will make on each unit sold.

Step 4 for a Successful Business Plan: Market Analysis

Your market analysis is one of the more extensive sections of your business plan. Here is where you will need to conduct market research, make conclusions and state the related findings on the following points:

Background on the Industry: Give a background of the industry your company will operate in. To help you formulate this portion, you can think of answers to question such as: “what the current status of the industry?” and “what is the expected change?”. You may want to discuss the key business players and their offerings.

Competitor Analysis: Analyse and make a list of your top three to five competitors and how you plan to compete with them. This is where you will think about and write down the Strength, Weaknesses, Opportunities and Threats that each of your competitors pose. This is referred to as a SWOT analysis, which helps you figure out your place in the market you want to enter and the specific value you will bring.

Barriers to Entry: this fancy term asks you to explain what complications a newcomer will face when attempting to enter the industry. For instance, is the startup cost high? What specific equipment is needed? What are the patent requirements? These are all of the initial challenges that need to be overcome before you can launch and run your business successfully. Discussing this shows your investors or funders that you have really thought about the potential of the business to succeed.

Target market: Give details about your target market. Who are your customers going to be? Explain exactly what the expected customer base looks like within your industry, by using your markets demographics – age, occupation or gender. You may include the buyer profiles (personas) to help you fully communicate the needs and wants of your ideal customer.

Assess your business: by looking at the above-mentioned areas, you can now think deeply about how each area applies to your business. How will you reach your target customer? What advantage does your business have? What sets you apart from your competition? What can you do better than your competition? Your accurate and realistic answers to these questions will help clarify the strength and viability of your business idea, while also giving you the opportunity to cover any gaps in your strategy.

Step 5 for a Successful Business Plan: Marketing and Operation Plans

This section of your business plan is where you will give a detailed explanation on how our business idea will translate into the real world. How will your business idea actually translate into selling and delivering your products or services to your customers? How will your market your products and services?

Think of this part of your business plan as a quick brief of your marketing plan. Aim to explain your intended advertising and promotional strategies, along with the budget for marketing. This includes but is not limited to your brand identity (logo, colors, visual styles) and a professional website to display, access and sell your product or service. You will also need to carefully select the right social media channels for your audience.

You will need to be very specific and detailed about the operations of your business and how you intend to fulfill those orders or manage bookings. You will need to explain the labour, supplies, equipment and facility requirements necessary to fulfill the business you generate from your marketing. Basically, this section outlines how your business will operate day to day.

Step 6 for a Successful Business Plan: Organisation and Management

Let your reader in on the structure of your business and who will be the people that make the business what it is. This is the place to talk more about the founders, the executive team and any other stakeholders who will influence the organization and its management.

If you are a startup business with a small team, write about the role of each member of the team, defining the function they will take in terms of management. You may want to present a complete organigram (fancy word for organizational structure). You will need to show what your overall team will look like, even if all these people have not yet been hired! Be sure to show other types of stakeholders include your board of directors and advisors, shareholders, heads of department and any other team members. When creating the visual layout of your organization (organigram), describe the roles and responsibilities if the key players in your illustration.

Step 7 for a Successful Business Plan: Financial Projections

Money talks! The purpose of a business is to return value to its shareholders – to make money for them. And as the saying goes, it takes money to make money. Therefore, it is a basic requirement that you know how you will sustain the business financially. In the Financial Projections section, you can address and answer questions such as:

  • How much will you need to invest at first and where will the money come from?
  • How much funding are you requesting from investors?
  • How long until you’ll start earning a profit?
  • How much profit do you expect to earn in the next year? Over 3 years? Over 5 years?
 

Projections are a way to predict future business success, or to visualize what you believe the growth path your business will take over a certain period of time. This is not a guessing game! You will need to think about your sales and profits, taking into consideration all other factors such as costs. This section shows how you plan to manage your finances through budgeting and keeping track of your income and expenses. This part can be a bit confusing, so it’s worth talking to a qualified accountant or consultant so that your projections are done right.

Step 8 for a Successful Business Plan: Appendices

In the eighth and final section of your business plan, you mention any additional information that will help your reader to understand the full picture of the company. If you referenced any visuals, research links and other resources in your business plan, you will want to include the supporting details here.

You may include any licenses, trademarks, patents, contracts, articles of incorporation, business insurance, appraisals and any other relevant documentation.

Conclusion

The process of writing a successful business plan requires time, patience and focus. You will need to be willing to carry out the proper research and think through all the aspects of the business you are starting. Essentially, the business must exist in your mind and on paper before it can be experienced in the real world! When you need help with writing your business, you can reach out to us at Kettle Consulting. Our consultants have the expertise and experience to help put together a success business plan that will serve you well into the future. 

You may call us on 011 025 1446 or email us on info@kettleconsulting.co.za

Insight by:

The Information Desk @

Kettle Consulting (PTY) Ltd

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