Whether you’re starting a side hustle or throwing everything you’ve got into becoming a Mzansi-preneur, writing a business plan will guide you to thinking about every aspect of your business, set goals that you can work towards, consider solutions to potential challenges you could face and prevent you from losing sight of your original vision.
Let’s face it, business (like life) is unpredictable. But there are ways to limit the number of nasty surprises – such as a business plan. Have you thought about the size of your target market, who your customer is, who your suppliers are, how many competitors you have, how you’re going to afford all of this? Have you? You need to write that stuff down.
Why do you need a business plan?
You’ve probably heard this before, but it’s worth repeating: failing to plan is planning to fail. A thorough business plan doesn’t just help you order your thoughts and plans for your business, it has other uses.
Thinking of taking a loan or applying for funding? Guess what, they want to see your business plan. It is also key if you are bringing a partner into the business, recruiting employees or considering merging businesses with another company. Showing your business plan to friends and family will prove to them how well thought-out your business venture is and help them understand what it is you are doing.
What to include in a business plan
There is no set length for a business plan, nor is there an exact structure to follow, but these sections are most commonly included, and by answering the questions below you will have a good overview of your business.
- What product or service do you provide?
- Who heads up the business?
- How many employees do you have?
- Why will your business be successful?
- What is the current status of your business?
- What type of legal entity is your company?
- What problem does your business solve?
- What is your competitive advantage?
- What expertise and experience do you have in the business?
- What is the business opportunity that you have identified?
- How big is the target market?
- Who is your ideal customer?
- What are the trends in the industry?
- Who are the competitors and what do they do?
- What are you selling or doing?
- What does the product lifecycle look like?
- How much will your customers be prepared to pay for your product or service and is this enough to cover the costs?
Marketing and sales strategy
- How will you promote your product or service to your customers?
- How much can you spend on marketing your business?
- How will you sell the product and how will customers pay you?
- How will your business generate income?
- What are your costs?
- How much capital do you need? And how will you raise the funds?
- How long until you break even or start making a profit?
Business plan made simple
You’re busy, we get it. The thought of sitting down and writing pages of information about your business might not fit in with your schedule, but that doesn’t mean you shouldn’t create a business plan. If you don’t have time to create a full business plan, at least do this…
On one page, write down:
- The problem: What do your customers need?
- The solution: How does your product or service solve this problem?
- Business model: How will you make money?
- Target market: Who is your customer and how many of them are there?
- Competitive advantage: What makes you different from your competitors?
- Financial summary: Are you in a good or bad place financially? How long until you are profitable?
In good company
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