How to prepare a business plan

Your business plan is the blueprint for your business. It should give you a clear view of what you are aiming for, as well as your business's strengths, weaknesses and opportunities, and threats (SWOT Analysis) in your business environment. Use your business plan as your map - like all plans, it will not be cast in stone, but will be subject to constant review and change. Try to prepare a comprehensive but succinct plan. This will make it easier for investors and lenders to review and comment on it.

Your business plan must indicate the following:

  • What you intend doing?
  • How you will do it?
  • When you intend doing it?
  • Why you believe the venture will succeed?

Your business plan could be compiled in the format below. Simple examples are provided as a guide and cannot be taken as sufficient for a complete well-written business plan.

Professional-looking front page and contents page

  • Name of the business (e.g. Careline Shuttle Services)
  • Your business information (e.g. Kim Buthelezi, 12 Green St., Nyanga, Tel. 021 668 6000 etc.)

Executive Summary

The executive summary is the most vital part of the business plan to sell your strategy for success.

  • Description of product (e.g. shuttle service between Cape Town Airport and hotels in the CBD).
  • Why the business venture will be successful (e.g. will provide 24-hour, safe, door-to-door pick-ups and drop-offs and secure exclusive rights with ABC Hotels).
  • Short, medium and long-term objectives (e.g. objectives are to initially secure the CBD market and then expand to a national level).

Business description

  • General description of your business (e.g. shuttle service between airport and CBD, operating 24 hours, three vehicles).
  • Type of ownership (e.g. sole proprietor, 1 member).
  • Uniqueness of the product (e.g. 24-hours operation, exclusive rights with ABC Hotels).

Marketing plan and strategy

  • Target market (e.g. foreign tourists requiring reliable transport from the airport to accommodation and return).
  • Competitors strategy (e.g. most competitors charge low prices but have a low reliability rate and only operate from 08:00 to 18:00).
  • Pricing, product, promotion and distribution strategy (e.g. pricing will be higher than that of our competitors, but a more reliable 24-hour service operating with three vehicles will be offered).

Financial plan and strategy

  • Financial forecasts: Profit and loss (show calculations of expenses vs income), cash flow (show monthly inflow and outflow of cash), break-even analysis (show how many clients must be transported or trips undertaken to cover costs).
  • Source of funds (e.g. the owner will be contributing R80 000 and a family member has agreed to contribute R20 000 as a soft loan; a further amount of R30 000 will be requested from the bank).
  • Use of funds (e.g. to purchase three mini-buses, office furniture and salaries). Security offered (e.g. the owner will offer his/her house as security for any loan).

Operating plan and strategy

  • Staff component (e.g. the owner, three drivers, a receptionist). Suppliers (e.g. ABC Hotels, CBD accommodation providers, tour operators).
  • Description of the manufacturing/distribution of the product (e.g. vehicles will respond from call centre once request has been received; clients will be picked up at point A and dropped off at point B).

Conclusion

  • Motivation as to why business will be successful (e.g. we offer an excellent service with exclusive contracts with the ABC group of hotels.).
  • Motivation why finance should be granted (e.g. we have thoroughly researched the market and are convinced that our service will meet the needs of the client, providing an above average return on investment.).

Additional information (copies of supporting documents)

  • Credit reports (e.g. bank statements of owner for past 12 months).
  • Contracts (e.g. written agreement with ABC Hotels).
  • Legal documents (e.g. company registration, Professional Drivers Permit -PDP).
  • Leases (e.g. copy of lease agreement with Airports Company for a boarding point).

See previous article Things to consider when starting a business

See next article Types of businesses

Disclaimer: This article has been prepared for information purposes only and does not constitute legal advice, or a legal opinion. The practical application of the provisions of this article will vary depending on the facts of each case. The publication, author of the article and companies or individuals providing commentary cannot be held liable in any way.

Source: Information kindly supplied by Red Tape Reduction, a Western Cape Government initiative

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