Every new business starts with a good idea. Before you can start the business, you need to put the idea on paper and get funding.
Now that you’ve taken the plunge and decided to start your own business, there’s quite a bit of preparation to do before you can get started in the business. Our panel of experts guides you through the essentials.
THE BUSINESS PLAN
The purpose of a business plan is to give your idea a plan and a step-by-step guide to taking it forward. A business plan won’t determine the success of your business, but the old adage holds true – if you don’t plan, you plan to fail, say professors Ricardo Peters and Renier Grosch of the Faculty of Economics and Management from the University of the Western Cape.
A plan is crucial if you need to raise funds from a bank, a financial development institution or to invest or finance or expand your operations.
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You’ll need to show you’ve put a lot of thought into your business idea and provide the reasons – in writing – why you think you’ll be successful, they say.
Siya Sakuba, Senior Business Advisor at the Small Enterprise Development Agency (Seda) in Western Cape, explains that a business plan typically includes several elements, such as:
A business summary – general information about the business, such as a description of the business, financing required, and information about its owners and management.
A SWOT analysis – it represents strengths, weaknesses, opportunities and threats. You need to list them all to see which areas need intervention and how strong your plan is.
A marketing plan – describing your market research, an analysis of customers, competitors, your target market and your potential market share.
A human resources plan – company structure, personnel costs, job descriptions.
Key management systems – what is in place and what is needed.
Financial review and risk analysis – this examines potential sources of funding and includes a risk assessment.
A technical review of the necessary equipment – a manufacturing plan.
An implementation plan – indicating timeframes for business start-up or expansion.
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Sometimes you can get by without a business plan, says Celeste Stewart, director of Bold Curiosity, a learning and development consultancy. But you must have a clear outline of what you want to do.
“It’s more important to know why you’re starting your business and to have a vision.”
Organizations such as Seda and the National Youth Development Agency (NYDA) have business counselors and some offer grants, Siya says.
There are many governmental and non-governmental institutions that can help with funding, including:
SA SME Fund – It was created by a group of CEOs to fund high potential entrepreneurs and SMEs.
The Small Business Finance Agency offers loans to South African SMEs. It also runs the Amavulandlela funding program which provides funding for entrepreneurs with disabilities.
The National Empowerment Fund supports B-BBEE and previously disadvantaged individuals and communities.
The NYDA funds entrepreneurs between the ages of 18 and 35 and aims to help them start a business or expand an existing business.
The Industrial Development Corporation funds start-up companies that need capital for equipment, working capital and buildings. He also funds the expansion of the business.
Land Bank offers a range of loans for agricultural projects.