It is imperative to assess other business models in your industry. From this you need to extrapolate, devise and fine-tune a practical business model that will work for you. Individualise it with your own personal stamp that will differentiate it from others, while keeping in mind that it needs to be workable and not merely an impressive plan in theory.
Business Plan Financials
The high incidence of business failure within the first year, points amongst other things to a serious lack of financial knowledge amongst most budding entrepreneurs. Cash flow forecasts and financial planning are two key elements in business survival. In fact, most of your time and effort should be spent on the financial model for the business. Entrepreneurs should understand their finances inside out – those that do, may well hold the key to success and prosperity. To give you a simple example: take a coffee shop business – it would take a basic calculation to know that they would need to sell for instance 8 000 cups of coffee per month, just to break-even. In many instances this mathematical exercise is not done and the business fails.
Your operational plan is merely a comprehensive monthly or daily plan of action that spells out what has to be done in terms of sourcing stocks and selling it. For an operational plan to be successful everyone in the business must know exactly what is expected of them.
One way of ensuring its success is to have a briefing session in the mornings and a debriefing session after the close of day. This will help you assess what worked on any given day and what didn’t. It is also an excellent way of getting staff together for motivation and training purposes.
Your marketing plan should include a sales strategy, advertising strategy [pamphlets, signage, media advertising, PR etc], promotional strategy etc. Marketing represents a client or customer’s holistic view of your business. It is therefore of paramount importance not to ignore your marketing processes.
Because media advertising can be very expensive, entrepreneurs should plan it carefully, as it will affect their business budget, or may prove to be a costly exercise if the wrong media is used. Ways to overcome this is to at first only advertise in your local media – it is cheaper than most regional media, but ensure that you reach your target market. It doesn’t help that you spend loads of money on something that doesn’t generate an income.
If you lack knowledge in this regard speak to an advertising agency or PR consultancy. I am not an advocate of pamphlets due to the fact that the public are bombarded with it on a daily basis. In this regard, I’d rather give a low-cost useful promotional item to prospective clients – even classy fridge magnets. Be different and come up with novel and cost effective ideas that will draw shoppers to your business.
Presentation of the business plan:
- Ask family members or friends to comment on your business plan.
- Implement any changes and ask a knowledgeable person to edit the copy. Remember, nothing says unprofessional more than a business plan full of spelling errors.
- Consider using a graphic designer to lay it out in a professional manner, perhaps even in presentation format – brief the designer well in terms of your expectations – for instance, I want the layout to reflect a classy and elegant image or a young and trendy one.
- Consider using an accountant to help you to compile realistic financial forecasts. Also remember, bank managers deal with applicants on a daily basis and will easily be able to detect any attempts at guessing your financials.
Getting your business plan in front of the right people
The two potential investors in your business is either a financial institution and private investors. Take note that none of these groups will consider investing in your business unless you have a professional and workable business plan that has the potential of generating profits over long periods of time.
You need to identify these so called right people. Perhaps your own bank, as you may already have a relationship with them. Other organisations that you may consider approaching include Business Partners. However, you may also approach wealthy business people or investors – they often advertise in the smalls – interested in new profitable ventures as an equity partner.
Pitching and presenting the business idea
Nothing impresses more than an entrepreneur who is focused and knows his or her business inside out. Know your products, know your competitors, understand your customer profiles, know your financials – prepare well if you want to sell the strong points of your business to your audience.
Asking for constructive criticism and making necessary adjustments
As mentioned earlier, discuss your business plans with your family and friends and listen to their advice. You don’t need to take their advice but its always good to have a sounding board and a different perspective.
Involving a Mentor
I do not know of any competitor that will gladly help his or her opposition, so I believe it would be very difficult to find a mentor in your specific industry. The use of a mentor is perhaps more applicable to businesses where the son or daughter takes over from his or her parents. In which case they are very fortunate for having family to show them the ropes. In cases where a business is purchased, it is important to contractually ensure that the previous owner helps you for a period of time in the business. That should give you lot of confidence to go forward.