HOW DO I COMPILE A BUSINESS PLAN?
ARE YOU ASKING THE RIGHT QUESTION?
Before you read this sheet:
You should either be a business owner or be sure you want to be a business owner and that this is the right time for you to venture into business * You should have a clear business idea and area of business * You should have done some basic viability studies
* You should have read "What is a business plan?"
Remember: If you can't compile a business plan, you can't run anything more than a struggling little business. To compile a good business plan, you need to be able to think strategically, investigate and read the market, convince lots of people to give you information, understand financial statements, crystalise your ideas clearly, and communicate them to others. To run a business successfully, you need all those skills, and more. When you learn how to write a business plan, you gain a lot of skills needed to run a business.
This sheet describes good business planning as a three-step cyclical process * It highlights the main areas of your business plan, the questions you should answer and suggestions for research methods in each area. * It briefly describes the structure of the written business plan. * It warns against the danger of 'over-planning'
THE FIVE MAIN AREAS OF A BUSINESS PLAN
Your business plan should consist of five main areas:
1. Your strategic focus (your niche, or core business)
2. The marketing plan
3. The operations plan
4. The staffing plan.
5. The financial plan
THE PLANNING CYCLE
Tackle your business planning in stages, starting with your marketing plan.
For each of these stages, use a three-step cyclical planning process.
Step 1: Think and Strategise
* Clarify your objectives - what do you want to achieve in your business and each area of your business? * Be concrete, using figures and targets, workflow diagrams, financial statements with rand values, etc. Step 2: Test your ideas through research
* Use more than one type of research method. Speak to a wide variety of people, read, research your industry, and use your eyes and ears. * Do not try to only find facts that confirm your optimism. Find out which parts will not work and which parts will need extra investment. As you get feedback, you 'subtract' from your initial idea until only a kernel of possibility remains. If that kernel is viable, you can proceed with your business. * When speaking to people, stay neutral and do not ask leading questions. People might tell you what they think you want to hear. On the other hand, you build valuable contacts and potential custom through research, so portray a professional image. * Be sensitive when doing research. Ask permission from heads of institutions, and owners of shops. Do not pressure people into giving confidential information about others Step 3: Analyse and draw conclusions
* Always err on the side of caution. For example, if someone in a similar industry has a turnover of R100 000 a month, assume that this is the maximum you can expect, not the minimum. * The planning cycle is a continuous process. As you do more research you will change your thinking and strategy, which will in turn inform further research. The cycle continues after you've started a business. Your research then consists of your sales figures, your expenses, feedback from your customers, feedback from your staff, and information about what your competitors are doing. A business plan is a dynamic, ever-changing constantly updated tool that all successful business owners use. THE FOUR MAIN AREAS OF THE BUSINESS PLAN
Apply the planning cycle to each of the four areas of the business plan. Once you have answered all the questions below through a process of thinking, research and analysis, you should have a fairly good idea of what you want to achieve with your business and how you will achieve it.
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