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ENTREPRENEURSHIP.: Willpower, Expertise and Passion not Enough to Succeed in Business

 



Recent Western Cape Business News

Business owners often mistakenly believe that passion and a basic understanding of finance is all that is required to make a new business succeed.
The launch episode of the Standard Bank 'Think Big - Building Business Champions' show proved that placing an emphasis on business plans is an invaluable planning tool that can help businesses of all sizes to succeed.

The show encourages aspiring entrepreneurs to ‘Think Big’ about conquering challenging realities that new businesses face on a day to day basis, with an opportunity to win a R 1 million cash injection into their small businesses so that they can realise their dreams.
Commenting on the first episode of ‘Think Big’, which concentrated on the catering and service industries, Vuyo’s Kitchen and Vibe Events, Ravi Govender, Head of Small Enterprises at Standard Bank, says regardless of the size and nature of your business, a business plan forces a person to consider all aspects of their business.
“A business plan is more than just a tool for raising finance or a document developed to get you thinking about your business. Even though it is becoming quite common for business plans to be outsourced to professionals, in order to meet the formal requirements of a lending institution, the onus is on the business owner to ensure that the plan reflects his or her future plans.
“The business owner who sits down with blank sheets of paper and follows a disciplined planning process is taking a major step towards ensuring the future success of his/her plans,” says Mr Govender.
“More importantly, a business plan also contains a future view that predicts where the business will go, and what milestones should be achieved within the first five years of operation. It is a map to navigate the long business road ahead.”
Mr Govender says a key learning from the first ‘Think Big’ episode was that a well written business plan should always cover the following elements:

Description of the business, industry, products and the target market.
Research to identify markets, competitors, size of market, location and product distribution.
Unique selling proposition - what will make the business unique and competitive?
How products are priced, and what profit margins should be.
Overall financial position covering sales, expected profit forecasts, cash flow and expected return on investment.
Financial requirements which set out the capital needed to start the business and requirements for future expansion.
Marketing and how customers will be informed about products.
Milestones - the projected market share at certain periods of the company’s growth, what is essential
to grow the business and when it is anticipated that additional investment could be required.

He says that a thoroughly developed business plan presents these advantages:  

A base plan that provides a set strategic direction which can be tested against reality
It is easier to review your progress when you have a business plan. The plan will also quickly show you     where your initial business assumptions were wrong. This makes it easier to adapt the business     strategy and set new milestones.
Help keep the focus on the core business.  A strong business plan helps you to avoid the temptation of moving away from core, profitable activities and making short–term decisions that could have a negative impact on cash flow and profitability.
Plan correctly for expanding the business
Using the plan to identify where, and when, expansion should take place and whether these are still  applicable to the market.
Identifying changes in the market

 A business plan helps you to identify areas that need attention, and possible changes in customer     behaviour. This information will enable you to change marketing and advertising efforts, and help you    to avoid wasting money.
 Open new avenues for business
If your market has changed, you may find opportunities for expanding your business. For example, having a traditional fast food outlet could be supplemented by having a mobile service offering roadside service at university campuses.

Mr Govender says that a business plan is never a waste of time. The document will not only help a bank to evaluate your creditworthiness and attract potential investors, but it will also be a valuable working document that can be adapted accordingly to track your business accomplishments.

Think Big episodes can be viewed on SABC 3 at 9:30 pm every Thursday evening. The show is repeated at 4:00pm on the Sunday following the evening broadcast.

 

 
 
 
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