A business plan is a document that details the what, where, how and when of a business and converts these details into a proper financial plan. Draw up a business plan by answering the following questions.

Business details

• What is the name and physical address of the business?
• What is your legal structure: sole proprietor, partnership, close corporation, or company?
• Who are the owners of the business?

Business description

• What products will your business be selling?
• Are you a manufacturer or a retail business?

Business law

• What licence or permit do you need to start your business?
• How long will it take you to get such a licence or permit and where do you get it from?
• Do you know what business laws apply, such as the Labour Relations Act, UIF, Workers Compensation, Occupational Safety, PAYE, VAT, and income tax laws?

Business premises

• Do you have suitable premises?
• If it is not close to your suppliers, how are you going to cut back on costs of transporting the goods?
• If it is not close to your customers, how are you going to make it easier for customers to buy from you?
• Do you own the premises?

• If you are leasing, what is the length of the lease?
• By how much does your rent increase every month or year?
• If you are taking over from old tenants, are their electricity, water and telephone fully paid up?

Trading hours

• When will your business be open to customers?
• Will it open on Saturdays and on public holidays?

Business insurance

How will you protect your business from the risk of:

• Fire
• Theft and robbery
• Vandalism
• Public liability
• Loss of profits

Business operations

• What product will you be selling?
• Is this new on the market?
• Can you compete with other products on the market that are the same as yours?
• Do you know how much you will sell your product for?
• Have you calculated your total costs for making the product ready to sell?
• Do you know how much you are going to mark the product up?
• Do you know how many products you will have to sell to prevent monthly losses?
• Does the demand from customers change with the different seasons? if so, how are you going to survive in the bad seasons?
• If you have to buy machines: what is the lifespan of the machine? Who will you buy it from? What are the maintenance requirements and how much will it cost?
• Have you got reliable suppliers for your raw materials or products?
• Will you pay cash on delivery or on credit?

Human resources

• How many people will you have to employ?
• Do you need people with special skills?
• How will you find staff?
• How much are you going to pay staff?

Business records

• Do you know which business records you have to maintain?
• Can you keep records of income, expenses, assets and liabilities?
• Do you know how to make out salary payments, including deductions for tax and UIF?
• Do you know which financial reports have to be prepared? Who will do this for you?

Administration

• How many people do you need to work in administration?
• What will the costs of administration equipment and supplies be – photocopiers, cash registers, computers and printers, etc?

Operational costs

Do you know how much you will have to pay for:

• Rent, or loan and rates
• Electricity, water, telephone and stationery
• Cleaning

Financial plan

Say how much each item of your business will cost. You should work this out for every month of the year. Then you should work this out for the next three years.

• How much money you will need to start your business?
• How much money do you have?
• How much money will you have to borrow? how long will it take to repay the loan?

SUPPORT FOR DRAWING UP A BUSINESS PLAN

The Small Enterprise Development Finance Agency (SEDFA) is a state-owned entity which aims to provide support for small enterprises. SEDFA is a consolidation of SEDA and other agencies providing support to small enterprises and cooperatives. By centralising financial and non-financial assistance, offering business advice, investment support, and incubator services, SEDFA aims to enhance the support available to small businesses.

For more information view the Small Enterprise Development and Finance Agency website: www.sedfa.org.za.