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Economic and management sciences

Grade 9

Entrepreneurship

Module 13

Develop a business plan and budget

Activity:

To turn a business idea into a business plan

[lo 4.4]

Once the business idea has passed the viability test it must be developed into a business plan.

A business plan is a core document in terms of which a business is managed.

Business plans can be set out in a variety of ways. The following framework was based on a business plan of a company that has been using it for the past few years. It has been tested in practice.

BUSINESS PLAN

1. Vision of the enterprise

The vision of an enterprise says in a few words how the enterprise would like to see itself now as well as in the medium to long term. It does not change much from one year to the next.

Example:

To be the leading supplier of garden services in the Ermelo urban area.

2. Mission

The mission briefly states how the enterprise will go about pursuing its vision. The mission is adapted according to the changes that take place both within and outside the enterprise, and can therefore change from one year to the next.

Example:

Gardens are kept weed-free and neat and the soil is cultivated to increase fertility.

3. Organogram

The organogram explains the structure of an organisation in terms of the functions and employees, and it indicates who reports to whom.

4. The market

4.1 Potential clients

It is important to give as much information as possible about potential clients. Market research is essential. It can be done by way of questionnaires, interviews and telephone calls, as well as by studying the newspapers and any documents that contain information about the community.

4.2 Competitors

It is essential to have information about competitors. There should be an indication of who the competitors are and what their strengths are, but more importantly what their weaknesses are, what people say about them, exactly what they sell and what their marketing strategies are.

5. Goals for the year in question (in this case 2004)

A business always sets specific goals that it wants to achieve in a particular year.

Example:

5.1 To be contracted by 200 home owners for the care of their gardens

5.2 To reach sales of R980 000,00

  • To achieve a profit equal to 20% of the sales

6. Steps in pursuing the goals in the particular year

For each of the goals there will be an indication of what is to be done to achieve the goal.

Example:

6.1 Goals 5.1 and 5.2 will be achieved by

tailoring the product or service to the needs of the clients,

pricing it right,

advertising in the newspaper,

making personal visits to all the homes in the area,

giving excellent service to existing clients so that they advertise the undertaking, and offering a 20% discount on the normal price.

6.2 Goal 5.3 will be achieved by

cutting out unnecessary expenses, etc.

A little more about marketing:

  • Pursuing business goals without effective marketing is not possible and therefore marketing should get a great deal of attention in this part of the business plan. It is often said that it is easier to sell a poor product if the marketing is good, than to sell a good product if the marketing is poor.
  • As far as the marketing of a business is concerned, two phases can be distinguished:

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Source:  OpenStax, Economic and management sciences grade 9. OpenStax CNX. Sep 15, 2009 Download for free at http://cnx.org/content/col11074/1.1
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