Business Plan Outline

MTN

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4/18/2008

BUSINESS PLAN
DESCRIPTION OF THE BUSINESS The objective of this section is to explain : ∗ ∗ ∗ ∗ What the business is all about ? How do you plan to run it ? Owner operated/Managed Why you think the business will be successful ?

If a new business, the description should also contain responses to the following : ∗ ∗ ∗ ∗ ∗ Why will you be successful in this business ? What is your experience in this business ? What will be special about this business ? Have you spoken to other people (fellow dealers) in this kind of business and what was their response Will you offer credit to your customers ?

THE MARKET The basic marketing considerations : ∗ ∗ ∗ ∗ ∗ ∗ Who is your market ? What is the present size of the market ? What % of the market will you have ? What is the markets growth potential ? Who is competing for your market and what are the future risks? As the market grows, will your share increase or decrease ?

Marketing (4 x P’s) Product / Service ∗ ∗ ∗ ∗ What product / services will be sold your business ? Why would a customer make use of your product / service ? What is the different product / service features making your product / service so unique Can the competitors copy your product / service easily ? If no, why not ? Place / Distribution ∗ Business physical address ?
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What are the physical features of your building ? Is the building leased or owned ? Give Details If renovations are needed, what are they ? What is the expected cost ? What is the neighbourhood like ? Does the zoning permit your kind of business? What kind of businesses are in the area ? Have you considered other areas ? Why is this one the most desirable site for your business ? Why is this right building and location for your business ? How does the location affect your operating costs ? If you are not performing as predicted, due to bad location, will you be able to move your business? How much will it cost you to relocate ? Price

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How will you attract and keep this market ? How can you expand your market ? What special advantages do you offer to attract potential customers? (You don’t necessarily have to engage in direct price competition)? What price is the competitor charging ? Why is it more expensive or cheaper than your service/product ? Promotion ∗ ∗ ∗ ∗ ∗ Do you think it is necessary to advertise in your business, if yes explain way ? What type of advertising will you make use of ? Why would you say this type of advertising will be efficient ? As a % of turnover, how much will you spend on advertising ? Will you as a dealer be able to have input in the spending of other marketing funds ?

COMPETITION If you have decided that your market is large enough to be profitable and promises reasonable expansions possibilities, check you competition, both direct (similar operation) and indirect. Consider these questions : ∗ ∗ ∗ ∗ ∗ ∗ ∗ Who are your five nearest competitors ? Why would you consider these operation to be competitors ? How will your operation be better than theirs ? How are their business : Steady ? Increasing ? Decreasing ? Why ? How are their operations similar and dissimilar to yours ? What are their strengths and or / weaknesses ? What have you learned from watching their operations ?
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MANAGEMENT Include and describe the following on all members / shareholders / directors : ∗ Personal history (Include CV) − Qualifications (Formal & informal) − Related work experience − Duties and responsibilities − Salary − Strengths & Weaknesses − Business background − Management experience − Age, special interests, reasons for going into a business − Heath − Why are your going to be successful in this business taking your background into consideration? Personnel The following will describe your personnel needs : ∗ ∗ ∗ ∗ ∗ ∗ ∗ ∗ ∗ SUPPORT ∗ ∗ ∗ ∗ Who will be the major role players in supporting your business ? What type of support will these role players provide in your business ? If the current “supporters” fall away, will you be able to survive? If this is a franchise operation, describe the whole support function from their side as Franchisors. Will the members / shareholders / directors be directly involved in the business? What are your personnel needs now ? In the near future ? In five years ? What skills should they have ? Are the people you need available ? Full or part-time ? Salaries or hourly wages ? Fringe benefits ? Overtime ? Will you have to train people ? If so how and at what cost ?

SWOT ANALYSIS Inside your business ∗ Strengths ∗ Weaknesses Outside your business
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Opportunities Threats FINANCIAL INFORMATION Set-up Costs

Provide a detailed breakdown of the set-up cost : − Franchise Fee if a franchise operation − Shop fitting − Equipment − Signage − Stock − Working capital, Goodwill etc. − Other NOTE : Remember to include VAT How much will your own contribution be ? Where did you get your own contribution from ? What will be paid with the own contribution ? If the property is leased, will the landlord be able to contribute any funds in terms of shop fitting etc. Remember to include deposits e.g. Rent, water & lights, telephone etc. in the initial set-up cost. If this is a franchise operation what is the initial franchisee fee and the royalty fee payable on a monthly basis to the Franchisor ? How much will the owners remuneration be (monthly) ? If this is a franchise business, will you be able to buy your equipment from any supplier or should you buy it from a selected supplier, nominated by the Franchisor.

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EXISTING BUSINESS If this is an existing business provide audited financials or at least the latest management accounts on the business CASH-FLOW PROJECTIONS Tips : Include the following ∗ Turnover ∗ Cost of Sales ∗ Gross profit (Turnover minus Cost of Sales) ∗ All expenses payable (Remember your own salary) ∗ Royalty payments ∗ Bank repayment ∗ Nett profit after loan repayment
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(Do projections for 3 year period, considering the escalation on rent & turnover growth & inflation) ∗ Show us the break-even point SECURITY ∗ What type of security can you provide ? − Investments − Life policies with surrender values − Unit Trusts − JSE Shares − Bonds on properties − Pledge of Kruger Rands − 3rd Party Suretyships − Other Do you have any life policies we can use to cover your debt ?

DOCUMENTATION NEEDED BY THE BANK 1 2 3 4 5 6 7 8 9 10 CV’s on all members / shareholders / directors Copies of ID’s on all members / shareholders / directors Marital certificates Statement of assets & liabilities on all members / shareholders / directors Registration certificates if business trades as , CC, PTY or TRUST Application documents done by each member / shareholder / director Personal details on third party sureties Cash-flow projections for at least one year Comprehensive business plan Copy of the lease agreement if property is leased or title deed if property is owned (Tip : Never sign a lease agreement before any finance has been approved) 11 Financial statements if existing business If the business is a franchise operation you will need to forward the following documentation in addition the above : 1 2 * Franchise agreement Franchisor disclosure document consisting of : Key franchise details − Legal trading name − Street and postal address, telephone and fax numbers for both registered and business office − Membership status with FASA − Names and titles of key franchise officers, shareholders and employees (Supply list) − Number of current franchisees and other outlets − Where Franchisor part of a group, details of the group structure, countries of incorporation and % share holding should be disclosed
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− If their is a master sub-Franchisor, full details need to be disclosed on both the Franchisor and master sub-Franchisor Background to the Franchise − Nature & period of existence − Background or History − Description of products, way of doing business, key success factors. Current franchisees − Contact details, commencement dates on all franchisees − Details of the number of franchises terminated over past year − Details of current unresolved litigation with existing or former franchisees. − Details of any material debt, criminal, civil or administrative proceedings, or insolvency's concerning Franchisor or officers over the past 5 years Profile of ideal franchisee − List of characteristics a successful a franchisee is likely to possess Site details − All relevant information Franchise Agreement Summary − Details of any restrictions (e.g. territorial) imposed on the franchisee − Basis Franchisors involvement/approval of site selection − Summary of terms and conditions relating to termination, renewal, goodwill and assignment of the franchise − Supply of product Franchisor support − Support & services the franchisee can expect in return for the initial franchise fee − Full details on training (Initial & ongoing), what, where, how needs to attend, cost, length − List of contents of operations & procedure manual Financial information − Details of what will be provided by the Franchisor in return for the initial franchise fee paid − Comprehensive breakdown on total set-up cost − Initial working capital − Royalty payable Franchise officers − Short CV or background on all key franchise officers Auditor’s certificate − Not older than 12 months certifying that the Franchisor is a going concern and is in the position to pay its debts as and when they become due.
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− If the franchise forms part of group, the auditor’s certificate should also pertain to these group companies * Directors certificate − On letterhead on which the franchise directors certify the viability of the business Financial projections − Projected cash-flow, balance sheet & income statement on a typical outlet − All assumptions must be listed Operations & Procedure Manual (Training) - Copy of index List of all equipment to be financed (Supplier, price etc.)

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