Business Plan

FOR

Southern Light Trading (Pty) ltd

Facilitated by: Ilana Marnewecke

Global Marketing
September 2023

© Global Marketing
Confidentiality and Good Faith Notice

This Business Plan is confidential and contains proprietary information and intellectual
property of Southern Light Trading (Pty) Ltd. Neither this Business Plan nor any of the
information contained herein may be reproduced or disclosed under any circumstances
without the express written permission of the owners of Southern Light Trading. This
Business Plan does not constitute an offer to sell or solicitation of an offer to buy
securities in Southern Light Trading. Any such offers and sales will be made only to
“Accredited Investors”, pursuant to separate agreements to be negotiated by the
parties.

This Business Plan includes “forward-looking statements and projections.” All such
statements and projections within this Business Plan, other than statements of
historical fact, regarding the Company or its strategies, plans, objectives and
expectations, are all forward-looking statements. Although the Company believes that
the projections reflected in this plan are reasonable at this time, it can give no
assurance that these projections will prove to have been correct.

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 Company Information

Company Name Southern Light Trading (Pty) Ltd

Trading Name Southern Light Trading Spaza Shop
Registration Number 2018/499303/07
Income Tax Number 9108191249
Tax Pin Number E88D3G9325
CSD Registration MAAA0792544
Province Gauteng Province
Physical/Business Address Shop No 1 Paekwood
Longmore & Orange Blossom Boulevard
Orchards
Contact Person Kgabo Maria Mashiane
072 124 1145
maria.kgabo@gmail.com
Shareholders Kgabo Maria Mashiane
ID No: 600607 0509 089
Black Female
100% Shareholding
Business Sector Spaza Shop
BEE Level Level 1
Required Funding Amount R803,923
No of years’ experience 5 years
Employment Creation 2 permanent
Social Media Platforms Website: n/a Twitter: n/a
Facebook: n/a Instagram: n/a

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 CONTENTS
Page
1. Executive Summary 6
2. COMPANY OVERVIEW 7
2.1 BACKGROUND 7
2.2 MISSION 8
2.3 VISION 8
2.4 VALUES 8
2.5 FUTURE OBJECTIVES 8
2.6 COMPANY LOCATION AND FACILITIES 9
2.7 SWOT ANALYSIS 10
2.8 KEY SUCCESS FACTORS 11
2.9 DEVELOPMENT OUTCOMES 11
3. PRODUCT/SERVICE PORTFOLIO 12
3.1 DESCRIPTION 12
3.2 FEATURES & BENEFITS 13
3.3 UNIQUE SELLING PROPOSITION 13
3.4 BUSINESS RISKS & MITIGATING FACTORS 13
4. INDUSTRY ANALYSIS 14
4.1 SPAZA SHOP MARKET OVERVIEW 14
4.2 INDUSTRY CHALLENGES EXPERIENCED BY SPAZA SHOPS 14
4.3 MARKET TRENDS FOR INFORMAL RETAIL IN SOUTH AFRICA 15
4.4 MARKET OPPORTUNITIES 16
5. THE MARKET 16
5.1 MARKETING STRATEGIES (4 P’S) 16
5.1.1 PRODUCT/SERVICE STRATEGY 17
5.1.2 PROMOTION STRATEGY 17
5.1.3 DISTRIBUTION/PLACE STRATEGY 18
5.1.4 PRICE STRATEGY 18
5.2 TARGET MARKET SEGMENTS 18
5.3 TARGET MARKET STRATEGIES 19
5.4 MARKET SIZE 19
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 5.5 COMPETITOR ANALYSIS 19
5.6 COMPETITIVE ADVANTAGES 19
6. MANAGEMENT SUMMARY 20
6.1 OPERATIONAL STRUCTURE 20
6.2 MANAGEMENT TEAM 20
6.3 WORKFORCE 21
7. MARKETING AND SALES OBJECTIVES 21
8. FINANCIAL PLAN 21
8.1 ASSUMPTIONS 21
8.2 SALES PROJECTIONS 22
8.3 EMPLOYMENT CREATION & COST 22
8.4 PROJECTED EXPENSE STRUCTURE 23
8.5 PROJECTED INCOME STATEMENT 23
8.6 BREAK EVEN ANALYSIS 24
8.7 LOAN APPLICATION AND USE 24
8.8 LOAN PAYBACK 24
9. ADDENDUM A 24
10. ADDENDUM B 24
EXECUTIVE SUMMARY
Southern Light Trading Pty (Ltd) was established in 2018 by Kgabo Maria Mashiane
with the core business entailing a spaza shop located in the Fairways Gardens Estate.
The business is 100% black and female owned and is rated as a level 1 BEE
contributor. The business currently supplies the Fairways Gardens Estate which
consists of 500 households. The spaza shop is also open to two other neighbouring
estates as well as the three estates workers. The closest shopping centre to the three
respective estates are 10km away, thus the Southern Light Trading Spaza shop has
become a tremendous convenience to the above-mentioned consumers as they no
longer need to travel to shopping centres to access basic groceries.

This was particularly evident in 2020 during the nationwide lockdown where the
movement of people, goods and services was restricted due the corona virus
pandemic. Under safe controlled conditions, Southern Light Trading was able to
continue to provide and meet the needs of the residents. With the recent surge in

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online shopping a few families have shown interest and have requested deliver to their
homes. This is currently being done on an ad hoc basis but has shown that there is
potential for this business model to be successful.

The scope of the business plan is to apply for funding to further enhance the business
service offerings. The need for a cash guard payment management system is the first
demand for better cash payment management, POS device for card payments, solar
inverter, stock management system, marketing material, additional fridges and an ice
cream machine. This will allow the business to operate more efficiently, offer better
quality services with various payment options and more so allow for increased stock
carry.

Around 80% of South Africa's population visits spaza shops daily, representing about
40% of total yearly food spend. The market size of this sector is estimated to be R178
billion – far larger than the country's largest retailer, Shoprite's R149.55 billion market
cap. there are over 150,000 spaza shops in South Africa, and the sector could be a
goldmine for traditional retailers and fast-moving consumer goods (FMCGs)
companies.

The key success factors for any spaza shop are to offer a variety of groceries and
services such as airtime/data, groceries, conveniences items, toiletries, etc.
Furthermore, good customer service which means semi-skilled workers must be
employed. Most recently a key success factor identified is the ability to offer payment
options as many consumers are moving away from cash and demands card payments
or phone payments. Southern Light Trading has been offering all of the above and is a
customer driven business focussed on satisfying customer demands.

The financial plan entails obtaining a loan of R803,923 to purchase a cash guard cash
management device, POS, solar inverter, marketing material and cash flow. Sales are
projected to reach R2,250,000; R3,577,500 and R4,424,175 in years one, two and
three respectively. An after-tax profit is projected at R267,840 in year one of
implementation of the business plan.

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 1. COMPANY OVERVIEW
1.1 BACKGROUND
Southern Light Trading, operating as a spaza shop first started operations as a
Laundromat, offering laundry services to the residents of the Fairways Gardens Estate
for their convenience. Initially the Laundromat was to operate on a self-service basis,
but the owner, Maria Mashiane, saw the business opportunity and advised the HOA of
the Estate to rather outsource the provision of the service in order to preserve the
machines in a good working condition and ensure continuity of the Laundromat service.
This proposal was accepted by both the HOA and developer/ manager of the estate
and Mrs Mashiane started operations.

Over time, as trading continued, Mrs Mashiane identified a need that the residents and
those living and working in and around the estate had the need for provision of a few
basic needs that could conveniently be distributed to them via a tuck shop format. In its
initial stages, the tuck shop supplied a limited variety of goods such as basic fast
moving consumer goods including bread, milk and vegetables, etc. The tuck shop grew
to its current level over several years through the owner’ hard work, dedication and
passion for business and empowering others along the way. She also loves to
continually learn and develop herself and this has been done through several training
opportunities offered by different Government and private sectors. The benefits of
utilising a point-of-sale system were immense and included
 Better management of stock
 Better management of cash flow
 Enhanced monitoring and evaluation of the business and its trajectory

The biggest benefit of using that particular point of sale was that Southern Light was
able to provide a wide variety of prepaid products and services to its customers, who
would otherwise have had to travel over 10kms to access them at the closest shopping
centre.

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1.2 MISSION
Southern Light Trading’ mission is to offer affordable and convenient goods and
services on the doorstep for Fairways Gardens Estate residents as well as
neighbouring estates backed by professional staff through state-of-the-art facilities,
systems and infrastructure.

1.3 VISION
The vision is to grow the business to offer increase convenience to the residents in the
and around the estate which will allow for further job creation and empowerment of the
local people.

1.4 VALUES
Southern Light Trading will be committed to provide residents with retailed convenience
items in a modern, professional, clean and safe environment whilst at the same time
satisfying the customer requirements in the most efficient and effective manner: Other
values include:
 Credibility
 Integrity
 Loyalty
 Customer orientated

1.5 FUTURE OBJECTIVES

Future objectives of the BI Retail are to:
Spaza Shop Facilities:
 Access funding to purchase required infrastructure to operate more effectively and
offer increased quality services;
 Install solar inverter to prevent loss of goods and customers during loadshedding;
 Achieve economies of scale by increasing stock in-take;
 Ensure ongoing operations through applying preventative maintenance and
continued maintenance and repair on the infrastructure at hand;
 Recruit and train two new employees in the first year of implementing the business
plan;
 Develop enthusiastically satisfied customers all the time;
Marketing & Sales:

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  Position the business is the leading and only spaza shop in the estate that people
can trust and rely for quality goods at all times;
 Create sufficient market awareness of the business and its offerings to the estate
residents as well as neighbouring estates and workings in these estates;
 Implement stock management system;
Financial:
 Structure a financially sound, viable and sustainable business;
 Apply and secure funding to purchase the cash guard, POS, marketing material and
solar inverter;
 Generate sales of R2,250,000 in year one of expansion;
Customer Service:
 Create a strong customer service orientation to effectively deal with all consumers;
 Live up to promises and expectations of offering a clean and safe shopping
experience;
 Ensure high quality customer service;
Research and development:
 Conduct ongoing research and development to stay in tune with the market;
 Constantly improve worker performances to ensure a well maintained facilities;
Expansion & Growth:
 Diversify spaza shop offerings to include additional products and cooked meals in
future;
 Continuous creation of jobs;
 Skills development and training for all workers

1.6 COMPANY LOCATION AND FACILITIES

The spaza shop is located inside the Fairways Gardens Estate at Longmore & Orange
Blossom Boulevard. The existing and future facilities are as follow:
Existing Facilities Future Facilities
 Spaza shop measuring 35m2  Solar inverter
 Two permanent workers  Additional two fridges
 Convenience goods and services  Stock management systems
 Fridges and freezers  POS & back office

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  Shelving  Cash guard cash payment system

1.7 SWOT ANALYSIS

The strengths, weaknesses, opportunities and threats facing the enterprise are mostly
positive as can be observed from the analysis below and confirms the potential of the
operation. The plan is to capitalise on the opportunities and build on the strengths.
Strengths Weaknesses
• Well educated and passionate owner • Loadshedding effects on the business and what it
• The experience and knowledge the owner persist offers
• Convenience store in a estate has had a very • Not offering payment solutions
positive response from consumers • High cash volumes and sitting with cash at hand
• Fresh and quality items sold • Lack of stock management
• Professional staff managed by the owner
• Limited competitors in the estate and the closest
retail shop are 10km away
• Job creation
Opportunities Threats
• Job creation for people from the community • Subdued economic climate
• Training and upskilling local community • Consumers moving away from cash payments
• Retail sector growth potential • Crime and petty theft
• Increased payment options for consumers
• Growth opportunities to increase business
offerings to consumers
• Government incentives for BEE business in
South Africa

1.8 KEY SUCCESS FACTORS

Based on the owner’ background and experience, the knowledge gained has enabled
her to obtain a clear picture of the key success factors that have been identified which
include the following factors:
 Employing qualified workers to assist consumers and make use of the systems and
infrastructure at hand;
 Payment option, not being limited to cash only, or card machine only;

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  Offering a variety of convenience goods and services to satisfy the demands of
consumers;
 Efficient cost and cash flow control overseen by the owner;
 Strong customer service orientation thus importance of acquiring skilled workers as
well as training workers;
 Stock management system implementation to track in the input and output of
products;
 Structuring a financially sound business with adequate cash flow provision;
 Listening to consumers and their needs;
 Strong management in terms of staff management, financial management and basic
business control on a daily basis;

1.9 DEVELOPMENT OUTCOMES

The development impact and outcomes of the project are as follows:
 New employment creation for two new permanent employees in the next year of
implementing the business plan;
 Generate sales of R2,250,000 in the first year of expansion;
 New investment of R803,923 contributing to new investment in region;
 Contribute to growth and local economic development of the region;
 Providing solutions to residents in the estate for quick convenient items at their door
step;

2. PRODUCT/SERVICE PORTFOLIO
2.1 DESCRIPTION
Southern Light Trading’ core business entails a spaza shop selling convenience goods
and services to the Fairways Gardens Estate community and surrounding neighbouring
estates.

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 The business is in need of more effective cash payment management. The CashGuard
cash Management system offers a complete solution for efficient, secure and closed
cash handling at the till point. The system resolves many of the problems involved in
the traditional cash handling. Southern Light Trading will also apply for POS
device/system to take card payments as well.

Furthermore, access to funding will be used for solar inverter to prevent the challenge
the loadshedding is currently having on the business. A vehicle lease will be taken for a
delivery vehicle for those residents who prefer delivered services. Marketing material
will be developed to continuously advertise in the estate and its neighbouring
community for specials and new products. Apart from the social media pages being
used.

2.2 FEATURES & BENEFITS

The range of products and services has the following features:
Facility / Service Features
Spaza shop con-  Spaza shop measuring 35m2.
venience store selling a  Economies of scale by carrying sufficient quantities of everything to satisfy
range of fresh produce, demands of consumers.
groceries, toiletries,  Soon to have solar inverter to prevent produce going bad or not being able
cleaning products,

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 airtime/data, etc. to sell because of loadshedding.
 Friendly and professional staff
 Supplying to the demands of the consumers

2.3 UNIQUE SELLING PROPOSITION

The USP (Unique Selling Proposition) is offering a spaza shop and general dealership
offering any and all basic convenience items at affordable rates to the community in
and around Fairways Gardens Estate.

2.4 BUSINESS RISKS & MITIGATING FACTORS

The following risks and mitigating factors to address these risks were identified.
Risks
Not adhering to the demand of the
consumers
No getting enough feet
Competition of spaza shops and larger
grocery stores
Ineffective marketing and branding
Unprofessionalism of staff and workers
Risk Possible mitigation
level
Low The risk will be mitigated by listening to consumers and
conducting regular customer satisfaction surveys to ensure
customers can state what they want more form the store
Medium Risk can be mitigated by running specials, carrying
sufficient stock, diverse range of offerings and ensuring
sufficient awareness is created of the spaza shop inside
the estate and neighbouring estates
Low Risk can be mitigated by offering top quality shopping
experience backed by the fact that the closest competitor is
10km away
Low This risk can be mitigated developing a detailed marketing
plan and strategies of marketing activities to take place and
ensure the brand is built and people are informed of the
new container retailers
Medium Risk to be mitigated by ensuring staff are well trained
specially on customer service

3. INDUSTRY ANALYSIS
3.1 SPAZA SHOP MARKET OVERVIEW
Every day, millions of consumers across the country visit retail stores, either physical
ones (known as bricks-and-mortar stores) or digital ones, using the internet or cellular

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 networks. They visit these stores to buy food and household goods (groceries),
clothing, hardware, health and beauty products, and so the list goes on.

South Africa is a large, complex and dynamic country with almost 60 million diverse
people of varying races, cultures and incomes, spread across nine provinces and
speaking 11 official languages. Vastly differing South African consumer needs and
expectations along with unique political and socio-economic forces have resulted in a
retail landscape that spans from sophisticated modern 'formal retail' chain stores, such
as Woolworths, Checkers and Pick n Pay, largely serving upper-income consumers, to
big-box cash-and-carry and hybrid stores such as Makro, to neighbourhood
convenience stores like SPAR, to thousands of informal retail spaza shops selling food
and grocery products in townships and poorer communities.

There are over 150,000 spaza shops in South Africa, and the sector could be a
goldmine for traditional retailers and fast-moving consumer goods (FMCGs)
companies. 80% of South Africa’s population visits spaza shops daily, representing
about 40% of total yearly food spend. The market size of this sector is estimated to be
R178 billion – far larger than the country’s largest retailer, Shoprite’s, R149.55 billion
market cap. Tiger Brands, South Africa’s largest food company, recently announced its
intentions to tap into this market by partnering with 130,000 spaza shops.

Spaza Shops still experience various constraints for example, most spaza shop owners
don’t have the luxury or access to buy stock directly from FMCGs. This could be
because the owners lack storage space and the means to transport large stock
volumes. This means the shop owners often buy from wholesalers and purchase stock
in limited ranges. This leads to higher cost pressures and a limited product pool.

3.2 INDUSTRY CHALLENGES EXPERIENCED BY SPAZA SHOPS

1. Competition from large retailers: Spaza shops often have to compete with larger
retail chains and supermarkets, such as Shoprite’s uSave, which are increasingly
opening stores and can offer a wider range of products and better pricing due to
their economies of scale.
2. Limited buying power: Spaza shops lack buying power and don’t always get the
best deal and volume discounts. The result is that goods are more expensive,
leaving the shop to rely on convenience as its primary transaction driver.

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 3. Hard-to-reach places with limited volume: Shops are usually based in townships,
some with no roads, street addresses, or geolocation codes, making it difficult to
determine their location and service them effectively.
4. Security concerns: Spaza shops, especially those in high-crime areas, may face
security challenges such as theft, burglaries, robberies, and xenophobic attacks,
which can impact their operations and safety.
5. Stock management and inventory control: With limited cash flow, maintaining a
balanced inventory and managing stock levels can be challenging for spaza shop
owners, leading to stockouts or excess inventory that ties up capital.
6. Limited access to capital: Financial institutions don’t typically work with small
retailers, as they mostly trade in cash and have no financial footprint to determine
their creditworthiness. Assigning credit scores is difficult, and extending loans is
risky.
7. Price fluctuations and supplier issues: Fluctuating prices of goods and
inconsistent supplies from suppliers can disrupt the availability of products and
impact the shop’s revenue.

3.3 MARKET TRENDS FOR INFORMAL RETAIL IN SOUTH AFRICA

1. Increased competition: The informal sector is experiencing significant growth and
competition from various players, including banks, telecommunications companies,
retailers, and FMCG suppliers. Fintech companies, like Yoco and iKhoka, are
emerging as key contenders, providing safe and convenient payment solutions
through easy-to-setup point-of-sale devices operated via cellphones with built-in 4G
cards.
2. Ecommerce momentum: Despite a high smartphone adoption rate among traders,
a majority (90%) have not engaged in online shopping before. However, ecommerce
is gaining traction in the informal sector with platforms like Yebofresh connecting
township entrepreneurs with high-quality goods and services. These platforms
enable traders to order, pay, and arrange returns, with added benefits like 24-hour
delivery and buy-now-pay-later options.
3. Collaborative ecosystem: Spaza shops are transforming into more than just
grocery stores by participating in a collaborative ecosystem involving partners from
aligned industries. Shoppers can access products and services through mobile
phone operators and fintech solutions, utilizing both digital and in-person channels.

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 4. Cash remains prominent: Many informal sector participants still prefer cash
transactions due to reservations about traditional banking services, citing high
transaction costs, inadequate protection against scams, and slow money clearance.
5. Stock management: A significant number do not maintain formal stock records and
buy stock “as and when needed” based on customer demand and sales patterns,
often planning around peak days like Fridays, Saturdays, and Sundays.

3.4 MARKET OPPORTUNITIES

A significant portion (58%) of the sample turnover in the informal sector falls within the
range of R5,000 – R20,000 per month, which exceeds the minimum wage and makes a
noteworthy contribution to South Africa’s GDP. The informal sector is largely driven by
consumer demand, and traders plan their stock based on what shoppers request.
While profitability is a consideration, affordability for customers takes precedence over
higher margins.

Retailers can enter the informal market by leveraging their buying power for cost-
effective products and using existing infrastructure like Click & Collect points and
fulfilment centres. This improves supply chain efficiency, a key need for the informal
sector, allowing them to capture a share of the R178 billion market.

4. THE MARKET
4.1 MARKETING STRATEGIES (4 P’S)
Southern Light Trading marketing strategy will be based mainly on ensuring residents,
workers and neighbouring estates know about their existence and offerings. Hence the
intention is to make the right information available to the right target customers. This
will be done through implementing a market penetration strategy that will ensure that
they are well known and respected in the industry.

4.1.1 PRODUCT/SERVICE STRATEGY

product and service strategy are as follow;
Product /Services Who By When
 Approach funders to purchase the required infrastructure to operate

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 more effectively and offer a better quality and convenient service Maria 01/10/23
 Conduct a shop layout for best movement and ensuring productive
layout of the facility Maria 10/10/23
 Obtain funding and purchase required infrastructure Sefa 15/02/24
 Create market awareness through the various strategies identified Maria 01/02/24

 Recruit qualified and experienced workers to run the daily operations Maria Ongoing

 Obtain the necessary certifications to operate at the identified

Maria 15/01/22
locations
 Undertake preventative maintenance to ensure the protection of
Maria Ongoing
facilities and infrastructure

4.1.2 PROMOTION STRATEGY

The promotional strategy will involve integrating advertising, events, personal selling,
public relations, direct marketing and the Internet, details of which are provided in the
marketing section below:
Advertising Who By When

 Place advertisement in newsletters and estate letters Maria 15/02/24

 Place advertisements in selected newspapers in the community Maria 15/02/24

 Design and print flyers x 2000 Maria 15/02/24

 Design and print 2,000 brochures Maria 15/02/24

Maria 15/02/24
 Launch direct mail campaign (500 letters p/m)
Maria 15/02/24
 Design and make-up signage boards x 2
Maria 15/02/24
 Design and development of a website for online shopping in the area
Personal Selling Who By When

 Implement a sales management system i.t.o. Maria 15/03/22

- Number of sales calls needed p/month
- Territory plan
- Categorizing clients to their potential
- Reporting on sales progress & results
- Motivating the sales force
- Measuring sales productivity
Promotions Who By When

 Offer sales ‘specials’ and promotion boosters Maria Ongoing

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  Hold competitions and specials Maria Ongoing
 Sponsor of T-shirts for township soccer teams close buy or garden
workers in the estate. Maria Ongoing

4.1.3 DISTRIBUTION/PLACE STRATEGY

This strategy will involve the following:
Who By When

 Customer to buy directly from the spaza shop Maria Ongoing

 Southern Lights will also offer deliveries directly to customers homes Maria 15/01/24

4.1.4 PRICE STRATEGY

The price strategy is determined by market related elements such as the price of Mielie
Meel, etc. The increase on the fuel price will also have an effect on retail prices. The
owner will carefully monitor large retailers’ prices and how it affects margins to ensure
prices are lower to that of retailers in the area.

4.2 TARGET MARKET SEGMENTS

Market segmentation is the heart of modern strategic marketing and as a result a
focussed marketing approach will be required for effective market entry. While
analysing the market the following market segments were identified as the people who
will be using the container retailer stores:
 Fairways Gardens Estate residents
 Estate workers
 Neighbouring estates around Fairways Gardens Estate
 Informal SME’ who resell outside the estate

4.3 TARGET MARKET STRATEGIES

The target market strategy will be based mainly on making the right convenience and
grocery items available to the right target customer. The owner will ensure that the
estate residents and the neighboring communities knows about the spaza shops and
all its offerings. The marketing will convey the sense of quality in every picture, every

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 promotion, and every publication. The market strategies to gain effective market entry
and to grow sales include:
 Commencing with a salesperson i.e. owner and employee will take responsibility for
market access;
 Posters throughout the estate and outside;
 WhatsApp group for specials and daily new stock;
 Brochures and catalogues to be distributed;
 Google and social media advertising;
 Fliers and handouts to create awareness;
 Social media marketing i.e. Facebook and Twitter accounts to inform people of
specials and announcements;

4.4 MARKET SIZE

The market size of this sector is estimated to be R178 billion – far larger than the
country’s largest retailer, Shoprite’s, R149.55 billion market cap. Tiger Brands, South
Africa’s largest food company, recently announced its intentions to tap into this market
by partnering with 130,000 spaza shops. The annual sales target of R2,250,000 will
give the business a less than 1% market share.

4.5 COMPETITOR ANALYSIS

Southern Light Trading Spaza shop is in an ideal position to further expand the
business and operate more effectively. Considering the closest competition is 10km
away. Thus, not only estate residents purchase from the spaza shop but also
neighbouring estates that don’t want to drive for quick convenient goods.

4.6 COMPETITIVE ADVANTAGES

The following competitive advantages have been created:
• Location of the spaza shop with closest competitor 10km away;
• Diverse range of products and offerings at the store;
• Branded facilities with sufficient awareness;
• Modern infrastructure with functions such as POS cash guard, etc;
• Price specials to attract residents at all times;
• Movement inside the store of such planning that the shop can take several people at
a time;

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 5. MANAGEMENT SUMMARY
5.1 OPERATIONAL STRUCTURE
The operation functions according to the following structure to allow a smooth process
flow and to optimise throughput at the centre.

5.2 MANAGEMENT TEAM

The management team will be made up as follow:
Maria Mashiane – CEO and Managing Member
Mrs Maria Mashiane hails from a village called Mmamadila at Moletjie District in the
Limpopo Province, where she completed her schooling. Due to lack of funding, she
could not study further and instead had to look for employment. Her first job was as a
general worker at KFC, where she worked for 7 years, 4 of which she worked as a
manager, until she resigned for family obligations. Her last place of employment was at
Metro Cash and Carry for 7years, where she started as a cashier and moved up the
ranks to the level of second line store Manager. She resigned from Metro Cash and
Carry in 2003 in order to start her own businesses in Pretoria. For 17 years she ran
several small businesses including a laundromat and tuck shop. Over the years, she
has created employment as well as mentored and supported 4 other small businesses.

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5.3 WORKFORCE
The spaza shop currently employs two permanent workers and intends to add
additional two workers with the upgrade of the business. Workers are trained and
developed by the owner, and new workers will be screened for skills shortages. Based
on the findings the required training will be identified and implemented.

6. MARKETING AND SALES OBJECTIVES

The marketing and sales objectives are to:
 Generate sales of R2,250,000 in the first year of implementing the business plan.
 Increase first year sales to R4,424,175 in year three.
 Generate an after-tax profit of R267,840 in year one of establishment.
 Achieve a 100% satisfaction rate from clients.

7. FINANCIAL PLAN
7.1 ASSUMPTIONS
The Southern Light Trading spaza shop is based on the following assumptions:
• The spaza shop is open daily from 7am to 8pm, 7 days a week. Closed on specific
public holidays throughout the year;
• Operating with an owner and two permanent employees and intending to create
another two permanent employment opportunities;
• The maximum potential sales are as follow:
 The estate consists of 500 households;
 Assuming the other neighbouring 2 estates consists of the same number of
households. It equates to 1500 households that potentially can buy from the spaza
shop.
 Conservatively including estate workers in the 1500 households;
• The average spend per household is R150 weekly;
• Thus, as a best-case scenario if each household purchase from the Spaza Shop
weekly, its 1,500 x R150 = R225,000 per week.
• Operating 52 weeks of the year the maximum income potential is R11,700,000 per
annum;

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7.2 SALES PROJECTIONS
The income scenario at different capacity levels is anticipated to be as follow:

With the right marketing efforts and awareness creation these sales targets can easily
be achieved. The business at the moment generates just over a million per annum;

7.3 EMPLOYMENT CREATION & COST

The following employment opportunities will be created with expansion of the business
and upgrade of infrastructure.

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 7.4 PROJECTED EXPENSE STRUCTURE
The projected expenses for the spaza shop are outlined in the table below. Expenses
are projected to increase by a market related 6% annually.

7.5 PROJECTED INCOME STATEMENT

The table below provides an overview of profitability based on the assumptions. The
income statement considers the interest paid on a loan of the entire establishment cost.

An after-tax profit of R267,840 is projected for year one increasing to R2,199,313 by

year five.

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7.6 BREAK EVEN ANALYSIS
The breakeven sales for Southern Light Trading will be achieved as follow:

Thus, the breakeven sales will be achieved at R1,630 in year one of expansion. This
represents a 13% capacity utilisation of the best-case scenario, therefore selling to 197
households weekly.

7.7 LOAN APPLICATION AND USE

The total project cost would amount to approximately R803,923 made up of the
following:

The capital and operational required funds will be obtained from NEF and/or IDC.

7.8 LOAN PAYBACK

The loan will be repaid over five years based on interest rate of 10 percent.

8. ADDENDUM A
The integrated financial statements including the five-year balance sheet and cash flow
projections are attached as Addendum A.

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9. ADDENDUM B
All supporting documents needed to apply for financing:
 Company Registration
 Tax clearance Certificate
 ID copy of owner
 Quotations
 CV of key personnel
 Company Profile
 Letters of intent

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