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BUSINESS PLAN FRAMEWORK

Guiding page This document provides the framework for submitting a business plan for GroFin assistance. Every entrepreneur will find him or herself at different stages of developing their business concept. Some may have a full business plan while others may just have started conceptualising their idea. Even if presenting your business plan in your own format, this guide should be used to ensure that all areas of the business have been covered and discussed. This document is not designed as a tick box, but as a guide to discussing, in detail, the most important areas of your business. By presenting GroFin with as much as possible of the information requested below, an assessment can be made to determine what assistance GroFin can provide and how advanced the entrepreneur is in developing their business and supporting business plan. Throughout the document there are notes in grey (mostly by way of questions) to assist the entrepreneur. These grey sections can be overwritten and the relevant business information should be inserted.

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Basic information Name of business Physical address Postal address Contact person Telephone Cellular Fax e-mail website 1 Business Description 1.1 Brief Overview

a) History: is this a new or existing business? If new, explain how the opportunity was identified. If existing, when was it established? Briefly mention the various milestones and business achievements. b) Describe the main business activity. c) Goals: discuss your key business objectives for the next three years. 1.2 Product and/or service description a) Detailed description: what products and/or services will be manufactured or sold? b) Existing customer behaviour: for each product and/or service, what products or services are potential customers currently using to fill the identified need? c) Expected change: will potential customers change from existing products to your products and why? What is required to convince them? 1.3 Location a) Discuss the physical location of the proposed business in terms of region, city, town and infrastructure (roads, communications, etc.), as well as distances from nearest main centres. b) Motivate the location choice in terms of current suitability with regard to costs as well as customer, workforce and supplier proximity. Motivate the suitability in terms of future requirements too. 1.4 Suppliers The first part (Table 1.4.1) of the suppliers section is to discuss ongoing suppliers (eg. raw materials and services). Use the table as a summary, but motivate and discuss each in detail. Table 1.4.1: Key ongoing suppliers Name Location Goods supplied % of total purchases

Experience and reputation: how long have you dealt with each supplier? a) Mention contract/agreement details with suppliers, if any, such as price, credit terms, delivery terms. b) What guarantees does the supplier offer for the products?

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Use the second part (Table 1.4.2) to discuss once off suppliers (eg. building contractors, equipment suppliers). Table 1.4.2: Key once off suppliers Name Location Goods supplied Value of contract

Experience and reputation, track record, references Agreements: a) mention contract/agreement details with suppliers, if any, such as price, credit terms, delivery terms, training, backup services, spares, local support and insurance. b) What guarantees (including delivery and buy-back guarantees) does the supplier offer for the products? c) Alternative suppliers: do you have any alternative supplier(s)? 1.5 Ownership structure Table 1.5.1: Shareholders details Name Shareholding Location %

Role / Cash Responsibility contribution

For any shareholders that have not contributed an equitable share of cash to the business, explain what their contribution has been. Discuss any proposed changes in ownership. Mention any salient features of the shareholders agreement, if any. If there are significant differences between ownership and management, mention the details of the signing powers and delegation of authority. 1.6 Legal considerations Using the table below, list all legal requirements to start and/or operate the business. Table 1.6.1: Legal requirements Name Description Requirements to (Expected) Renewal date obtain/maintain date of issue Company Registration Trading licence Operating permits and licences Customer certifications Tax registration Environment al permits Association

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registration Other crucial agreements that must be finalised

For each requirement that has not yet been obtained, discuss how far they are from completion

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2 Opportunity 2.1 Market overview a) Provide a brief overview of the industry and sector in which you operate. Include expected trends in demand, 2.2 Customer description Segment analysis is a powerful technique to understand the nature of your customers, and provides a basis to understand competition. Break down your various groups of (potential) customers by their distinct features. Pay particular attention to segment by the different purchase motivations. (ie. Children buy hamburgers for toys and fun. Teenagers buy hamburgers to socialise. Students buy hamburgers for convenience.) Table 2.2.1: (Expected) Customer segmentation and concentration Segment % of sales Area

For each customer segment, discuss: a) Geographical area b) Typical spending on product/service: What are the customers currently spending on similar products or services to satisfy the need? Discuss payment methods and seasonal fluctuations of purchases c) What motivates the clients to choose that current product and service? d) Target Customers: Based on the identified groups of potential customers what percentage of these customers will support your business? 2.3 Competition After the above section has been completed, it is possible to discuss competition. Direct competition offers the same products/services, while indirect competition offers products/services that fulfil the same purchase motivation. (ie. Following on from the example above: Students can fulfil their convenience motivation by purchasing hotdogs or pizza. Therefore a business offering pizza or hotdogs is indirect competition to a hamburger store. Children may get toys and fun from the playing video games. Therefore, a nearby arcade or video game store is indirect competition) Table 2.3.1: Direct and indirect competition Name Core business Location Years in business Market share %

Motivate the choices of indirect competition thoroughly For each competitor, discuss: a) History, track record and success to date, as well as strengths and weaknesses. b) Marketing methods.

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2.4

Competitive advantage Motivate why your business will succeed. What will make it different or better than its competitors?\

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3 Marketing 3.1 Costing and pricing a) Cost Price: Discuss your calculation used to determine your cost of sales (per product department). This cost should include direct cost from the suppliers and all other costs up to the point where it reaches your premises (take account of the costs as b) Method of pricing: What is the selling price and how was it calculated? Please discuss these methods with your BDM if unsure. c) Margin: What is your gross profit for each department? Discuss the methods to calculate this with your BDM if not sure. The results of this section should match your financial projections. 3.2 Sales projections Unit sales: Explain how many units are expected to be sold per month and why you think that it is realistic, using history, expansion plans, finance required, capacity and market demand. Discuss any monthly/seasonal fluctuations in the sales. Sales values: Discuss the sales values of the business. Motivate this by linking with the different customer segments buying patterns Increase in sales: Motivate how you expect sales to increase over the short and long term? The results of this section should match your financial projections. 3.3 Marketing plan a) Briefly mention your marketing strategy. If you are unsure about the choices of marketing strategies, please discuss with your BDM. Explain how this strategy translates into action. b) For each customer segment, discuss the marketing method, including the frequency taken, the expected sales results and costs associated with each, eg: Advertising Promotion Display Sales representatives (fixed salary, commissions, resources required) This plan should support both your sales motivation, and match your financial projections.

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4 Operations 4.1 Key operational functions Describe how the business and its various departments will function. By providing sufficient detail in this section, it will motivate what additional staff, equipment, stock and capital improvements your business requires. A powerful technique to discuss the responsibilities of each function, is to describe the transaction cycle in the business, using tables such as below. This will assist GroFin to understand the details of your business and identify critical areas for prioritised Business Development. Ask your BDM for more explanation in applying this method.

Transaction cycle

Table 4.1.1: Transaction cycle

Activity When Person Resources/ Documents required Output document Document management Communication

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Stock management a) Are products manufactured or purchased? b) How will the business interact with suppliers to acquire raw material or products? c) What is the lead time in delivery? d) Stock control and distribution e) Discuss recordkeeping of stock, storage, safety stock levels and reorder points.

Marketing The marketing plan is already described previously. Now describe how this department will function on a day-to-day basis, including any after sales service, customer feedback processes and ongoing communication processes.

Manufacturing process If a manufacturing business, describe the manufacturing process in detail. Indicate the steps, technical process, time taken, skills required, quality control. Service process If a service is delivered, describe the steps and processes involved.

Administration Discuss the administrative process and requirements as well as the resources required. Accounting Describe the accounting requirements, documents to be used, capturing of information and financial controls/reporting. Environment, Social and Governance Describe any ESG systems you currently have in place. If unsure, please speak to your BDM for tools to develop this area of your business 4.2 Key personnel Discuss each key personnel (including active owners) based on the points below: Work history Previous business experience and knowledge Technical expertise and knowledge of the product or services you intend to offer Responsibilities Salaries and other costs to the company Recruitment plan for each unfilled position The salaries and other costs should be clearly identifiable in your financial projections. 4.3 Support personnel Table 4.3.1: Support staff Job Department

Wage

Filled/unfilled

Discuss the remaining support personnel:

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a) Job descriptions. b) Costs c) Recruitment plan for each unfilled position Make sure that the costs associated with your support personnel are clearly reflected in your financial projections. 4.4 Technology If applicable, briefly describe any new, unusual or key technology to be used. If the technology has been used before, give details of where and when. Mention why this technology is appropriate for the intended use. 5 Finance 5.1 Expenses List and discuss any overhead expenses that were not discussed above (eg marketing, personnel, key suppliers) These include: a) Insurance b) Depreciation\ c) Maintenance Mention monthly fluctuations/seasonality Mention any increases What are the estimated expenses of the business for the next 3 years? 5.2 Financial discussion Explain what the cash position of the business will be, how much cash it will require before it is producing positive cash flow, how long it will take. Discuss creditors terms, debtors terms 5.3 Finance required

Table 5.3.1: Funds required Description GroFin funds Own funds Start-up costs Land & buildings Plant & equipment Office furniture Vehicles Working capital Total Contribution %

Other funds

Total

100%

Give full details on what the amounts will be used for, as well as when they are required. If Finance is provided through Other funds, discuss who the financial institutions are, and their conditions of finance, including interest rate and term, as well as collateral and surety requirements. 6 Risks Discuss any significant risks that you foresee for your business Discuss the actions you will take to mitigate and reduce these risks

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Support beyond finance Please discuss specific details and areas you need assistance with your business. This can be areas you feel unsure about in the business plan, or actual problems you face in your business. a) Business description section b) Opportunity section c) Marketing d) Operations e) Finance f) Other comments

Supporting Documentation Attach and list any document that you feel could be useful to motivate any particular argument or that can contribute towards a better understanding of the business proposal. In particular, please attach: Copy of permits, contracts and/or agreements already finalised; Also, remember that the following is required in order to present a complete application: Audited and signed financial statements for the last 3 years; Up to date monthly management accounts since last year-end; Detailed CVs of key management; Signed and dated statement of personal assets and liabilities of all shareholders; Copy (certified or accompanied by original document) of each shareholders identification document; Detail of collateral available.

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