viva start-ups - by ben botes

When SHOULDN’T You Use a Sample Business Plan?

2012-02-01T16:52:00.000+02:00

If youthought that a sample business plan can help you in EVERY instance wherebusiness plan writing is required, you might be surprised to learn that itisn’t. There are certain situationswhere using a sample plan won’t give you the best results. Here are a few of those.

If the Investor You Are Approaching, HasSpecific Requirements

Often,investors will have a specific format or list of requirements that you need tofulfil when submitting a plan. If you veer off that list of requirements whenyou submit your plan, you run the risk of irritating the investor, and that’sthe last thing you want to do.

If you’reconsidering submitting a plan to any specific investor or VC company, you wantto make sure that you follow their requirements to the letter. Which means that even if you think yourawesome idea requires fifty pages to fully be explained, if they want ten,you’re going to need to whittle it down!

If Your Business Is Completely New and Unique

If yourbusiness idea is so new, and so cutting edge, that it’s never been done before,then you probably won’t find a sample business plan that matches it. You may, however, find one that’s similar, oryou could use a combination of a few sample business plans for complimentaryindustries to mix and match the sections you need for your own plan.

Alwaysremember that a sample business plan is a guideline – and that you can use morethan one to get all the sections you need for a particular business type. You don’t have to follow them religiously,and you don’t need to use only one.

If You Don’t Have An Idea Yet

A samplebusiness plan can do many things – but it cannot give you good ideas! Don’tstart looking for sample business plans, books on business planning, businessplan templates or anything else until you have a solid idea. For one thing, you won’t be able to find theright sample, and for another, it’s impossible to do the amount of researchnecessary to craft a decent plan if you have no idea what you’ll be doing!

If you’restill looking for ideas, you’d do better to look on business forums on theinternet, or even take a drive around your neighbourhood, to see what’smissing.

If You Don’t Feel Comfortable Creating Your OwnPlan

If you’resure you can’t create your own business plan, either because you can’t write,or you just don’t think you have the skill, then a sample business plan aloneprobably isn’t the solution.

Considerbusiness planning software, hiring a freelancer, or a business planningtemplate instead. All of those options will give you a little more help, andhelp to ensure that the final product is what you want.

Plenty of Business Plan Help and Tools

The goodnews is that there are plenty of business planning tools, tips andprofessionals out there, and no matter what your idea or your budget, youshould be able to find something that will help you create the plan that willkick-start your business.

Treat it asa process, start small and work at it steadily, and by the time you arefinished, you should have a business plan that will open doors for you!

Is Your Business Plan Ready?

2012-01-17T00:10:00.003+02:00

Writing a business plan is a process. It starts with an idea, which is followed by research, which is then turned into a draft, and refined, and so on. The whole process of writing a business plan can take months from start to finish, but the question most would be entrepreneurs have is: when do you know it is ready?

That is a tricky question. How do you know that you’ve written the best possible plan for your business idea, and that it will do what it’s meant to do – whether that’s help you to grow your business, or to secure funding.

Don’t Look At It for a While

When you finish your business plan, the urge will be to send it out immediately. Don’t. In fact, take a few days, and don’t look at it at all. The reason for this is simple: if you give yourself distance, and some space, between you and the plan, when you return to it you’ll have ‘fresh eyes’ and be much more likely to pick up any mistakes or omissions.

Have a Colleague or Friend Read It

Most of us have at least one colleague or friend who knows about business, and who we trust. Once you’re sure that your plan is about ready to go out there into the world and act as the ambassador for your idea, you should have them read it. Letting someone who knows nothing about business read your plan won’t help, but having someone with experience and hands on knowledge take a look can help you to identify problems you may need to address.

Ask Your Accountant to Read It

Another great way to test how ready your business plan is to go out into the world is to have your accountant read it. Not many people know the business of business better than they do, and they’ll be able to advise you about any legal or financial issues in your plan that might need to be addressed.

Find a Business Incubator

Most areas have at least one ‘business incubator.’ These are usually programs that are run by the government in your area, or by banks or financial services organisations. These incubators are designed to help entrepreneurs to take the leap from idea to enterprise, and very often, they employ business plan experts to assess business plans and advise entrepreneurs.

If In Doubt, Get an NDA

Reading all of this, you may be worried that sending your business plan out into the world could lead to your idea being stolen by someone with fewer scruples than you thought they had. That’s a very real worry, but you can get around it.

Speak to an attorney about drawing up an NDA or Non Disclosure Agreement. This is a document that you can have people who read your plan sign, which legally binds them not to share your idea with anyone else. If you also have a patented product, or another form of intellectual property, you should have no worries.

Don’t Try To Do It Alone

The important thing to remember is that most of us feel a little lost when we’re writing our first (or second or third) business plan, and you don’t have to do it alone. Speak to the people mentioned in this article, or to a mentor or even your bank manager. There are people and companies out there who CAN help to make your business plan perfect, but you have to ask first!

The Biggest Mistakes New Business Owners Make

2011-10-19T13:21:00.001+02:00

When youstart your new business, you’re probably feeling all kinds of things. A sense of achievement that your new businesshas gone from idea to reality. A senseof excitement about the potential your new business has. Most people even feelfear, because starting a new business is very much a leap into the unknown!

However,knowing what the most common mistakes are that new business owners make canmake all the difference. After all, thefirst two to five years are the most important in any new business’sdevelopment!

Over Confidence

There’severy possibility that your new business is based on a groundbreaking idea. Every business has the potential to becomethe next big thing. But don’t bank onit. It’s better to underestimate your chances, than to become over confidentand complacent.

Burning Out

It’s truethat to make your new business a success, you’re going to have to devote a lotof time to it. However, while putting in a few extra hours a week can be a goodthing for your long-term success, working too hard, and burning yourself outisn’t.

Make surethat you schedule at least some genuine down time during the week. Your newbusiness is important, but it’s not everything, and if you don’t have some timeto rest and regroup, you won’t be giving it the full energy it deserves!

Growing Too Fast

Growth isgood for a new business, right? In most cases, that’s true. However, when yougrow to fast, and overtake your capacity and experience, you set yourself upfor big trouble. Even if it’s tempting to take on that huge new contract, youneed to remember that you might be growing faster than you are capable ofkeeping up with.

It’s betterto turn down a huge deal, and keep growing steadily, if a little slower, thanit is to take something that you can’t cope with on, and lose everything in theprocess.

Not Having Fun

There areprobably many reasons that you started your new business, but one of them isprobably because you want to have a little more fun than you had on thecorporate hamster wheel!

Try not toforget that starting and running a new business is supposed to be fun, and it’sup to you to remember that you’re doing something you love!

Spending Profits

There areno new business owners out there who dream of driving their ten-year-old car,entertaining at home to save money, or forgoing a holiday so they canrecapitalise, but that’s exactly what you should be doing when you own a newbusiness.

Yes, youshould enjoy the fruits of your labours, but at least for the first few years,you should get used to living frugally, and putting the majority of yourprofits back into your company. It may take a little longer for you to get theflashy car, and enjoy the perks of being an entrepreneur, but it is far morelikely to result in long-term success.

There’s Nothing Common About Common Sense!

Turning anew business into a successful business is a careful balancing act. It takes alot of common sense, in addition to hard work and business acumen, but the goodnews is that if you avoid the most common pitfalls, you’re far more likely tobe among the new business owners who have the plush offices and the fancy cars– in a few years time.

Even ifyou’re not cautious by nature, you need to treat every business decision asimportant, exercise restraint, and make sure that you stay focused andenergised. Too many new business owners don’t, and that’s a big part of why sofew entrepreneurs succeed the first time around!

My advice for young aspiring entrepreneurs? Go for it.

2011-10-04T16:12:00.000+02:00

"If your idea is so great, why haven't you committed to it? Why should anyone invest and risk my money, if you're not even fully committed?" anon investor.

With millions of people every day thinking of new ideas, lying awake at night with the thoughts of what could be and how life could be different, the real difference between those who dream and those who do is the action element. Whether your action is successful the first time round is in many ways beside the point. The key to any success ever achieved is that an idea was set into action and that a high level of commitment supported that action.

Where does this leave you?

If you are a young entrepreneur you have likely wondered how to get your idea off the ground. How and where do you start? Will your concept even be marketable? Will you fail? How much risk is involved and what can you do to reduce that risk?

These are some of the questions I faced when my co-founder, Jennifer Hymann, and I were launching Rent the Runway two years ago.

Sure, entrepreneurship is intimidating, but the reward is not just in building a successful company; it is in the lessons and growth you acquire every day just by doing, trying — and yes — failing. Here are some strategies to transform a simple idea into a viable, revenue-generating business.

1.Test the Marketplace

When you have an idea you are passionate about, get out there and test it with your consumer. Be open to feedback and honest with yourself when you need to tweak your concept or go back to the mat entirely. Writing a business plan is a waste of time, in my opinion. Focus efforts on casting a wide net and speaking to as many people as possible about your business concept. In my case, my co-founder Jenn Hymann, and I talked to women about renting dresses and watched our consumer interact with our product through a series of tests. We purchased dresses at retail and set up a pop-up shop at a Harvard undergrad dorm to test our idea. Taking risks (and yes, even failing) is part of entrepreneurship, but each test you do mitigates some of the risk.

2.Show by Example

By testing the marketplace effectively you will obtain data you can present to future investors. You have to take into consideration that these investors may not personally relate to your concept and that you must find ways to engage them. One way is through videos, customer testimonials and data from marketplace trials. Using these mediums, we were able to convince investors to partner with Rent the Runway, even when we were pitching our concept to a room full of men.

3.Build a Team

Find people to work with who compliment your strengths and weaknesses. Part of being a successful businesswoman is recognizing what you do well and where you need support. Having a partner whose skills complimented my own was the first key step for me. Beyond that, we realized we needed to build out a team that brought expertise in technology and fashion, since neither of us had a background in either. As important as it is to build your business with people who specialize in areas crucial to your business success, equally important in the early stages is hiring well-rounded employees. In the beginning phases of a startup your team will need to wear many hats and tackle unanticipated challenges, so a “roll up your sleeves attitude” is essential.

4.Realize that “No” means “Not Right Now”

A big part of being an entrepreneur is becoming comfortable with hearing the word “no” and having the creativity to adapt your idea to overcome any issues. I’ve learned that “No” usually doesn’t mean “no,” it just means “not right now.” In starting Rent the Runway we heard a lot of “no’s” and that just encouraged us to stay motivated to rethink, tweak and keep testing our concept. There are lots of ups and downs in entrepreneurship as not everyone will love your idea, but each negative response is an opportunity to learn and adapt. A great partner and a supportive team can also be helpful in getting through what are sure to be some challenging times.

Why Free Business Plan Templates Aren’t Always a Good Idea

2011-10-04T15:05:00.000+02:00

When you’re looking for business plan templates, you’ll probably come across umpteen sites that offer free business plan templates, and if you are like most people, you’ll probably be sorely tempted to try them. After all, free is most people’s favorite price range!

However, while even free business plan templates can be useful when writing a business plan, they may not be the solution to all your business-planning problems.

Here are just a few of the reasons why you should think twice before you choose a free business plan template.

Accuracy

When you pay for business plan templates, or software, you’re dealing with a company, who employs professionals to ensure that their business plan templates and software is free of any possible errors. They spend time and money on research and development, to make sure that they business plan templates and tools they offer are as accurate as they can possibly be.

When you use paid for business plan templates, you can also query the accuracy of the template you are using, which means if you pick up a discrepancy, it can be repaired.

Content

Free business plan templates do not always contain all of the information you need to include in yours. Since leaving important information out of your business plan could be the thing that sinks your hopes of finding funding, that means that when you use a free business plan template, you still have to check, manually, that you have included everything necessary in your plan.

That is not necessarily a bad thing – if you have the time to go through the business plan you have created using a template, but it is something you might want to bear in mind.

Relevancy

There are many things to consider when it comes to the relevancy that you get from a business plan template – whether it is a free one or a paid for one.

First, there is the question of whether it is geographically relevant. Most parts of a business plan are the same around the world, however, there may be specific legal and other requirements that are geographically relevant to you, and not in the template you’re using (or vice versa.) Again, regardless of which template you use, you will need to ensure this.

You will also need to ensure that the business plan template you use allows you to convert the financial sections of the plan into your local currency, or the currency you plan to use in your business plan. The numbers may not change, but it will look unprofessional if you do not even have the right currency symbol on your plan!

Finally, there is the type of business you are writing a business plan for. There are plenty of generic free business plan templates out there, but in most cases, having a business plan template based on a business idea that most closely matches your own is a much better idea, and easier to use!

If you can find a business plan that is as close as possible to the business you are planning to start, you will be able to modify and alter it quickly and easily.

What is Best for You?

If you need to write a business plan, and don’t know where to start, and if you don’t have the budget to spend on business plan software or templates, then free business plan templates can be a great thing.

However, you must bear in mind the old saying ‘you get what you pay for.’ A free business plan template is a great tool, but it still requires a large amount of input from you, if it is going to give you the results you want. If you can afford to buy a high quality, tailored business plan template, then you will have a solution that will save you time and frustration – but either way, it’s up to you, and your needs and circumstances.

Do You Need Business Plan Software?

2011-09-26T17:46:00.000+02:00

When you are faced with the task of writing a business plan, you are going to get a lot of advice. Some people will give you links to websites (which may or may not have helpful information), some will suggest hiring a professional, and others will tell you that business plan software is the way to go.

If you are wondering whether you need business plan software, then this article should help you to decide.

Have You Written a Business Plan Before?

Plenty of people who have written business plans before still use business plan software – it is a great tool, and it speeds things up. However, you also need to remember that while they choose to use business plan software because it is convenient, writing business plans is a lot like riding a bicycle. If you practice enough, you get the hang of it, and then you never forget the tricks!

However, if it’s your first time writing a business plan, then business plan software becomes more than just a tool. That is because the first time you write a business plan is scary, confusing, time consuming and frustrating! Either you can use that as a learning experience (if you have the time), or you can use business plan software, and take a little of the ‘learning’ out of the equation!

Do You Have Time to Do It Yourself?

Writing a business plan yourself, from scratch, is always possible. However, it takes time. You would be surprised at how often would be entrepreneurs mention their idea in passing, and are asked for a plan. That is great – when you have one – but if you have not finished (or started) your plan yet, putting one together in a rush is daunting, to say the least.

If you do not have the time to spend the weeks or months involved in creating a business plan from scratch, and polishing it to the best it can be, then it may be an idea to use business plan software, and take some of the time consuming, frustrating bits out of the equation.

Are You a Procrastinator?

Often, we spend our time in an endless loop, gathering information, brainstorming ideas, and planning our business plan. So much so, in fact, that we never actually get to writing the business plan itself!

Because business plan software makes the business planning software a logical, chronological process, it makes it infinitely harder to put off writing your plan, because you’re too busy preparing to write your plan!

Does Writing Your Plan, or Your Financials, Scare You?

Many people (most people who write a business plan in fact) are worried about writing their plan, doing their financials, or both.

Business planning software takes the guesswork out of writing a business plan, which takes the fear out of the process. If you use business plan software, you really only have to put the information asked for in, and you will get a professional, correct business plan out at the end. It is like having an accountant and a business expert on call, all the time.

Business Plan Software Can Help Most Entrepreneurs

The truth is, when it comes to the question of who business plan software can help, the answer is most entrepreneurs. If you are in any way unsure of what should go into your plan, or how, or if you need a little help, it is a cheaper, effective answer to the problem.

Do some research, find a good business plan software that suits your needs and your budget, and you are guaranteed to have an easier time writing your business plan.

Calculating Start Up Costs for Your Business Plan

2011-07-14T14:02:00.000+01:00

If you’re in the process of writing a business plan, then you've probably already learned that a big part of your financials will rest on calculating your start up costs.

In this article, we look at what you will need to consider when calculating start up costs, so that you can make sure your business plan is as accurate as possible.

Business Registration

When you write a business plan, you will need to include information about the legal structure of your business, as well as information about other mandatory and optional registrations. Make sure that you include those costs in your estimate of start up costs, and remember that in some cases, you may need a lawyer or accountant’s assistance.

Research and Development

If you’re creating a new product, or refining one that you’ve already invented, then you will need to include the cost of R & D in the start up costs section of your business plan. This could even include the cost of market research.

Stock or Materials

If you’re creating a business plan for a company that will sell items that are already manufactured, or a company that will manufacture goods, then you will need to start off with stock or materials. Make sure that you include the cost of the materials or stock you will need to get started in the start up costs section of your business plan.

Premises and Equipment

Whether you’re renting premises, or starting your business from home, there will be some costs involved in setting up the physical infrastructure of your business. Include things like office furniture, equipment and tools, the cost of installing telephone and internet lines, and all the other equipment you will need. Also include any costs involved in securing, remodelling, or decorating your premises in this section of your business plan. Remember to include the costs involved in securing and leasing your premises here too, and that it may be several months before you actually open your doors for business, so plan accordingly.

Marketing, Advertising and Promotion

One of the most important parts of your business plan is the marketing plan, and when you’re starting out, a significant portion of your spending will be on advertising and marketing. Make sure that you include the cost of that advertising and marketing in the start up costs of your business plan. Include things like business cards and flyers, newspaper advertising, setting up a website, and anything else that relates to marketing your business here.

Staffing

Whether you run newspaper ads or use a recruitment agency, there are usually costs involved in hiring people to work in your company. If they’re going to be starting before your company opens for business, their first few month’s salary will also be a part of your start up expenses. Include all of those costs in the start up costs section of your business plan.

Cash, the Cost of Financing, and Your Business Plan

Other costs that you will need to include in your business plan’s start up costs include cash to have in your business account or cash register when you open for business, the interest or costs involved in financing your business, and the cost involved in preparing your plan itself.

A good idea, when you are calculating start up costs to include in your business plan, is to carry a notebook and pen with you wherever you go. Whenever you think of something else that you will need in order to open for business, write it down. That way, you should be sure to cover all of the costs you will encounter. Also remember that you should always include a little bit extra in the start up costs section of your business plan, because there will almost always be something you forget!

Low Cost Marketing Ideas for Business Start Ups

2011-06-07T12:24:00.000+01:00

If there’s one thing every new business owner knows, it’s that marketing and advertising are two of the most important expenses, and that without them; your business is unlikely to thrive.

The trouble is, for most entrepreneurs working to get a business start up off the ground, the amount of money you have in your budget is limited, and trying to cover all the costs is a juggling act worthy of a circus professional!

Because we know how hard it can be, to make sure your business gets enough exposure, and still to stay within your budget, we’ve put together a list of low or no cost marketing ideas for your new business:

Put your advertising on your car. No matter what business you’re in, you’re still going to have to drive around sometime. So while you’re building your new business, brand your car, and advertise your services everywhere you go!
Write an article for a local newspaper, trade publication, or magazine. Print ads cost money, but most publications are always on the lookout for great editorials, and you can usually include information about your business at the end of your article.
Write a press release. Even easier than writing for a print publication, you can write a press release about anything newsworthy that your business does, and submit it to online sites, free!
Get a website. You can register a domain for less than the cost of a take out meal, and with free website services like Weebly and Yola, hosting and site design doesn’t have to cost you anything.
Have t-shirts printed with your company information on them, and wear them wherever you go. Get your family and friends to wear them too, or donate them to a local sports team. Walking billboards make great ads!
Get involved in a charity organisation or event. Even if you only volunteer your time, newspapers often run stories about charities, and they’re a good way to publicise your company, and do some good.
If you’re marketing to a specific type of business, do some research, and find out who the people who make decisions at those businesses are, and then send them a branded gift and an information pack.
Start a blog, or create a social networking page or group. Whether you choose a social network like Face book, or a business-networking group like Linked In, you can target your message much more this way.
Join local business networking groups. Many of these are free to join, and put you in contact with other business owners, who might have valuable leads to trade with you.
Get involved in forums that relate to your business. No matter what you do, and how you do it, there are forums on the internet that will put you in touch with potential business partners, clients, and mentors. Getting involved, and including your company information is a great way to boost your profile, and get people interested.

The truth is, there are plenty of great, low cost ways that you can market and publicise your new business without breaking the bank. Whatever you choose to do, as long as you’re doing it consistently and well, and as long as you do something, every day, to market or advertise your business start up, you will get there, sooner or later.

Don’t think of marketing or advertising a new business on a tiny budget as difficult or unpleasant – think of it as an investment in your company’s future, and a way to exercise your creativity!

What Are Business Grants, and Are They An Option?

2011-05-19T17:24:00.001+01:00

Many small business owners out there have probably wondered what small business grants are, and whether they are a financing option for their new business venture. In this article, we look at what small business grants are, and how they can help your business plan to get funded.

What Are Business Grants?

Business grants are usually either from government, or from individual companies, usually as a part of a corporate social responsibility program.

Often, business grants don’t come in the form of cash, but rather in the form of equipment, tools, or other physical items that your business may need to get started. For instance, if you are planning to start a carpentry business, you might find business grants that will buy you machinery and tools that you need to start your business. There are also business grants that pay for specific training that you might need.

Who Qualifies for Business Grants?

Business grants are usually issued as a part of a social upliftment program, by government or businesses. That means that there are usually strict criteria about who qualifies.

In some cases, those criteria may be that the company is owned by a person from a specific group (BEE ownership for instance, or ownership by a woman.) Other criteria may be that the company will be operating in a rural area, where jobs are scarce, or that a certain number of jobs will be created, often for an underprivileged group.

Most companies and government departments that offer business grants will have their own criteria for selecting recipients, so you will need to contact each one individually, to find out whether you qualify?

What About Cash Grants?

As mentioned, in most cases, business grants won’t be for cash funding. That’s usually because the company or department that are offering the grant want to be sure that the people receiving them are genuinely committed to starting a business, and won’t use the funding for personal items!

In some cases, however, business grants are available to companies that have already received an order that they lack the capital to complete on their own. In those cases, you will need to provide proof that you have received a valid, irrevocable order, and some form of surety. You may also need to undergo a credit check.

Some business grants are also structured as loans, where you are required to repay the money you receive, albeit with a longer term, and relaxed conditions. Make sure that you find all of this out before accepting a business grant, to avoid nasty surprises later on!

Is It Worth It?

Getting a business grant is not an easy process – and with good reason. The companies and government departments who offer them want to be sure that they’re helping serious business people, rather than people who are just looking for easy money.

That’s also why business grants often come in the form of equipment or other items, rather than cash. However, while finding and qualifying for business grants can be difficult, and while you will probably not receive cash in your hand, business grants can be exactly the leg up that new business owners need.

So if you’re serious about starting your business, it’s definitely worth investigating the business grants that are on offer to your industry, area, race group or gender from government and big business. It might be just the boost that your business needs!

How to Start a Business

2011-05-19T17:04:00.000+01:00

If you sit at your desk every day, dreaming of being your own boss, and earning more money while also not having to work for someone else, then you’re probably just a few steps away from taking the plunge and becoming an entrepreneur. However, while most people have those thoughts, going from dreaming, to figuring out how to start a business is what sets true entrepreneurs apart from everything else.

The good news, if you’re wondering how to start a business, is that the process is the same for just about every business, in every industry. In this article, we look at the steps that will take you from dreaming to owning your own business.

1. The Idea

Every new business is born because of one thing: the idea. Without an idea, you cannot have a business. You cannot follow any of the other steps in this article, and you’ll be dreaming at your desk forever!

Business ideas can come from anywhere: they could be based on a need that you’ve identified, or they could be a brand new invention, product, or service. More often, however, business ideas aren’t breaking new ground. They’re based on existing products, services, or ideas. So if you don’t already have a business idea, think about what you’d like to do, and what kind of business you think would work well in your community.

2. The Plan

Once you’ve decided what your business idea is, the next step is to work on your business plan. That means doing as much research as possible, learning how to create a business plan for a new business, collecting ideas and information, and putting it all together in your own business plan.

A business plan is a road map to success, and something that every new business should have, so make sure that you devote enough time to crafting a well thought out and viable business plan for your business idea.

3. Finance

Once you’ve created a business plan based on your idea, you will have a good idea of what it will cost to start your dream new business. That should also give you an indication of the amount of capital you will need. Consider whether you will be self-funding or bootstrapping your business, or whether you will need to seek outside finance. Investigate the various financing options for your new business, and approach companies or individuals who can help.

Business finance is not always easy to come by, but if you want to start your business badly enough, and you have a great idea and a solid business plan, and you persevere, you should find a way to make it happen.

4. Hard Work

Once you’ve found the perfect business idea, written a business plan, and secured financing, the hard work really starts! Entrepreneurs are some of the hardest working people out there, and if you thought being your own boss would be relaxing and stress free, think again!

In fact, for the first few years at least, you will probably work harder on starting and building your new business than you ever worked for any boss! Of course, you will also be richly rewarded for all of that hard work when your business takes off, but prepare yourself for a long hard slog!

Every small business out there will follow the same basic steps from idea to organisation. The process may take a little longer in some cases, and you will certainly learn a lot while you’re starting your business. However, there’s no denying that owning your own business is one of the most rewarding things out there, so if you’re determined to be your own boss, stop dreaming and start doing!

Where to Find Help With Writing a Business Plan

2011-05-18T07:15:00.000+01:00

If you have a great business idea, you probably already know that you’re going to need a business plan. Whether you’re looking for funding, or you just want to start your business with a solid idea of where you are going, having everything on paper is a great place to start.

However, for the average entrepreneur, writing a business plan is not as simple as it sounds. If you need help with writing a business plan, then read on. In this article, we discuss where you can find the help you need, and what you can expect.

Small Business Incubators

There are several options out there when it comes to small business incubators, and many of them are government run, and therefore free to use.

Small business incubators are programs that are set up to help new business owners to start and run their businesses. Many offer assistance with writing business plans as a part of their service, and they usually have a team of experts on hand for just that reason. Nearly every city and town will have some form of small business incubator program, and you can usually find out more from your local chamber of commerce, or online.

Accountants

Many small business owners find that they don’t need help with writing a business plan, so much as they need help preparing financials for their plan. If you’re going to use your business plan to apply for funding, then you will almost certainly need a well-written, well thought out plan, including accurate financials.

Hiring an accountant to help you to write the financials section of your plan is therefore a good idea. Most accountants will have a good working knowledge about small business finance, and can help you to create a financial plan that’s well thought out and viable, so it’s often worth the expense!

Freelance Writers

If it’s not the financials you’re struggling with, but you need help with the actual writing of your business plan, then freelance writers are a great resource. There are freelance writers in just about every city or town, and you can even find them online! Most will be able to take your business plan idea and outline, and give it the polish it needs to impress investors, but remember, you will still need to write the plan yourself, so that it’s your ideas that go onto the final document!

Business Students

Another great idea, particularly if you are short of cash, and can’t afford professional services to help you write your business plan, is to approach business students at your local college or university. Most final year students have in depth business knowledge, and will be willing to offer you a consulting service at a fraction of what a professional would charge!

Business Planning Software and Templates

Possibly one of the simplest options, in terms of time and effort, when you’re looking for help writing a business plan, is to invest in business planning software and templates. These vary in complexity and functionality, but most offer some form of interface where you enter your business information and other parameters, and the software does the hard work for you.

Whichever option you choose when you’re looking for help writing a business plan, remember that this is probably the single most important document for your business start up. Whether you use it to secure funding, or simply as a road map to success, your business plan really can make or break your business. So take enough time, consider investing financially to make it as perfect as possible, and you should get the best possible result.

Do You Have What It Takes to Be An Entrepreneur?

2011-05-06T23:12:00.000+01:00

Just about everyone I’ve ever met has some sort of dream about quitting their day job, and launching their own business start-up. Some even go as far as drawing up a business plan, but many never take the final step towards becoming an entrepreneur.

A lot of that is circumstance, but in many instances, it’s because they just aren’t ready to be an entrepreneur. That’s because entrepreneurs – successful ones – have a very specific type of personality. In this article, we look at the personality traits and attitudes you need, if you want to succeed as an entrepreneur.

The Knowledge That Failure Is Not the End

The first thing most entrepreneurs have in common is the knowledge that failure is not the end of their business start-up dream, but a sign that they need to change their tactics or ideas.

Nearly every successful entrepreneur out there did not achieve overnight business success. Rather, they had a series of failures, which allowed them to perfect their idea and their business strategy, before they finally found their niche.

Energy and Excitement

There’s a reason why so many business advisors will tell you to start a business in an area that you love. The reason is that it takes an enormous amount of energy and excitement about your business start-up to make it through the first few difficult years of any new business.

When you talk to really successful entrepreneurs, you will almost always notice that their excitement about their business is real, and that’s what gives so many entrepreneurs the will to push on, regardless of circumstances. Some are excited by the idea of business itself, while others are passionate about their specific idea, but the fundamental rule is that you need excitement and energy to succeed.

Problem Solving Skills

If you thought starting a business was simple, and that just because you have a business plan, everything will go according to that plan, think again.

Successful entrepreneurs know that creating a new business is a series of puzzles and problem solving challenges, from juggling cash flow to figuring out new products, or how to break into new markets. Great entrepreneurs are naturally blessed with problem solving skills, which, combined with logic and reasoning (and a fair amount of imagination), let’s them find ways out of tricky situations.

Sales Skills

Too many people who decide to start new businesses, and become entrepreneurs, think that they’re not sales people. The truth is, every small business owner out there is a sales person, and they’re all selling, all the time.

Learn to love sales, and the process of selling, because for the first few years at the very least, a very big part of your job as an entrepreneur will be to sell your business, products, and services to the world.

The Ability to Live Frugally, and to Take Risks

Even if you do manage to find financing for your new business, or you’ve managed to save enough to fund your business start-up yourself, you need to realise that most small businesses can take years to become profitable. During those difficult first few years, you’ll need to be able to live frugally, and to pump as much money as possible back into your business, if you want it to succeed. So don’t start dreaming of fancy cars and other status symbols just yet!

Another key trait that entrepreneurs share is the ability to take calculated risks. Starting a new business is a risk all on its own, but identifying, and taking, the opportunities that come along the way often requires nerves of steel!

This list of traits shared by entrepreneurs doesn’t cover everything, and there are sure to be other traits and beliefs that you will need to cultivate. However, it is important to realise that a big part of your success or failure as an entrepreneur will be your own attitude, so start paying attention to how successful entrepreneurs think and behave.

Biggest Hurdles Any New Business Will Face

2011-04-28T10:51:00.000+01:00

If you are starting a new business, chances are, you are looking at the world through rose tinted glasses. It’s true – the prospect of ‘being your own boss’ and controlling your future is attractive. There’s no denying that. But there is also another side to that coin – one that most new business owners do not realise until they are committed to their start-up.

That is that there are plenty of hurdles that small business owners face. As long as you know what they are, and you plan for them, you will be fine, but in this article, we look at the most common hurdles new businesses face, and why they could sink your business.

Undercapitalisation

Probably the biggest hurdle that any small, new business faces is undercapitalisation. Even the best ideas cannot succeed if you do not have the funding to get them off the ground. Make sure that your business plan is based on the funding you have, rather than the funding you would like to have, and you should be able to get around this problem.

Competition

When you start a new business, you are always a ‘small fish’ in a big pond. That means that you are competing with established companies. The only way to get around this particular hurdle is to be better. Offer better services, or better prices. Have a broader product range, or add more value. If you are truly great at what you do, you will compete.

Burnout

When you are starting a new business, chances are you are doing it on your own, or with a very small team. That invariably means that you burn the candle at both ends, while you are working to establish your new business. Every entrepreneur and new business owner goes through this phase, but you need to be very careful that you do not push yourself too hard, and burn out before you reach the stage when you can afford to relax a little more! Remember that you have to have balance in your life, and try to make time for yourself too.

Too Much Growth, Too Soon

It is probably the biggest irony in the world of small businesses, but the fact is that too much growth, too soon, can sink your company as fast as too little growth. The reason for that is that even if you are making lots of turnover, rapid growth puts pressure on your cash flow, and without cash flow, your business cannot make it. Make sure that you plan your growth carefully, and do not overextend yourself too much while you are getting started.

Lack of Business Skill

The final hurdle we are going to look at, that many new business owners face, is a lack of business skill. Many new business owners are great in their field – whether they are plumbers or dressmakers. Most, however, know everything about their business, and not enough about business itself. A good idea, for anyone who is looking to start their own business, is to take a short course in business management. That way, you will know enough about business itself to get and keep going.

As you can see, there are plenty of hurdles that new businesses face when they are starting out. That is precisely what makes entrepreneurs such special people though. Not only are we great at what we do, but we also see those hurdles as challenges, rather than obstacles. Remember that every challenge your business faces has a solution – all you have to do is find it.

BBBEE and Your Business Startup

2011-04-26T16:03:00.000+01:00

Every business startup, in every country in the world, faces many of the same hurdles and challenges. Finding funding, writing a business plan, figuring out if there is a market for your products and services, and how to market to them, and getting your systems in place are just a few of the challenges that a business startup has to wade through as it goes from idea to company.

In South Africa, however, we have an added hurdle, for many would be entrepreneurs: BBBEE.

Broad Based Black Economic Empowerment, or BBBEE as it’s also known, was, as you probably know, brought in 2003/4 to replace the original BEE system implemented post 1994, as a mechanism for addressing economic inequalities. Several years on, it’s still in place, and looks to be a feature of our business landscape for some time, and if you’re planning to start a business in South Africa, it’s worth understanding how BBBEE works, and what you can do to make sure you can compete.

The Scorecard System

BBBEE works on a scorecard system, which is based on seven pillars of empowerment: ownership, management control, employment equity, skills development, preferential procurement, enterprise development, and socio economic development.

Under the new system, ownership and management account for only 30% of the overall empowerment of any firm. That means that even if your business startup will not be owned or managed by previously disadvantaged individuals, you can still claim points for your other empowerment activities. For instance, you could choose to hire staff from the designated groups, or you could increase the skills development of existing staff, or buy from BEE companies.

Individual sectors, such as construction, travel and others also have their own industry standards. For instance, contractors operating in the construction sector can claim points when tendering for ownership or management by women, or by people with disabilities. It is worth finding out if your industry sector has a specific code of practice regarding BBBEE, and where your company stands in terms of that guide.

Exemption

Another mechanism that government has brought in to ensure that all business startups have an equal opportunity to find their footing under the BBBEE legislation is an exemption structure.

Any business that has a turnover of R5 million or under per year is exempt from the BBBEE framework, although they might still need to obtain a certificate to prove that they are eligible for this exemption.

Qualifying small enterprises are business startups who have made it through their first few years, and have a turnover of between R5 and R35 million. These companies will have to have their BBBEE credentials verified by a rating agency, but they can choose four of the seven pillars of BBBEE to be rated on. That means that you can choose to exclude, for instance, ownership and two other criteria from your scorecard.

Generic enterprises are those with an annual turnover of R35 million or more, and they are not exempted from any of the assessment criteria. Once your business startup reaches this level, you will need to be reassessed on all seven pillars of BBBEE, in order to determine your score.

What Does This Mean for Your Business Startup?

What all of this means for your business startup is that if you are a small business, with a turnover of less than R5 million per year, you are automatically considered to be contributing to BEE. That makes you eligible to tender on contracts in the public sector, and to become a vendor to government and parastatals.

Since this is often a lucrative avenue for small businesses, it’s worth considering having your turnover verified, and your company certified. There are many ratings agencies out there that can do this for you, or you can contact the Department of Trade and Industry directly to find out more.

ABSA Backing Entrepreneurs with new Initiative

2011-03-24T19:05:00.001+02:00

A new initiative with the intention of stimulating entrepreneurial ventures and the backing of small business was launched today by ABSA Small Business. The initiative sees ABSA invest not only a large amount of money into new start-ups and business support to those with a viable business plan but also providing further help and advice to business owners looking to grow their businesses and employ new people. The small business sector is the largest provider of jobs in the country and this initiative has high hopes for businesses to start, be successful and employ more people.

South Africa has one of the highest unemployment rates amongst its peers and its time that small businesses are provided with better incentives for employing a larger workforce. Traditionally this has not been the case with small businesses often having a much higher incentive to remain small, even though the financial returns are far less attractive.

Called Opening Doors, the initiative not only seeks to provide financial solutions which will assist SMEs to open their doors for trade, but will also provide non-financial support to open doors or remove barriers which business owners are often faced with.

"Opening Doors wants to create a visible platform for the continued development and support of SMEs and to further mobilise and accentuate the entrepreneurial revolution that has already started in South Africa.

"SMEs are important catalysts for development, effectively addressing employment and wealth creation. A healthy SME sector is critical if we are to create the 5 million jobs government wants to see by 2020," says Bobby Malabie (Pictured right), Chief Executive of Absa Business Bank.

Opening Doors will be introduced to existing and aspiring SME owners by screening a documentary, Opening Doors, in Ster-Kinekor theatres nationwide at 08:30 on 29 March 2011 in order to reach the widest audience possible.

Malabie points out that the South African government has placed job creation firmly on the top of its agenda for 2011, calling on all state departments and the private sector to tackle the country's unemployment crisis.

To achieve this, a jobs fund of R9 billion over three years was established in order to finance new job creation initiatives.

"New jobs must be created, inspiring hope for the 40% of South Africans who either have no work, or have only infrequent work. SMEs have the ability to mobilise the sustainable growth of employment opportunities for job-seekers."

"With Opening Doors, we intend to encourage South Africans to open small businesses and create employment opportunities for the unemployed," says Malabie.

Research has shown that small businesses have moved from employing 18% of the South African employable population in 1998 to more than 60% today, supporting the notion that SMEs are vital to the future of South Africa's economy and are also strategically important with regard to job creation initiatives.

Absa research has also identified five attributes that are key to becoming a successful entrepreneur. The five stories featured in the documentary show how these attributes - curiosity, risk appetite, energy, adaptability and a sense of mission - contribute to a successful business and explore the expressed and unexpressed needs of entrepreneurs.

The small business sector does and will play a major role in not only addressing the employment issues but also to ensure steady growth in the country. Its time that both other Banks and the South African Government start to play their part also in providing entrepreneurs with the incentive to start and grow businesses that will the employ and train the huge potential in human resources the country undoubtedly has.

Start-up development and support in the year ahead

2011-02-16T19:30:00.000+02:00

Another week has gone and we are well into 2011. Last year is long gone and many of his have grabbed the new year by the scruff of the neck and once again decided to give it our 120% to ensure that this year will be the best one yet. Many entrepreneurs will have been optimistic at how 2010 ended of with business in general picking up well and consumer confidence steadily rising. This year will once again be full of opportunities for those who wants to make the best of it and if you haven't started yet, today as ever is the best and only time to start.

This week has flown by, but before it passes I want to share about an event put on this past Tuesday. It is a regular event for them called speed funding and business growth. For this particular event, prior to the speed funding sessions taking place, as ever we provided some valuable coaching a and support to both entrepreneurs with new business plans and those who are looking for growth. In addition we talked about entrepreneurship and what are the benefits and challenges presented by the region for startups. The panel was moderated by a number of high profile entrepreneurs in the area. The panel was started by a few words from Marc about his perspective on the province and economic growth. Areas of focus for economic development:

Attract established businesses to move to the area
Nurture existing businesses to further growth
Encourage and support new startup companies

Recent Economic Development Stats:

* 21% of businesses in province are entrepreneurial
* 4.49 startups per 1000 people in the province

After Marc’s quick introduction to economic development in the province, the panel members started by giving a few minutes on their background. Marc followed up the background summaries with two questions: “What were your keys to success as an entrepreneur in general and in this region?”

Synthia and Brian said their goal was to create an fun experience and escape in their stores. They said that for them it needed to have purpose greater than themselves and making money.

Mark Cleveland stressed the importance of knowing what motivates you as both an employee and employer. He also talked about how your startup should be aligned with your passions and should be something that you enjoy doing.
Michael Brown, as part of his goal to grow the region to the #1 place to start a business, focuses on helping the startups create an investible story for angel and/or VC funding.

All three commented on the regional benefits of having a great educational system, having great people who make great employees, and having a great quality of life in the community.

“What are challenges to starting a?”

Scaling your business is a challenge that requires two things:
          o Continued innovation and a push to improve
          o Focus to create and maintain structure and process
Knowing your market:
          o How do you fit into it and differentiate yourself?
          o How is it changing or shifting?
Finding the funding required for your business startup costs

So those are the quick highlights from the event, and the plan is to hold these events on a regular basis to ensure that momentum builds and more and more opportunities will be pursued. Hope to see you at the next event.

Business start-up costs: Be realistic and plan ahead

2011-02-02T18:06:00.000+02:00

With starting a business being such an exciting time period for the entrepreneur, small errors can often creep in, in the companies financial forecasts or business plan as many of the costs that may be incurred during the start-up and stage may be overlooked. Its easy to under estimate the amount of money you will be spending on research and development, marketing, staff, tenders, packaging, a website and the many other elements needed for your business to get into the market.

Another common mistake at this time will be the over estimation of sales revenue for the business. As the entrepreneur behind the idea you are obviously excited and are assuming that the market will be as keen on the product as you are. This will seldom be the case, and if you do all of a sudden find that you have under estimated your expenses or time to get to the market, and on the other side have over estimated your income potential then you will find yourself very quickly with a cash shortfall. This may result in having to go back to the bank or closing the business in some cases. So how can this be overcome. Apart from ensuring you have support in creating business financial forecast the are a number of other issues that may be useful to look in to:

One way entrepreneurs can avoid the underestimation of new business costs is by doing independent research. By simply taking the time out to research the various anticipated expenses for a new company, business owners will be able to educate themselves about the industry, any leading competitors, and how much will be needed to launch and sustain their start up. They also need to analyze the performance of similar products in the market and determine different ways in which the product can improve. Research can be conducted through visiting online entrepreneur sites and by reading small business and start up books. In addition, entrepreneurs can also speak to other business owners who have experience and success in the same field. If an entrepreneur does not have the time to conduct independent research, they are able to hire a professional who can do the research for them. For an average cost of R50 toR75 per hour (R5,000 minimum), many business owners can conveniently obtain any needed marketing information for their new business.

One very important component to consider when starting a new business is the process of new product development and the amount of money it takes to effectively create a product. Many entrepreneurs will agree this development process not only takes time and effort to execute but it can also be financially draining. During a new product’s development, an idea can be generated rather quickly. However, it is the concept development and testing phase that may take a considerable amount of time to complete. In this particular phase, entrepreneurs will be faced with the cost of producing their product. They may also need to invest additional funding into the product’s test marketing and technical implementation phase, which may require more specialized revisions before their product can be commercialized.

For more information regarding product and market testing, refer to New Business Marketing Strategies

Every new business should have an updated, well-detailed website that proudly introduces their company and its different products and services. Their website should be user-friendly and designed and maintained by skilled technical professionals. A company’s website development and maintenance is a necessary cost, especially if the company is interested in making additional revenue outside of the traditional in-store purchases. In addition, business owners need to consider other technological expenses, including computers and accessories with updated specialized software for their company. Website and technological expenses are essential in today’s innovative and technologically-adept society.

Another cost to consider when starting a business is office expense. This financial figure can encompass the combined amount of renting (or buying) office space, office furniture, telephone and fax lines, high-speed Internet access, office supplies, etc. It can also include license costs, down payments and surcharges, office utility bills, inventory, maintenance, and company-related miscellaneous expenses. Many entrepreneurs do not realize how important this expense can be in order to properly sustain a business, and that is the reason why this cost is most often overlooked.

Every new business should also be aware that in order to gain public recognition and paying customers, they will need to spend money on promoting their company and its products and services. Marketing materials can include anything from professional business cards and stationery; local, nationwide, and international advertising campaigns; online and in-store promotional offers; public relations, company flyers and brochures; Internet and telephone marketing, etc. Depending on the type of industry and the aggressiveness of a company’s public relations approach, this process can be very expensive.

Business owners need to calculate how much their exclusive salary should be during the initial years of start up development. Even though most entrepreneurs may choose a modest salary, they should take into consideration the cost of living, including rent or mortgage payments, car and gas expenses, food, clothing, and other personal costs that are needed to sustain themselves and their families for about one year. A founder’s living expense can certainly cost less than their overall start up business costs; however, its significance should be taken into account since most new businesses will not reflect any profit for at least one year.

When starting a new business, entrepreneurs should take into account the salaries and benefits of their employees. First, they should consider if they will be the sole operator of their business or if employees will work for them. If their business will encompass the assistance of paid staff members, then the business owner needs to determine the hierarchy of workers and the number of full-time and part-time staff so their salaries can be adjusted. In addition, they can also determine who will be qualified for receiving health insurance and other employee-related benefits. Employee payroll and benefits are just two of the many different costs needed for a start up.

Another very important expense to keep in mind is the monthly cost of small business insurance. Every new business needs different kinds of insurance in order to protect their company, personal assets, and paid employees. For many business owners, the type of insurance they choose is highly dependent on the nature of their business. For example, liability insurance can protect a business’ property, while worker’s compensation insurance abides by state-specific rules when enforced. In addition, if a new company has a great deal of assets, they may be inclined to purchase property damage or theft insurance. In addition, company owners and board members may even consider getting life insurance to protect themselves and their families as well as legal service insurance which will cover any legal or professional fees.

During the pre-start up phase and throughout a company’s progress, an entrepreneur will work with many collaborators (including attorneys, accountants, investors, writers, ad visors, etc.) in ensuring the successful launch and development of their company. Many of the fees these professionals charge do not come at a low cost. In fact, they are rather expensive to hire and sustain. For example, many attorneys can charge anywhere from a few thousand dollars to tens of thousands of dollars just for lease negotiations, patent, trademark and logo planning, and non-disclosure agreements. Accountants, on the other hand, can also charge just as much, especially since they are needed for financial guidance and company tax purposes. Entrepreneurs should never underestimate the need for these hired professionals since they are the only ones who can provide the necessary guidance to an entrepreneur during the very stressful time of starting a business.

To learn more about the importance of an attorney for an angel investment, please refer to Angel Investment

Every company should consider travel expenses in their start up costs. These expenses will usually cover any business-related training outside of the company’s center of operations. They can include any educational or technical workshops, seminars, or training for employees and founders. Depending on the number of employees, a company’s travel expenses may be equally as important as other company expenditures.

The predicted costs for starting a company is often underestimated. An entrepreneur needs to properly evaluate all the associated expenses that need to be paid prior to the launch of their new company. Once they are able to consider the different financial costs, these estimated values should be well-documented in their company’s business plan. Failure to properly record all financial projections can easily cost a business owner from obtaining the necessary capital from institutional lenders and potential investors.

In addition, many business owners apply the “break-even” analysis of marketing. This is a term that refers to the amount of revenue an entrepreneur needs to receive in order to cover all company expenses before making any personal profit. This predicted calculation can closely estimate the potential profitability of a product. Many experienced entrepreneurs widely use this analysis as a primary screening tool for any new business ventures. It is a proven fact that entrepreneurs who are able to successfully “break-even” shortly after the launch of their new business or product have a greater chance of achieving company success when compared to those who did not “break-even.” The “break-even” theory closely estimates the viability of a new business venture and is a theory all business owners should apply.

Once all fundamental costs are carefully measured and well-thought out, the entrepreneur can then find different sources of funding for their new business. If considering different sources other than personal financing, they should then attempt to convince a business investor their product, indeed, shows promise of making a substantial amount of profit.

Once these issues have been looked into and given careful consideration you can start your business with more confidence and any investors or banker looking at your business plan is likely to have much more confidence that you know what to expect and have done sufficient preparation for the business start-up process.

Time for SA Entrepreneurs to Take Advantage of Opportunities

2011-01-13T00:23:00.000+02:00

With the New Year in full swing and the recession fast becoming a distant memory its time for entrepreneurs and small business owners to get their sights firmly focussed on a great year in 2011. As many would have found during the challenging times past, it’s the entrepreneurs drive, innovation and determination which will decide whether the business succeeds. Whether you are starting a new business or growing an existing one, the future lies firmly in your hands. Business finance is already becoming more readily available and business support in South Africa is there for the taking for those who need it.

Malcolm Rees from Money Web recently interviewed Nico Jacob from ABSA's small business unit and spoke about exactly what will set small firms on the road to success in 2011. A number of issues were raised, so of which a little unexpected but still very worthwhile a read.

Diversified client base

"The SMEs that will have a strong showing are those that have diversified target markets", said Arthur Goldtsuck, who heads World Wide Worx, which researches the health of SMEs through its SME Survey.

Goldtsuck added that some of the most profitable SMEs during the recession where those that targeted not only consumers but also corporate businesses, other SMEs and government.

Consumers are still haggled by high unemployment, which sits at 25% and household debt levels around 80% of disposable income

Although the majority of SMEs primarily target consumers according to Goldstruck, "those that service only consumers will struggle for a diminished disposable income", he said.

Increased government spend in infrastructure as well as revivals in corporate spending in 2011 should create opportunities for SMEs to generate increased revenue through sub-contracting and outsourcing opportunities and a diversified client base will minimise risk resulting from fluctuations in marketplace demand.

Cash flow

Cash flow will remain a vital issue for small businesses in 2011, according to Xolani Meva, the Johannesburg regional manager for Business Partners, which provides finance and advice to SMEs.

The recession has affected not only SMEs but their suppliers and customers who have become both poorer and more nervous.

On the one hand SME suppliers are going to be less willing to offer stock on credit to small businesses or may demand a shorter repayment window while SME customers will be less likely to pay cash in advance for goods or services and may be a more risky debtor, according to Meva.

As a result SMEs may struggle with cash flow. Success in 2011 is going to require tight money management and strong accounting practices, reckons Meva.

He notes that if SMEs hope to secure finance from financial institutions which still consider the economy to be under an economic downturn and are thus nervous to dispense with cash, SMEs need to ensure that their accounts are in order and up-to-date and that they are able to provide potential lenders with convincing business plans that clearly demonstrate the potentials in their market place as well as their ability to capitalise on them.

And while SMEs may find it difficult to attract finance they could quickly become hampered by a burdensome debt book, according to Jacobs. He points out that small businesses must be very careful about crediting customers and other businesses with cash and that "a good collection strategy is essential".

Marketing

Marketing will be another key to success, maintains Jacobs who notes that as marketing remains important, word of mouth and direct marketing campaigns as opposed to expensive blanket campaigns, such as billboards and TV advertising should be the focus for SMEs hoping to penetrate consumer awareness.

"Websites, social media ... smart niche marketing and direct marketing", as opposed to "spray and pray" marketing campaigns are the way to go.

Companies that do well are likely to utilise social media, such as Facebook and Twitter to reach customers without incurring much expense he said.

Service

The "best advice" said Jacobs is for small businesses to make sure that whatever they do, they make sure they do it "exceptionally well".

The recession has acted as something of a "spring clean", he said, by flushing out many of the poorly managed SMEs but those that remain will be competing in tighter, more cash-strapped markets.

With less opportunities available Jacobs believes that SMEs should rather take on fewer contracts to serve those they have better.

This, he said, will ensure repeat business while enhancing the reputation of the business by word of mouth which should generate new, high quality, job offers.

There will still be plenty of weary investors out there so make sure your business plan is well thought out and your market research backs up the idea. The great thing is that consumers are gaining in confidence and competition is not nearly at the level that it was.

Write a Business Plan: Top Tips

2011-01-10T23:05:00.000+02:00

In a recent article about Business Planning, business plan software author Tim Berry talks about 10 very useful tips to help establish a successful small business. Putting these points into action will help and direct you as to how to go about your new business venture. Angel finance networks can also be found online to help and guide you along your path to success. As you develop your business plan, it's easy to make mistakes or leave out important elements. Here are a few of the most common business planning pitfalls and some tips on how to avoid them:

1. Create a vision. It's tempting to roll up your sleeves and plunge right into the details of your business: evaluating products, studying market segments, and sizing up your competition. Yet it's possible to get so caught up in the process of planning a business that you lose sight of what you're planning for. Before you get lost in the details, take a step back. Outline a clear vision and a coherent set of values for your company. Develop a mission statement and use it to define short-term goals and priorities. Once you have a clear road map for your business, you can plan your journey with more confidence.

2. A budget isn't the same thing as a plan. You can't create a solid business plan without a budget and a financial forecast. But a budget should be the product of all the other elements in your plan. If you don't have a clear picture of your industry, customers, competitors, and market conditions before you develop a budget, your numbers aren't likely to reflect reality.

3. Don't ignore your customers. This may sound obvious, but too many entrepreneurs assume they know exactly what their customers need without bothering to ask. Take the time to learn about your customers, and build your business plan around their needs and desires.

4. Don't shortchange the competition. If you assume your firm will be the only game in town or if you fail to take existing competitors seriously, you're asking for trouble. Your competitors can be a great source of information about what works and what doesn't.

5. Be prepared to take risks. Creating a business plan isn't about avoiding risk; it's about understanding and managing risk. That's why a good business plan anticipates possible challenges and includes a variety of scenarios for meeting those challenges. There's a difference between a calculated risk and recklessness, and your plan can help you make that distinction.

6. Get a second (or third) opinion. The most experienced entrepreneur can still benefit from a different point of view. Even if you're the only person involved in your business, find someone who can study your plan objectively and point out possible weaknesses you might have missed.

7. Expect the unexpected. Every business plan needs some wiggle room to allow for unexpected changes. Part of this involves creating budgets and marketing plans with some built-in flexibility; but adapting to change also requires you to accept that you might have to modify or even abandon business practices that worked well in the past.

8. Don't forget what makes you unique. A cookie-cutter business plan might help you get started, but it won't help you succeed. And while it helps to look at your competitors, don't model your business after them. After all, you're in business to beat the competition. Learn from your competitors' strengths, but also learn how to spot their weaknesses and use them to improve your own business plan.

9. What's the point? Building a business involves hard work and struggle. But it should also include a clear set of rewards, both for you and your employees. When you set goals in your business plan, include some concrete motivation that goes beyond the satisfaction of a job well done.

10. Don't skip the plan! Of course, the biggest mistake of all is failing to create a business plan in the first place. Planning is hard work, and there's no guarantee it will make your business succeed. But a good plan is still the best way to turn your vision into a realistic, coherent business.

Having a mentor that you can keep in contact with will help you and guide you. Don’t be afraid to make mistakes along the way and never give up on your dreams. With the current economic situation worldwide, many are looking to small business as the way to make a future for themselves and their families. We are now coming out of the recession and this is a good time to make that move and step out and follow your passions and dreams do what you love doing best.

Support for young Entrepreneurs

2010-12-15T18:23:00.004+02:00

It’s been a hell of a time to be coming out of school, looking for work. Only one if four college grads this year who applied for a job had one lined up on graduation day.

A fierce economic bust has burned up a lot of first hopes. But youth is resilient – not to say desperate – and a determined stripe of young Americans are simply making their own jobs. They are cleaning gutters, writing software, baking cookies, starting companies.

The roll-your-own road to work is not easy, but with alternatives scarce, many are trying. In South Africa the onus is increasingly being placed on graduates taking control of their own destinies, with work hard to find and successful entrepreneurs everywhere to see in the media.

But is this really the way to go? What after all do you know about starting and running a business when you have just left school or university? Interesting question many may say, seeing that many of today's most successful entrepreneurs; Richard Branson, Bill Gates, Steve Jobs, Face Book founder Mark Zuckerberg and many others not even completing their their education before concentrating on their business ideas and often succeeding.

So perhaps rather than criticizing and questioning the sanity of young stars we should support them and point them towards sources of help. Some sources of support for young entrepreneurs:

SA Business Plans - for business plan help

Business Plan Whiz - for business plan software

Shell Live Wire for entrepreneurial support

SAB Miller for entrepreneurial support

The South African Youth Fund for start-up support

And many others. If you run out of ideas, be creative, search on Google, contact you local youth development program or office, or contact us and we will be happy to help.

Should you take your business to a start-up incubator?

2010-12-15T17:42:00.001+02:00

With a number of start-up incubators now existing in South Africa to both help with business plan development, business finance and other start-up support services many entrepreneurs are asking whether going the Incubator route is the right solution of their business.

I thought it may be useful to share this very interesting case of a entrepreneurial team going through the same decision process of whether to take on the help of an incubator.

Three years ago, I brainstormed an idea with a couple of friends for Foodzie, an online marketplace for artisan foods that would let home chefs and small food producers market directly to consumers. We knew we were onto something, but we were recent college grads in Greensboro, N.C., and didn’t have the funding or connections to launch the business.

So we decided to apply for TechStars, a start up incubator that provides mentorship and seed funding to innovative early-stage tech companies. We were accepted, but the program required us to uproot our lives, re-think our idea, and give up a stake in our company. Despite these sacrifices, I’d do it all again in a heartbeat.

Getting picked

When we came up with the idea for Foodzie in the spring of 2007, we knew we needed help getting it off the ground. My partners — my fiancé Rob and close friend Nik — and I had the technical skills to build the site, but we didn’t have enough money to devote our full-time efforts to the company. Moreover, there was no real tech community in Greensboro to help us secure funding.

We found out about TechStars through one of their mentors, Ben Casnocha, who gave a presentation on entrepreneurship at UNC Chapel Hill. We were excited that they offered young entrepreneurs like us a combination of mentorship and connections to venture capitalists. But the program was also highly competitive: They accepted only 10 start ups out of hundreds of applicants.

So we submitted an application and then, to better our chances, we flew out to their headquarters in Boulder, Colo., to meet the directors at their “TechStars for a Day” conference. The face time, plus weeks of following up to show that we could execute our ideas, impressed them. They selected us as finalists, we survived several rounds of interviews and then made the cut.

Going all in

We knew that Foodzie’s future wasn’t in North Carolina, so when we moved out to Boulder for the two-month program in the summer of 2008, we decided to move for good. It was a hectic time — everything seemed uncertain. But we were confident that TechStars would help us work out a plan.

However, once we arrived in Boulder, the intensity of the program immediately overwhelmed us. The residency progresses in three phases — development, execution and pitching — each of which is as disorienting as it is helpful.

In the first phase, all 10 participants must sharpen their ideas. Mentors and other founders repeatedly questioned our ideas and challenged our basic assumptions. One of the founders, David Cohen, even joked that some of us were there in spite of our ideas.

Their goal was to force us to refine our business idea or come up with another one, which forced some companies to trash the first idea altogether. We all suffered what is known within the program as “investor whiplash.” But the approach worked. Our core concept stayed the same, but we developed a more comprehensive plan, with more ideas for generating revenue.

In the second phase, we devoted our time exclusively to executing our newly polished idea. We spent 16-hour days building the site and gathering feedback from our mentors and the other program participants. Finally, the third phase was about perfecting our pitch to funders. I hated public speaking. But we rehearsed our presentation about 100 times, so I had no problem on Investor Day, when 400 venture capitalists arrived to listen to our pitches.

Getting funded

At the start of the program, TechStars gave us a small amount of seed funding — $6,000 per founder, so $18,000 total in our case. It wasn’t much, but it was enough to allow us to focus on Foodzie full-time for several months. In exchange, TechStars took six percent of our equity. It may seem like a large stake for the size of the investment, but was worth every dollar.

The instruction we received from our mentors and peers paid off almost immediately. That October — during the height of the recession — we leveraged the connections we had made to raise $1 million in venture funding. We put that money to work to complete our marketplace, hire staff, contract with more than 500 food vendors and garner hundreds of press and blog write-ups.

I’m certain that we would have found a way to launch Foodzie without TechStars. But I bet we’d still be in North Carolina struggling to get it off the ground if we hadn’t gotten the support of such a collaborative, mentor-focused startup community.

While working at a specialty food shop, Emily Olson was inspired to found Foodzie by seeing the quality and quantity of products that never made it on the shelves.

As told by Milly Olson, Co-Founder, Foodzie.com

So from an entrepreneurs perspective there are a number o issues to consider. Contact us for information on the various incubator services available in SA and if you have any reservations about taking the next steps.

Business Succession Planning for Entrepreneurs

2010-12-13T23:22:00.000+02:00

A succession plan is an integral part of your overall business plan document. It will clearly map out what must happen for you to exit the business—how and when you choose.

Putting a formal succession plan in place will help you:
• Survive changes in ownership and continue as a successful entity
• Identify and address family issues before they become disagreements
• Minimise tax liabilities and maximise return
• Ensure an orderly transfer of control and competencies
• Prepare the business and future leadership for transition

Development of the next generation of leader is a paramount task. "It is instructive here to recall that Noah started building the ark before it began to rain." Prior planning prevents poor performance. Without the proper methodology being utilized to prepare for personnel turn-over or unavailability, the corporation can be sent into panic hiring, can fail to continue to implement strategic plans because of the loss of a key individual, and multiple other pitfalls because they were not ready.
Short Term Needs

Planning must account for short time frame notification items. What does the company do when two executive VPs are killed in a plane crash? Who has been groomed and is ready to be "acting" in their place until they can be either ramped up to the permanent replacement or until an executive search reveals the best candidate? When a top executive resigns and moves to a competitor, has the company already instituted a program to ensure that individuals know that strategic plans, customer accounts, and other vital critical business information is in fact the exclusive property of the company and had these key individuals sign off on non-disclosure agreements? If they had not done this prior to hiring the defecting manager, are they prepared to ensure that incoming key personnel are required to affirm their loyalty in exchange for the position?

Mid-Range Needs
Personnel will retire. The text gives the example of GM and their planning process. Any company that is not preparing a like plan for grooming and testing the capabilities of personnel who may be tapped to be the top executive must seriously consider how prepared they really are to do business. Failing to plan is, in effect, planning to fail.
Retirements with long lead windows give companies ample time to try people in the proposed position, to be more closely mentored, or to be given charge of substantially more responsibility to see how they are able to handle the situations that they will be confronted with when they are given the nod.

"Organizations that understand the immediacy of the baby boom exit and thoughtfully prepare for it will be in the best position to achieve unmatched success." The questions businesses should be asking themselves to prepare for the coming demographic change. Some of them are:

What are your company's demographics (age, gender, position, years in position and anniversary date)?
What are your company's retirement policies? Is early retirement encouraged or discouraged?
What mechanisms and programs must be put in place now to capture key competencies and critical work knowledge of employees who will be retiring?
Will your organization need to increase its reliance on new immigrants?
If your organization is offshoring, what is the age breakdown of your overseas partners?
Will your offshoring partners face a labor shortage that may impact their ability to provide services?

Others also point out that businesses need to position themselves to deal with the needs of an aging population. There may be a need for unique skill sets and competencies, as well as a need for new or modified product designs to be marketed to the aging population. These issues tie back into business continuity planning. To continue to be competitive in the future,
businesses have to prepare for the shifting change in the average age.

The Process
The process of succession planning entails assessing what positions are critical to have a succession contingency plan. The positions are assessed, and then the skill sets of the candidates that could fill these positions are assessed, factoring in the time frame that would be required to get them up to speed for the position. A training program must then be implemented to ensure that there is progress in bringing these individuals closer to a more immediate insertion rate in case a planned position turns over. This will ensure a more seamless transfer for the person in waiting and provide a measure of corporate stability in a challenging time.

Our Four Phase approach to succession:

Phase One:
Determine the exit timing and requirements of key stakeholders
• includes Succession Needs Analysis
• Interviews with key managers and family members

Phase Two:
Prepare the business for a smooth succession
• Includes detailed analysis of current state of business
• Action plans for preparing the business for succession

Phase Three:
Research and consider all viable succession options
• Covers all viable options: legal, funding &

Phase Four:
• Select the preferred options and develop an implementation plan
• Provides a formal written succession plan

What ever the level of your business plan, using the latest in business plan software will ensure that you get the succession planning element of it right. With business finance increasingly hard to come by and competition being increasingly fierce, getting every element of your business ready for what the future may hold is now more important than ever.

How to write a small business plan

2010-12-12T20:29:00.000+02:00

Its important to realise that business plans will often be different depending on the purpose of the plan itself. If writing a business plan for a small business for instance, both the scope and resources involved in the setting up of the business will be vastly different from a growing or large business for instance.

In a recent article written by David Bond, he discussed writing a small business plan, when going into your own venture. He deals with the several areas of writing your business plans. It is important to go into a business venture with a clear direction and knowledge of your targeted market. It is important to familiarise yourself with what business plan software is available on the market. Writing your own business plan is not that difficult and can be done without having to lay out excessive amounts of money on a professional business plan.

If we look at the what David Bond says in his article on writing a small business plan there are a number of interesting points to note.

A plan for your small business is useful if you want to focus yourself and get an overall picture of what you have to do in order to build your enterprise. On top of that, a good business plan is an absolute must if you want to convince institutions or individuals to loan money or invest in your business. One way to organize your business plan is to compose it like an informative news article, explaining the "who," "what," "when," "why, and "how" of your business.
Who are you?
Write about your background and previous experience in your field. Tell about your notable accomplishments, and about your partners and staff. If your company has been in business for some time now, then write about your "track record." Explain what your company has already accomplished and give an idea of how it stands in relation to competitors in your particular field of business.
What are Your Products or Services?
What are you producing or what are you going to produce? What are your products or services? What kind of revenue will these activities be bringing in or what is the expected range of revenue once the products are launched? Answer these questions giving a complete picture of the principal activity that you are engaged in or will be engaged in during the timeline of this business plan.

When Will things Happen?
If you have a new start-up business, this section of the plan will allow you to explain the steps that are needed to set-up your business and make it fully operational. How much time do you need? When will the business be up and running? If you are have an already existing business, it is useful to place somewhere in the plan a list of targets that you want to achieve and give approximate dates as to when these targets can be reached.
Where is Your Business?
Where are you located? Do you work at home or do you have business premises? If you have a business location such as a store or factory, then explain about the size and capacity of this establishment. What is the business climate like in your area? Are there significant competitors and what are your prospects of competing in this market? Answer these questions as best you can and give yourself and would-be investors a clear picture of where your business is situated geographically and with relation to your overall market.
Why are you in Business?
Explain why your particular enterprise, product or service is needed. What can your add to the already existing area of business that your are entering? What need are you going to fill? The answers to these questions are particularly important for investors looking for opportunities in emerging businesses and emerging markets.
How will it all Happen?
Your sales and marketing plan should be outlined in this section. Explain how you intend to establish your product or service and what steps you will take to create or expand your customer base. How will you finance the start-up and/or expansion of your business? Explain the source of your funds whether you have existing loans or liabilities. How much money do you need to raise in order to get realize your overall plan for the launching or expansion of your business? Explain how you are going to translate your business idea into a living reality.

Take a look at your planned business or your existing business from the perspective that has been outlined in this article, and write a concise business plan. It will help to bring clarity to your operations and convince investors and lenders to participate in your enterprise.

"When I started out in business, I spent a great deal of time researching every detail that might be pertinent to the deal I was interested in making. I still do the same today. People often comment on how quickly I operate, but the reason I can move quickly is that I’ve done the background work first, which no one usually sees. I prepare myself thoroughly, and then when it is time to move ahead, I am ready to sprint." Donald Trump Quote

In conclusion, the Internet is full of resources and help such as the article by David Bond. Once you have searched for a business plan that best suits your industry, you will be well on your way to having a clear direction as to where u see your business in the next five years and beyond. Help and advice is only a click away!

Small businesses need to diversify

2010-12-06T20:46:00.001+02:00

With the number of small businesses still far exceeding those who become successful, entrepreneurs are continuously looking for strategies to make businesses more profitable. From personal experience I know this can be very challenging especially in the early days and when starting a business and especially when struggling we often will take all the help we can get.

A recent study suggested that small businesses need to broaden the outlook and sell a more diversified range to a wider set of clients.
In an interesting bit of rsearch Loni Prinsloo from http://www.engineeringnews.co.za talks about the findings that points the way towards a more sucesfulbusiness:

SME Survey 2010’ principal researcher Arthur Goldstuck said on Monday that the first recession to hit South Africa in 17 years was instructive and showed that those companies which did not have all their “eggs in one basket” were the ones which weathered the storm more effectively.

“It goes to the reliability of the income stream and the health of the target market,” said Goldstuck.
“When one sector comes under pressure, it helps to have others to carry the business through tough times. Typically, however, if you serve corporations, you are likely to be more resilient and more profitable,” he added.

The survey, sponsored by the National Youth Development Agency (NYDA), showed that 39% of SMEs in established markets had typically done business with corporate customers, but only 31% of businesses in emerging markets had done business with corporate customers.
“There is a strong difference in diversity between established and emerging SMEs, especially in terms of corporate procurement.

“This presents an issue, since black empowerment legislation encourages sourcing from small business and in particular, from emerging small business. That could make a case for more intervention from government in terms of enforcing procurement policy,” said Goldstuck.

“We would like to see continued and accelerated participation from big business in supporting and developing emerging talent to achieve the capacity which is required by the procurement arms,” stated NYDA chairperson Andile Lungisa.

Resources permitting this may be a good idea but it will take time and effort to develop the wider product range and target the wider clients groups. As a lone entrepreneur especially it may be fairly challenging to get to this point but will be very useful as a future goal to work towards.

SA Company in running for worlds largest business plan competition

2010-11-21T20:56:00.000+02:00

A South African company is still in the running at the worlds largest business plan competition taking place in the US. Entrepreneurs are making use of the latest in business plan software technology to facilitate the planning process as competition this year is especially fierce.

The Accelerate Michigan Innovation Competition has announced the names of 50 companies that are semi-finalists for over $1 million in business finance awards at stake.

The competition, which kicked off in late August and ends in December, is aimed at growing Michigan business and putting the state — especially Southeast Michigan — on the map for venture capitalists and other investors.

The semi-finalists are listed under the “company competition” tab at www.acceleratemichigan.org.

They include entries from a variety of industries: alternative energy, medical devices, next generation manufacturing, life sciences, advanced transportation, defense and homeland security, information technology and advanced materials.

Billed as the world’s largest business plan competition for first- and second-stage companies, the contest drew about 570 entries, most from Michigan businesses and students.

But entries came from every region of the U.S. and even from Canada, Switzerland and the Western Cape of South Africa, according to Ann Arbor Spark, which is administering the competition on behalf of the Business Accelerator Network. Companies who receive cash awards are committed to located in Michigan.

The network also counts Detroit-based TechTown, Automation Alley in Auburn Hills andMacomb-Oakland University Incubator among its members.

A $750,000 grant from the New Economy Initiative is funding the competition, along with $250,000 through the Michigan Pre-Seed Capital Fund managed by Ann Arbor Spark, $100,000 from Business Leaders for Michigan and more than $100,000 in sponsorships.

Sponsors for the first year include Business Leaders for Michigan and the University Research Corridor through Accelerate Michigan, DTE Energy Co., Ford Motor Co., Strategic Staffing Solutions, Butzel Long PC and University of Michigan Health System.

The financial support will fund 17 awards, including a single cash grant of $500,000 to one early- or second-stage company.

The business plan competition will culminate with an "elevator speech" contest, open to the public, on Dec. 11 at UM, the same day as the UM/MSU "Big Chill" outdoor hockey game at Michigan Stadium.

Judges for the competition include angel investors, venture capitalists and other professional investors, many of them alumni of the University of Michigan, Michigan State University andWayne State University

Foreign donors invest R43,5 million in SA Small Businesses

2010-10-05T18:34:00.000+02:00

South African business plans has become extremely popular amongst foreign investors in recent months. In addition to the article in the South African Venture Capital blog which earlier reposrted a boost from foreign Venture Capital funds investing in SA Small businesses. Small businesses with viable business plans in South Africa has already gained more than R43,5 million from foreign donors according to the South African Times

South African small businesses competed against other emerging countries for foreign investment, with foreign donors investing R43,5 million in the country's small businesses this year, an increase of 89 percent from last year, the Small Enterprise Development Agency said on Wednesday.

The agency said this increase was due to its improved financial management and stable leadership, adding it also meant there was confidence in the agency's role to develop and support small enterprises, chairman Linda Mngomezulu said at its annual stakeholders' meeting.

The Global Entrepreneurship Monitor report published in May showed that one in eight people started a business in emerging nations such as India, Chile and Brazil, whereas in SA the figure was one in 13
While the agency could not identify the foreign investors that were supporting local small businesses, SAB Miller, Sasol and Bidvest were examples of local companies which had put significant funds into training programmes and enterprise development.

Mngomezulu said the agency would 'further roll out plans' to make it a 'centre of excellence for business development'.

However, according to a survey released by Finscope earlier this month, the growth of small businesses is still slow in SA, with only four percent of entrepreneurs aware of the services offered by the agency.

Agency CEO Hlonela Lupuwana said the organisation would respond to these challenges by 'strengthening partnerships with provincial and local government agencies and developing a client journey model which prioritises interventions in small businesses'.

The agency's l earning academy trained 750 people this year, with 70 percent of those starting their own businesses, she said.

Lupuwana said, however, that the agency did not want to focus only on the number of businesses assisted, but also on producing quality businesses that would have a real effect on economic growth.

The global economic crisis had proved 'devastating to the vulnerable small enterprise community' but it was at such times that the value of the agency ' was best revealed as creating an environment which prevented the recession from dampening the country's entrepreneurial spirit'.

She acknowledged that the agency needed to raise awareness about its services. Consequently, the agency intended to develop high-profile visible projects, hire more staff at branches around the country and bump up delivery of its products and services.

SEDA who on a regular basis fund a wide range of business plans and ideas in SA is encouraged by the support from foreign investors.

Small Business Support: the Government promises to double their efforts

2010-09-23T18:25:00.000+02:00

With the small business sector being such an crucial element of the economy as a whole, it was not surprising that the Government is vouching to do more for both new and growing businesses. With a large amount of small business support already being provided in areas such as business planning, business finance, general business support, grants and business loans, more money will be provided to entrepreneurs. Small businesses of course benefit the economy hugely. From an employment perspective alone, the sector is the largest employer in the country by far.

But small business owners often say that they don't see the support being provided. Entrepreneurs around the country will tell you that they often feel isolated in dealing with their day to day challenges and it really here where the support needs to be focussed.

In a recent interview with Engineering news, the Department of Trade and Industry (DTI) director-general Tshediso Matona said at the launch that it was essentially a "no brainer" that small businesses had great potential to grow the country's economy and provide employment in the country.

Matona emphasised that the DTI planned to double its efforts in this sector, through policy strategies and institutional architecture.

"Incorporated in South Africa's new industrial policy initiative, government envisages that the SMME sector could create a further 2,5-million direct and indirect employment opportunities over the next ten years."

The survey indicated that black business owners made up 84% of the small business sector, and that 58% of the owners were female. However, women in general engaged in the lower end of the entrepreneurial field, mainly engaging in product reselling.

TNS research surveys client service director Rob Powell said that the difficult economic climate over the past two years had definitely instigated the start of more small businesses.

The survey indicated that 41% of businesses have started up over the last two-and-a-half years, and that over 40% started up their own businesses because they could not find a job in the formal sector or were unemployed. Further, 35% of respondents, mostly women, said that they would take up employment in the formal sector if they were offered the opportunity.

Powell said that it was evident that the SMME sector was still very uninformed and unaware of support structures available to small business owners.

He said that currently, 41,8% of business owners did not have any engagement in the formal or informal financial sector, and that people were generally credit and even insurance averse.

FinMark Trust CEO Maya Makanjee said that one of the greatest challenges in the SMME sector was to now "take it to the next step" and assist active players in expanding their skills sets and in accordance their business size and the number of employees that they were able to employ.

The survey indicated that out of the six-million small business owners, more than 60%, or around 3,8-million, of them did not employ any other people.

"The main gaps that exist in the SMME sector relate to education and skills, cash flow, record keeping and budget management, the emotional barriers relating to credit use, and leveraging existing access to cellphones and other infrastructural support, providing access to low-level insurance and product unbundling," said Powell.

The FinScope study showed that for 67% of respondents this were their only source of income, while others also received grants and support from government and other family members. FinMark Trust information and research specialist Trevor Kaseke noted that around 500 000 people could be taken off government support, if the relevant role players were able to assist these business owners in growing their businesses.

Matona agreed saying that the everpresent and dire challenge of unemployment in South Africa, could be tackled by targeting and developing entrepreneurship and providing the proper infrastructure for the development of the sector.

Currently, around 73% of small business owners work out of their homes and respondents of the survey had identified a lack of space and a lack of funding as stifling the growth of their businesses.

"The growth and support of the SMME sector remains at the apex of government's economic policies, and we also call on other actors in the economy to play their role in promoting this vital economic sector and fighting unemployment in the country," concluded Matona.

Entrepreneurs and small business owners alike will be hoping that this time round the support reaches their officer, suburbs and stores but it remains to be seen if it has any effect on their day to day business activities, turnovers and ability to be competitive.

Market research will improve your chances of business success

2010-09-15T16:47:00.000+02:00

For any new business, market research is a key element of the business plan that will ensure, not only that you understand your market and how your potential product or service fits into that. Some business plan software programs will include this element in the business planning process and Its crucial that this forms a the foundation of the choices that you will be making as a business owner as it will mean that your decisions are based on facts rather than estimate - or a now more commonly used - guesstimate. This part of the start-up process is conveniently left out to often as the entrepreneurs enthusiasm and impatience to get the business of the ground at all cost gets the better of him/her.

So what is market research and how can you do it to ensure you start of by knowing the facts about your market?

Secondary Research

Secondary research makes use of existing data from whatever sources are available. There are government censuses, Mintel surveys, and many private market research agencies that allow access to their data; some of it for free. It can be hugely advantageous, especially as a place to begin. Secondary research more often than not, proves to be a solid base on which to develop your own primary research. It plays the same role as research in general does to your product launch, and should be seen as just as vital. Also, this is of course far cheaper and generally quicker than creating your own research from scratch. The negatives The other side of that coin is that you have neither picked the panel to suit your exact needs, nor the questions. It is feasible that you can find some research somewhere that corresponds to what you are trying to achieve but it will almost certainly require some tweaking, and will not necessarily be the people you wish to interrogate; the use of qualitative research designed by someone else will almost certainly make the target specialised away from your goals. Another main issue with secondary research is that by the time it reaches you it’s often outdated; markets change so quickly in business that the only way to be truly current is through new research. This is not to rubbish the quality of secondary research.

Primary Research

Primary research is, essentially, the creation of your own research, whether a question that you ask to your friends and family or a survey put together alongside and agency and administered to a wide panel. Primary research will instantly let you feel more in control of your project; and that is the exact position you will find yourself in. You choose the questions and select your panel through qualitative research, allowing you detailed responses from individuals. You decide how, when and where your research is administered. You can ensure that your research is focussed: the number of participants and their backgrounds, the number and nature of the questions, the amount of time that your survey is available. This is the most accurate way to research a market sector that is specific to you and your product.

The down side

It is of course, more expensive, whether financially or on your time. If performing primary research alone it will take a lot of time, refining and will need some experience in producing quality questionnaires. It will also take time for your questionnaire to be completed if you don’t have direct access to a ready panel. Most of this can be avoided by using an agency, but at a cost higher than performing your research alone.

So what’s the best option?

Neither type of research will take you to your goal alone; however, a combination of the two will give you all the information you need. Using primary research alone, without first seeing what has or has not worked for other companies and possibly missing out on important data from research that you couldn’t afford to perform yourself, is likely to lead to irrelevant questions or missed opportunities. At the same time, relying solely on secondary research is likely to leave you with answers that are vague or inappropriate to your specific audience. The two compliment each other well, and when used in conjunction will give you a well rounded and accurate portrayal of the needs and opinions of your market sector.

What do investors look for in companies they invest in?

2010-08-25T17:01:00.000+01:00

What do investors look for in companies they invest in? This is a common question being asked by entrepreneurs I speak to, and as always the answer is not as straight forward as they would like. Entrepreneurs are keen to ensure that they include the right information and focus in their business plan. That the focus of the business plan is what the investor will be looking for. In order for us to understand this the results below comes in very handy indeed. Most commonly investors will look for viability, positive marketing research results and market with strong potential. But this of course may not always be the case and it will vary from one investor to the next.

In a recent survey amongst some of the countries most active investors the survey results were not to surprising. What was interesting and perhaps not what many entrepreneurs were expecting the the importance of the entrepreneur or team itself. Its really brings us back to the old adage that people invest in people and even in the modern day, investors still prefer to invest in the people behind the business.

From the survey results it was clear that Superior Management, A Large Market, and Unique Products Create Value for most investors. The results where as follows:

Quality of management: 4.5
Size of the market: 3.8
Product qualities:(uniqueness, brand strength, patent protection) 3.7
Rate of market growth: 3.5
Competition: 3.5
Barriers to entry: 3.4
Stage of development of the company: 3.2
Industry the company is in: 3.0
Quality of management was emphasized by the VCs to the extent that 7 out of 10 gave it a rating of "5", and nearly 9 out of 10 gave it at a 4 or 5. There were a few mavericks among those surveyed, however: 7% gave management quality an importance rating of only 1 or 2.

No other factor came close in importance. The next most important, size of the market, was given a rating of 5 by only 30% of the respondents, followed by product qualities, which received a 5 from about one out of four respondents.

Note that all of the factors received an average score of 3 or higher. All of these factors were viewed as significant, and entrepreneurs should take care to clearly articulate each of them to investors.

From a business planning perspective this clarifies where the emphasis needs to be if you are aiming the business plan at an investor. These requirements may well be very different for banks, considering the modern day reliance on automated processes by many banks to make business finance decisions for them.

For entrepreneur this will in a sense be good news as we are after all, if anything, people orientated, but it tells us that we also need to ensure the research is done, the product / service quality needs to be solid, market information needs to be considered, competitors can not be underestimated and the people we have in the business must be of the highest caliber possible.

Positive business climate in South Africa

2010-08-09T11:00:00.000+01:00

Great news this week from the World Bank that the business climate in South Africa is seen as very positive, especially in comparison with many of its peers. This is great news for entrepreneurs lining up new a business plan or those already in business working for business growth. With a positive business climate banks may be more likely to provide business finance and very importantly, consumers will be more likely to spend.

The article published on SouthAfrica.info this week reads:

Start:

South Africa's business environment compares favourably with its peer group of upper- to middle-income economies globally, according to a new World Bank report, which adds however that certain improvements are still needed.

These include raising the market share of efficient, high-performing enterprises, enhancing productivity, and increase export competitiveness for job-led, sustainable economic growth.

The report, entitled "South Africa: Second Investment Climate Assessment – Improving the Business Environment for Job Creation and Growth", was prepared by a World Bank team in collaboration with the Department of Trade and Industry, and released by Trade and Industry Minister Rob Davies and World Bank country director for South Africa Ruth Kagia last week.

The report presents the results of a 2008 survey of 1 056 manufacturing industries, 68% of which are located in Johannesburg, 14% in Cape Town, 12% in Durban, and 6% in Port Elizabeth. Of these, 231 businesses were revisits from an earlier 2003 survey.

Strengthening business competitiveness

The report provides survey-based analytical advice to policy-makers, business leaders and civil society, with a view to strengthening business competitiveness in South Africa.

The report's key messages are that:

South Africa could improve its productivity and competitiveness by increasing the market share of efficient producers. Given the high concentration of South African industry, this requires further efforts to enhance competition through more activist and innovative policies.
Investments in employee training in small, medium and micro-sized enterprises (SMMEs) should be increased with better targeted government support.
South Africa could do more to improve access to finance by SMMEs and support productive informal enterprises.

"The findings of the report are very interesting, particularly where they refer to the business environment in South Africa – the ease of doing business, regulatory framework, and all the different steps that need to be gone through when one is doing business in this country – which actually compare favourably to those of other peer countries," said Davies.

He said that the government actively promoted the above factors as one of the country's competitive advantages, adding that it was something they wanted to preserve and even improve on, as it was clearly important to attracting new business.

"Furthermore, we acknowledge the challenges identified in the report, such as small business development and access to finance, and our department is working to address the challenges," said Davies. "We welcome the report as a tool of dialogue, discussion and debate."

African spillover

"Improving the investment climate in South Africa is critical for economic growth and job creation," said Kagia. "For Africa's largest economy, a better business environment will generate large spillovers benefits across the African continent.

"The challenge is to identify bottlenecks and take concrete actions."

For the purpose of the survey, the comparator group of emerging economies was Argentina, Brazil, Chile, China, Malaysia, and Thailand.

These countries are natural peers of South Africa, as all are relatively high-performing, resource-rich middle-income countries which have experienced significant export-driven industrialisation.

SAinfo reporter

End:

So weather you are in the process of writing a business plan or an existing business owner looking for growth capital or simply the confidence that things are going to remain positive for the foreseeable future, lets use this opportunity to say our final farewells to the now almost forgotten credit crunch.

The Power of Resilience

2010-07-28T21:13:00.000+01:00

Over the years, I’ve used the phrase “resilience, determination, genius and commitment – to describe qualities needed to succeed as an entrepreneur. Although many well-known modern day entrepreneurs such as Richard Branson and our own Mark Shuttleworth has to a large extent not only done plenty to promote entrepreneurship but also to a large extent perhaps glorified it as a profession.

But entrepreneurship cannot be mistaken for a easy way out, get rich quick profession as it very seldom is. Any successful entrepreneur will tell you that it takes extreme commitment, passion, determination and often a bit of luck to get to the top.

Every day we deal with business plans that fail and those who succeed. What’s the difference? In the long run you have to say resilience plays a large role.

Resilience comes from believing in your idea working long days in the trenches and knowing more about that trench than anyone else. It’s the 10,000 hours principle that Malcolm Gladwell highlighted in his book Outliers – that to become an expert in anything you need to have spent at least 10,000 hours doing it. You may not always be the most talented guy on the block or be naturally gifted but commitment, hard work and resilience will get you there if you do the little things right. If you do your market research, invest in R&D, hire the right team treat your clients with respect and review and adjust on the regular basis.

The value of sweat and toil is not a revelation, but some new studies have unveiled the neuroscience of resilience and its role in achieving goals. These psychologists have measured resilience and compared its role in success compared with intelligence and innate talent. Guess what? Resilience plays a huge role. “Nobody is talented enough to not have to work hard, and that’s what resilience allows you to do”, say the psychologists who led the study. I know this first hand.

Personality traits, as I’ve mentioned with salespeople, can play a much larger role in personal achievement than mere intelligence alone. In fact, people who are told their whole life how smart they are may well be at a disadvantage. Better to praise your kids for working hard than being smart.

Why do some people suffer real hardships and not falter? What exactly is that quality of resilience that carries people through life? In this article from the Harvard Business Review, Diane Coutu asks these questions and concludes that the answers apply to organizations as well as individuals.

Coutu agrees with those who argue that resilience can be learned. So-called "resilience trainers" are in demand because, as one of them observes, "More than education, more than training, a person's resilience will determine who succeeds and who fails. That's true in the cancer ward, it's true in the Olympics, and it's true in the boardroom."

After researching many theories, Coutu concludes that resilient individuals share three unique traits:

• a resolute acceptance of reality;
• a sense that life is meaningful;
• an exceptional ability to improvise.

The author argues that these traits exist in resilient organizations as well.

For an entrepreneur, the first key to building resilience is asking, "Do I truly understand-and accept-the reality of my situation? Does my business?" entrepreneurs should resist the tendency to slip into denial as a coping mechanism. Facing the truth head on can be a matter of survival.

As an entrepreneur you need to
1. face internal and external challenges and opportunities without sugarcoating them-and create strategies for dealing with or exploiting them;
2. utilize the meaning-making power of communicating and developing mission, vision, values as well as short-term goals with staff;
3. encourage the innovation and creativity of staff while creating an orderly process for dealing with normal operations.

Starting and running a business will not be easy, I can guarantee you that. It will be tough, it will take plenty of energy, late nights, blood sweat and tears. But it will be fun, rewarding and I can promise you that once you have started you won’t want to do anything else.

Convincing Investors to Invest in You

2010-05-05T10:59:00.004+01:00

As an entrepreneur seeking business finance, it is crucial that investors see you as intelligent, credible and competent. Your business plan can support or deny that you possess the above attributes, depending on several important details within the text. Most entrepreneurs have heard what NOT to write (i.e., "Our competitors do not exist, and our management team is unbeatable"), but the following five tips are excellent examples of what you SHOULD do to gain credibility and be taken seriously by a venture capitalist.

1. Research your market. Probably the most important element of the business planning process is that it forces you as an entrepreneur to investigate your market. Make sure you speak to potential clients, not just family and friends. You need to find real evidence that people in the market will be willing to part with their cash in order to get hold of your product/service. The information you gain here can be used for the business plan. the financial projections, creating the product or service offering, marketing your business and a whole range of related benefits. So first step when thinking of launching a new business, product or service = Get into your market and find out if there is a need.

1. Keep it real. When it comes to your financial projections, make sure they are realistic. Do a "sanity check" by looking at your income statement, particularly your year-to-year growth and your profit margins. If something seems "too good to be true," it probably is. Dig through your assumptions and temper them to make sure they're all realistic. Also, keep in mind that not everything will go as planned.

On the other hand, if you can realistically support that your business will double in size every year, by all means do so. But be prepared for healthy skepticism from investors, and be ready to answer all of their questions in detail. Another common assertion is that a business will have unrealistically strong operating margins. If you can show data from comparable companies that are actually making those margins, then your projections are believable.

2. Examine the barriers to entry. This is an overlooked part of many business plans. You will win credibility and favor in the eyes of investors if you can articulate something real other than a "first mover advantage." It's been said that the first-mover advantage only lasts until there's a second mover.

3. Define, analyze, and explain your customers' needs. Show the investor that you've done your homework. Use as many reliable third party resources (reports, studies, etc.) to show how your business provides exactly what the market is demanding.

4. Talk about the relevant market, not the total market. This is a common mistake in healthcare business plans; the healthcare market, broadly defined, is worth $1 trillion, but that includes everything from knuckle bandages to titanium hips and open-heart surgery. When writing the plan, include the eye-popping market size figure, but be certain to condense that figure down to your relevant market. For example, caffeinated citrus-flavored sodas are a fraction of the global beverage market, but the market size for this specialized product is much more meaningful to an investor.

5. Draw attention to tangible milestones and achievements. Have you been successful in the past? Investors will think you're more likely to succeed in the future.

Lastly you need to ensure that potential investors are clear on what is in it for them. Speak about your dreams and visions all you like, with 99% of people out there, the main issue is being clear on how they will benefit from the deal.

Social Media for SA Entrepreneurs

2010-03-09T21:40:00.000+02:00

As an indicator of just how popular social media has become amongst South African entrepreneurs we recently created a Facebook group for South African entrepreneurs and investors and within the first three weeks, membership grew to well over 1000, showing not only the popularity of entrepreneurship in the country but also how social media is increasingly becoming an option for entrepreneurs to source the resources need to drive their businesses forward.

South African entrepreneurs are flocking to social networks such as Facebook and twitter as new avenues to finding the business finance needed for starting or growing their businesses.

With the growth of social media and its uses in the last few years, innovative entrepreneurs are going online in the hordes to attract the business finance they require. Following the recent economic slowdown banks may have tightened their lending policies and entrepreneurs around the country has seen this simply as an invite to find alternative sources of financing and support.

Where services such as Facebook, Twitter and LinkedIn have been successful bringing entrepreneurs, clients and business investors together based on affinity and mutual interests, business-networking services are increasingly being used by small business owners to source the business finance that they need. Along with LinkedIn are such offerings as Ryze and Tribe.net. My take? This use of online, friend/associate-based networking will prove to be one of the most valuable business tools the Internet has yet provided.

Although the number of these services available to entrepreneurs and business people is growing, LinkedIn strikes me as the easiest to embrace, and the most effective. Typically, each service has formal sign-up steps that assist you in creating your online identity. This may include information relating to your current job, previous positions, and general interests. Some business networking sites enable you to publish you own "blog," or join specific community discussion groups.

Often, the key to using a business network successfully involves the creation of your personal friends — or business connections — group. The registration process is similar across the various social networking websites but LinkedIn boasts one of the simplest methods of inviting and maintaining your social network. By simply uploading an exported file from your contact manager, LinkedIn can immediately tell which friends of yours are members of the service. This method of contact maintenance and connection group development makes LinkedIn a breeze to start with, immediately enabling you to gain access to your contacts, without having to laboriously enter emails to discover if associates are already there.

What is seed capital?

2010-02-26T00:21:00.002+02:00

What is seed capital and what is it used for? You may have asked yourself this question when searching the internet for ideas on how and where to find business financing for your new business. With so many types of funding being mentioned, how do we differentiate between seed capital, venture capital, angel finance, private equity financing, bank finance and what ever other type of business funding you may have heard of.

Seed capital enables businesses to launch a new product or service without depending fully on a business loan. The funds for this form of financing are typically provided by private investors who are looking for a high return on their investment of at least 30 percent. The investors look to invest in an industry with a market of at least R1 billion, and they also want an industry with few competitors for your business.

Businesses that typically obtain seed capital are young companies around one year of age that have not produced a product or service for commercial sale yet. The companies are so new, so it can be difficult to obtain a regular commercial loan that is sufficient for covering all of the related start up expenses.

Regular lending institutions also don't like taking large risks in companies, but an investor will take a risk for the hope of a high return on the investment.  There are some things about seed capital that are extremely important for a business owner to understand. An investor often will want partial control of the business, so you have to be willing to give up a portion of your business if you want financing from an investor. Another thing to keep in mind when seeking investors is that you will have to share confidential information about your business with them.

It’s best to be creative and explore all possibilities when looking for money for your start-up. It is also important to know that all money is not the same- each offer for financing comes with its own terms. Make a smart decision by understanding and comparing the options. Decide what terms you can live with, and then explore the possibilities.

Note that there is a difference between seed money and professional venture capital. Most of the programs listed below are offering true start-up support. They will offer you the money to fund the initial stages of forming the company, creating your plan and then approaching serious Venture Capital Funds. A key part of seed money is providing the start-up with mentors, ideas and suggestions to start the company off on the best foot possible.

For Investors Network, some of the criteria on their website are:

You must be a developer, or your co-founder must be a developer, or you must have identified a specific developer who has the ability to deliver a prototype of your product or service.
Your product or service must make use of the Internet, preferably in a new and exciting way.
Your project must never have raised serious money from an institutional investor
You should have a prototype to show us before you apply. Mention it in your application.

For Y Combinator, in addition to filling out the application, they say this:

• “The people in your group are what matter most to us. We look for brains, motivation, and a sense of design. Experience is helpful but not critical.

• Your idea is important too, but mainly as evidence that you can have good ideas. Most successful startups change their idea substantially.
• We’re more likely to fund people we know are smart from their submissions and comments on Hacker News. In fact, that was one of the main reasons we wrote it: so that we could get to know people before they applied.

“We have a simple, straight-forward application process. We care most about the quality of your idea (boldness and simplicity are two characteristics we’ve seen correlate with success), and the talent and commitment of you and your team. This is as much a bet on people as it is on the idea. If you have some initial design/software done, that’s great—we’d love to see it.

TechStars
“We fund technology oriented companies, typically these are web-based or other software companies, but we’ve funded companies that don’t quite fit that mold as well. We’re also looking for companies that can have national or worldwide reach. Specifically, we don’t fund medical device companies, biotechnology companies, restaurants, consultancies, or other local service oriented companies.”

Charles River Ventures
“What we do look for is outstanding people, with a vision of how their company can play a role in the evolving technology and business landscape. It’s really that simple. The best way to get our attention is not with a 100-page business plan, but rather to network through someone in our portfolio.
Because the lay of the land changes so quickly in our key industries, a detailed business plan is often a futile exercise. Instead, a concise executive summary, an expense budget for the first two years, the revenue model, and a PowerPoint presentation are generally the materials we’re interested in seeing.”

DreamIt Ventures
“As we review applications we are going to focus on the following questions:
• How BIG is the idea?
• How big is the market opportunity?
• Can you complete a prototype, beta or market-ready product within 3 months?
• Is the team comprised of bright, capable, enthusiastic people with whom we can work?

Capital Factory
"We like lean companies that can get to profitability quickly and can scale rapidly. Most of us have technology backgrounds and while it is not a requirement, it is very likely that the companies we select will have technology components to them. We're happy to start with just an idea on a napkin, but we'll also work with companies that have some customers or angel investors and are now ready to scale their business. ...Most importantly, we want to get involved with companies that we can have the biggest impact on."

So if you think that seed capital is indeed what you are looking for, log on to your local investors network upload your business plan and find an investor that provides this type of funding for your business

Banking Support for Entrepreneurs

2010-02-23T16:56:00.003+02:00

One of South Africa’s major banks recently announced increased levels of small business support, beyond what is normally expected from the banking industry. As one of the major stakeholders of the small business industry banks have for years benefited in many ways from the boom in entrepreneurial activity, often providing very little but high interest rates and tough terms to especially new businesses. In South Africa, small businesses account for about 40% of economic activity and provide a massive 60% of employment. Looking at the stats makes it easy to understand why banks would want to appear as small business friendly and this move hence comes as little surprise.
 
Nedbank Small Business Services recently announced that it is now offering a number of banking and nonbanking interventions to assist entrepreneurs as well as national social transformation. Business registration is a key focus area and the bank offers entrepreneurs the ability to register as a formal business entity through any Nedbank branch.  The entrepreneur will simultaneously be able to register a business and register for  value-added tax.  The bank does not earn anything from the registration, but merely plays a facilitation role by using its technology to allow entrepreneurs to link with service providers, such as com- pany registration business SwiftReg.

Enterprise development is also a focus point for the division and it has partnered with government financial institution Khula Enterprises to enable entrepreneurs who have inadequate collateral access to finance.
  
Further, Nedbank has noticed that South Africa has gone from being a largely resource-based economy to emerging as a sales-type industry.  More Internet and service driven businesses, are emerging and there is a move away from heavy retailing to an emergence of manufacturing and a large services component in the country.

South Africa of course has a large range of business support organisations, with a real culture of entrepreneurship starting to develop within our nation. South Africans are naturally entrepreneurial, both from a necessity point of view as conditions for finding employment has been challenging for many years as well as from an opportunity perspective where the rich mix of races and cultures have brought about a wealth of idea and resulted in a breeding ground for entrepreneurs.

The bank says that they have started to play more of a facilitation role by using its technology to allow entrepreneurs to link with service providers, such as company registration business SwiftReg.

Together with the various other nationwide service providers such as SEDA, the IDC, SA Business Plans, Business Plan Software and the Investors Network we are confident that entrepreneurs in South Africa have a wealth of support that they can rely on and that, going forward into the next decade entrepreneurship will play an even bigger role in the growth and sustainability of the country.

The Business Plan

2010-02-20T17:34:00.003+02:00

Just why the business plan has become such an important part of the business financing process in recent years comes as little surprise. Using the latest in business plan software products makes worting a business plan fairly straight forward. Very seldom do we find that entrepreneurs are all-rounder’s and have skills and experience in all the different functional areas of the business. Most often the potential business owner may have both an interest and experience in a certain area and for that reason that they may have come up with a solution to a current problem or challenge that he/she may have come across.

Most entrepreneurs are in essence advanced problem solvers and due to their strong self-belief and resourcefulness may take their solution further to the point where a new venture is created. Think about eh entrepreneurs that you know, consider their ideas and you will quickly see that they have really come up with a solution for either themselves, or someone they may know, whether that is a friend, customer or family member. So the point I’m making here is that the solution obviously comes from their area of expertise, plus of course a healthy serving of imagination and creativity.

When it comes to the actual starting and running of the business, numerous other skills are also involved, whether those are marketing, finance, operational, customer service or service delivery skills seldom would you have thought through the processes involved in addressing these areas. This is where the business plan becomes such an important issue.

Banks and business investors are very well aware of the large failure rates for start-ups. It’s their business to understand the risk that they are taking on and hence believe that one way for the risk to be managed is to ensure that the entrepreneur have actually through thought the various issues while engaged in the process of writing he business plan. The plan will require you to look at just about everything from marketing, to ecommerce, operational aspects, sourcing suppliers and even the legal issues involved in starting and running your business.

It’s a pity then that too often today, the only reason why someone may draw up business plan would be to comply with the demands from the bank or investor as it really can serve as a major tool to ensure that the all too often mentioned business failure rate can be improved and more entrepreneurs can make a success from all the initiative, energy and capital that goes into starting a new business.

Necessity Driven Entrepreneurs

2010-02-19T23:16:00.000+02:00

After an interview almost three months ago, I recently found this great article on Necessity Driven Entrepreneurs, and as always, happy to be mentioned.

-----------------------------

Academics call them entrepreneurs motivated by Push factors. We call them necessity-driven entrepreneurs, they have different motivations than opportunity-driven entrepreneurs, and yes, we’re seeing more of them.

Ben Botes, director of program and service delivery at the South African Investors network in Gauteng, said the organization, which encourages would be entrepreneurs to start businesses, has seen so many people who have been laid off that it started a business start-up support program that regularly attracts 30 t 40 people who are looking for a helping hand with both the writing of their business plan as well as the crucial are of finding start-up finance. In 2009, attendance at the Centre’s “Exploring Entrepreneurship’’ sessions in Johannesburg, Durban, and Cape Town almost doubled in numbers from the previous year.

Barbara Nkosi was among the dozens of first-time entrepreneurs filling the seats at a beginner’s business seminar at the center. Nkosi said her job as an executive assistant will go away in March, when her employer, moves to another province and she has to find a way to make ends meat.

“Nobody is hiring,’’ she said. “I’m here because I’m taking care of my own destiny.’’

Sarah Buchannan from Durban who, between her and her husband, between them have decades of experience at local architectural and design firms, started getting together informally with a group of fellow designers and strategists last summer, after both were laid off.

“Initially, we just wanted to share our situation,’’ Buchannan said.

The group of eight women decided to collaborate, starting a business to offer clients multiple services, from print and architectural graphic design to strategic marketing. That led them to an investors network meeting.

“Because of the economy, we’re seeing more entrepreneurs who are pursuing opportunities because they don’t have to take that leap from a secure job,’’ Botes said. “They are already out of work, so why not pursue something that you’re passionate about?’’

“The people who were laid off ahead of us, none of them were getting jobs,’’ Barbara recalled. “So we knew we had to come up with a new plan, to beat the bad economy.’’

The couple honed their skills in the latest, most sophisticated 3D visualization software available, the kind that architects use to pitch projects. They also established ties to a large community of 3D designers locally. One good sign for their young business: they landed a big job before they even had a chance to print business cards or launch a website.

“It’s a little scary, but exciting at the same time,’’ Sarah said. “We’re trying to see this as an opportunity to turn adversity into an advantage.’’

John Gosling, their business coach said his advice to those planning to start a business for the first time is to give themselves “an honest self-evaluation.’’

“You should really be building on your experience, your skill sets, and your interest,’’ he said.

But he cautioned that entrepreneurship is “not a quick fix’’ for unemployment, adding that while he tries not to be “a dream crusher,’’ he often advises unemployed would-be entrepreneurs not to regard a start-up idea as 'fix all' solution.

“Even successful start-ups often don’t generate significant income for two or three years,’’ he said. “In fact, many require a significant investment up front.’’

The entrepreneurs are hoping that their fledgling enterprise will be able to overcome some of the issues that bedevil start-ups. The principals will work in “virtual teams,’’ from their home studios so overhead costs will be low.

Still the two first-time entrepreneurs admit that after years working in architectural firms, they are in unfamiliar territory as they plough through the documents that a new business requires.

They are also working through a business planning “homework assignment’’ from their SA Business Plans consultant that includes a business plan, a financial plan and a sales forecast.

“They each could have gone out on their own,’’ said Botes, “but they are better off as a team.’’

But he added that the group still has to fine tune its business plan, and possibly reduce the number of graphic services they will offer.

“They have a pretty good shot,’’ Botes said. “But it’s still a long road they have to travel.’’

Business Plan Competition draw 6000 Entries

2010-02-01T23:55:00.000+02:00

The now annual business plan competition organised by Enablis, First national bank and SEDA, have so far this year drawn a massive 6000 entries from hopeful entrepreneurs, hoping to gain access to the almost R50 mil in prizes and start-up capital provided by the sponsors.

The competition launched in 2006 is increasingly sponsoring larger numbers of entrepreneurs to support entrepreneurship oin South Africa, job creation, the small business sector and of course the wider economy.

Jane Steinacker of Times Live writes:

--------------------------------------------------------------------------------

Despite the almost 50% contribution that the small business sector makes to the output of the South African economy, the sector's contribution to GDP and employment, its growth has stagnated at about 5% for the past three years, says Heather Lowe, head of enterprise development at FNB Commercial.

Lowe believes that it's not only South Africa's culture of employment and entrepreneurship that is at fault, but also small business's limited access to funding and support.

Lowe says early-stage development finance is missing, adding that South Africa has a limited pool of angel investors and venture capitalists to help stimulate the sector.

In an attempt to stimulate the sector, the bank and other institutions with an interest in SME development have for the past five years clubbed together to host what has become the largest business plan competition in South Africa.

Organised by the Canadian-based entrepreneurship development NGO Enablis, the 2009 FNB Enablis Seda Business Launchpad competition offers winners preferential access to a pool of R50-million in funding, as well as a goodie bag that includes a new laptop and bag, Microsoft office software, Microsoft training voucher and Enablis membership.

In its first year the competition received 500 entries.

Five years later, 6000 hopefuls in 10 industry sectors submitted business ideas for consideration.

This year the competition went online, and entrants needed simply to fill in a business plan template to enter.

Long-winded business plans were not necessary. Additional support was provided by the small enterprise development agency (Seda), whose offices assisted entrants with their submissions, says its executive manager for corporate services, Kaybee Motlholoa.

The South African Institute of Entrepreneurship waded through the entries and supplied the competition organisers with a short-list.

"Of all the entrants, about 2500 went through for judging," says competition director Martin Feinstein, adding that if the plan submitted was "worth something, it was going to get somewhere".

In its first year the competition had five winners. This month 19 winners were chosen, and this number is expected to grow. "The day is not far off where we will get close to 100 winners, provincially and nationally," says Feinstein.

This year's winners are spread across South Africa, from Sello Moloantoa's electrical business in Pretoria to Elana Marie Snyman's theatre stage props design and manufacturing business in Stellenbosch.

"We believe we can assist the winners with both financial and non-financial support to accelerate their path to success," says Feinstein, who calls upon the services offered by the sponsors of the competition to assist.

These include FNB, the lead sponsor and funding partner, the Seda, Microsoft, Khula enterprise finance, Gauteng Enterprise Propeller, Western Cape provincial government and Red Door, Mpumalanga provincial government, Eastern Cape Development Corporation, SA Institute for Entrepreneurship, Softstart BTI, Raizcorp and INSEAD, which is the mentorship partner.

Enablis and its partners continue to invest in the competition with a view to assisting as many entrepreneurs as well as 18 to 24- year-olds who Feinstein believes have "bleak prospects for the future".

"We want to help entrepreneurs build sustainable businesses for themselves," he says.

Financing for Young Entrepreneurs

2010-01-14T20:17:00.001+02:00

An increasing number of young people are opting to become an entrepreneur as their career of choice. With entrepreneurs such as Richard Branson, Steven Jobs, Duncan Balentine, Peter Jones and numerous others are receiving an increasing amount of air time in the press and young people becoming ever more independent, becoming an entrepreneur through starting their own business is an attractive option. So if you are a young entrepreneur and you have your business plan drawn up or have used the latest business plan software to write your plan yourself, what are your options for business finance?

The entrepreneurial drive for twenty-somethings is increasing every year, and there are plenty of successful entrepreneurs who began their enterprises well before their twenty-fifth birthday. Age doesn't matter when it comes to building a strong business plan and coming up with great ideas; in fact, one could argue that the younger generations are even more creative. One of the main problems that holds young entrepreneurs back is financing; they don't have the experience or the business history to secure financing through traditional means.

My best advice for the young entrepreneur is to plan as much as possible in advance. You can't walk into a bank or credit union with a sketchy idea for a business and expect to be handed a check; instead, you'll have to go to even more extensive means in order to get your point across. A great concept is all well and good, but you'll need more than that to convince a lender.

Your first step will be to put together a notebook that details every aspect of your potential business. For example, let's say that you want to open up your own restaurant. Your notebook will include possible locations, key demographics, furnishings, decor, utensils, estimated number of employees, building permits, equipment and everything else you will need to start the business. You should include pricing estimates from at least two vendors for each item as well as pictures if possible. The more information you include in this notebook, the better prepared you will be.

Next, young entrepreneurs must consider all possible sources of financing. In most cases, it will be better to seek several small sources of financing from several different lenders. For example, if your first round of financing requires $100,000, you will be better off seeking four sources of financing of R25,000 each. This increases your chances of being approved and lets the lender feel more comfortable in approving the loan.

Many young entrepreneurs make the mistake of seeking financing in the form of credit cards. Even if you can obtain a credit card with a sufficient credit limit, I would advise against it. Credit cards are dangerous when you don't know how quickly you'll be able to pay them back, and all start-up businesses - particularly for young entrepreneurs - stand on shaky ground for at least the first year.

It is also difficult for young entrepreneurs to get financing through angel investors, which are wealthy individuals who take large risks in providing finances to start-up businesses. Most angel investors are more comfortable dealing with experienced business owners who are pursuing new start-ups rather than young entrepreneurs who are "more likely" to run their businesses into the ground. However, you might have some luck pursuing financing with angel investors in the smaller increments I mentioned above. You'll just have to remember that small investments are not necessarily high priorities, so it might take some time.

And finally, many young entrepreneurs get their starts by seeking financing from relatives. If you have wealthy parents, grandparents, aunts, uncles or friends, you might consider approaching family members with your start-up business plan. This will likely depend on your relationship with that person and your track record for handling debts and loans, but it is certainly something to think about if you think a relative might be ammenable.

The one big trap to which young entrepreneurs frequently fall victim is a lack of patience. Make sure that you are patient, work hard to achieve your goals and keep your eye on the prize.

The process of finding investment for a new venture

2010-01-14T16:48:00.001+02:00

Irrelevant if you are a new or growing business, for most business owners the time will come when further business investment is needed. With many entrepreneurs realising that going to the bank for a loan is no longer the only or most beneficial avenue, other sources of business finance needs to be considered. So what are the steps that you need to take for this to happen? Michael Weaver, chief executive at investor network Beer & Partners, has compiled the following guide to securing funding.

1) Decide level of funding required
The level of funding required is largely dictated by what stage of evolution the business is at. Established companies with revenues, profits and an order book, and that are seeking working capital or replacement of bank debt will typically fall in the R350,000 to R1.5 million bracket. Broadly speaking, start-ups or early stage businesses seeking funding for final product development/take product to market will tend to require R150,000 to R450,000. In both cases, the amount must be sufficient to fund the delivery of the planned stage or end result.

When considering the amount of funding required, businesses must take the long-term view. It is important that the level of funding is sufficient to see the business through all of the identified stage of development. Otherwise they risk not achieving the desired goal and having to halt progress part way due to cash running out.

Remember to:

· Take the long term view
· Identify your end goal and ensure the funding is sufficient to get you there

2) Put in place a strong management team
Few early stage businesses have complete management teams and very few can claim to hold all the skills required to maximise the potential of a business. These skills include general management, finance, marketing, sales, production and licensing, to name a few.

Entrepreneurs who can recognise their weaknesses as well as their strengths and plan accordingly are well placed to raise investment. Many of the complementary skills required are available on a freelance or part-time basis, sometimes on a sweat equity basis and can on occasion be provided by an investor. Sweat equity is where someone invests time and skills in exchange for a shareholding stake in a company instead of cash.

There are different general management skills required to run a small business compared to those for required for larger firms. It may even be that the founder is not best placed to lead the company through all the stages of its growth and will at some point need to step aside.

Remember to:

· Consider what skills you and your existing team have and what needs to be brought in
· Be broadminded about your relationships with employees – putting someone on the payroll is not the only option

3) Create a business plan identifying the strategy
A solid business plan that identifies the strategy is crucial. The plan must contain a commercial idea which will provide an eventual profit for investors or, as a minimum, sufficient profit to repay the interest and the principal on a loan. However, not all plans need to be unique as many ‘me-too’ but better businesses are established to take advantage of a niche or to stake a claim for a share of an existing market.

The business plan must set out the key factors that determine success or otherwise of the business. In addition, the entrepreneur should be prepared to monitor these factors and not be afraid to set out the risks. If an entrepreneur does not recognise the risks, it may be either because they do not fully understand their own business or they are ill-prepared to manage these risks adequately.

Remember to:

· Always have a business plan
· Only include as much within the business plan as is necessary to keep you on track and to give investors a clear idea of where you are taking the business and how you are going to get there

4) Determine a sensible valuation of the business
Early-stage businesses are notoriously difficult to value. There are different ways to approach this. One rule of thumb is:

· A solid business idea alone: R10,000
· A solid business idea with a reasonably presented business plan: R50,000
· Both of the above, plus a good management team with relevant CVs: R250,000
· All of the above, plus a sale: any figure upwards of R500,000

A perhaps better approach is to apply the rule of thirds, with the valuation split between the inventor, the management team and the investment. As such, the level of funding sought determines the post-money valuation. This ensures that the management are sufficiently incentivised to drive the business forward. It also ensures that investors can retain an important stake after second and third round funding which is sufficient for them to make a respectable rate of return on final exit.

However, the bottom line is that the valuation is essentially what a willing investee will accept and a willing investor will pay.

Remember to:

· Be realistic
· Make sure you can justify the valuation
· Don’t be too greedy – remember that if you fail to secure any funds you may not have a business that can go forward

5) Define the unique selling points (USP)
Aside from coming up with a compelling business proposition, the entrepreneur must ensure that nobody else is offering exactly the same product or service, or have a particular USP which makes it different and potentially more profitable than competitors.

If the entrepreneur is certain that any competitor, even one with unlimited resources, will take at least two years to come up with the same product, then they are in a strong position to claim that they have a chance to establish their brand. However, in this example, it could be a case of weeks or a few months. As a result, the market will be saturated by other similar products, some of which may be backed by known brands.

Another valid USP is a unique management team mix. However, this would have to be very specific as it could be replicated. Alternatively, a patent or other Intellectual Property Right by definition would fit the bill perfectly. There are many further examples, but the crucial point is to have a clearly defined view of how viable the business proposition is in the long term.

Remember to:

· Research the market
· Research the competition and put yourself in the mind of the competition to figure out how they will react to you entering the market

6) Protect your business
Depending on the business, there are times when protection is an absolute must-have. An easily replicable product for example, if protected, can be a great investment. Entrepreneurs should also ensure they understand how patents and other forms of intellectual property work, which may require seeking professional advice.

Without replacing professional advice, it is worth remembering that once an idea is in the public domain, it is not possible to then apply for a patent. Therefore, it would be a mistake to assume it is possible to find the funding first and then look at a patent – if investors have told people the idea, the business will not be able to apply. There are many forms of protection for different aspects of the business and products. Patents are just one, which is why professional advice is very worthwhile.

Remember to:

· Seek professional advice

7) Prepare your business for due diligence
Due diligence is usually carried out when an investment or acquisition is going to be made and is the process of checking the facts of a business, including its market, key staff, directors, financials and legal position. Any investor and many banks who do not have a direct relationship with the entrepreneur will require a level of due diligence on their affairs before investing or loaning funds to the business. However, there is a real danger that investment deals will fall through if factors are uncovered during the due diligence process that were not already apparent. It could be that the investee had failed to recognise the point as relevant.

Companies can save themselves a lot of time and energy when negotiating an investment by completing much of the groundwork and making it available to the bank or investor during negotiations. There are certain legal advisors or financial services professionals who work with business investment networks who can provide specific assistance around due diligence. This includes providing a pre-packed questionnaire which reduces the risk of deals falling through and minimises legal costs on completion.

Remember to:

· Always expect due diligence to take place so be prepared
· Seek professional advice if you are unsure how to do this

8) Appoint a solicitor
It is essential to appoint a solicitor who has experience of similar forms of investment in small businesses. Just one example of where this is required is that, in line with the Financial Crime Prevention Procedures, the business and the solicitor will have to verify the identity of investors before accepting any investment. This will require a copy of an official photographic ID such as a passport, driving licence, services ID card or national ID card.

Remember to:

· Make sure the solicitor you choose has the relevant experience
· Make sure legal charges are commensurate with size of investment and try to obtain fixed fee for the work

9) Have an exit plan
Businesses that are a lifestyle plan for the entrepreneur often find it difficult to attract investors. One example is a business that will provide the entrepreneur with long-term employment and remuneration but which they will want to continue with until retirement. However, in these instances, a secured loan may still be viable. Having a well thought through exit plan is therefore a key element of obtaining investment. Exit strategies can take several forms, the most common of which are:

· A trade sale, which is arguably the most common
· A listing on a stock exchange, such as PLUS, AIM or London Stock exchange
· A management buyout.

It may be difficult for an entrepreneur to imagine selling their business when they are just starting it. However, most investors are looking for capital gains rather than a dividend stream so will want to know how they will make their profit. In many ways, the actual form of exit is less important than the principal that there will be an exit at some point - generally within three to seven years.

Remember to:

· Always have an exit plan in mind
· Ensure that the route to exit is front of mind when speaking to any potential investor

10) Find an investor
Arranging investments is a category of regulated activity which can only be carried out by firms authorised to do so by the Financial Services Authority (FSA). This must also be done with information authorised by a FSA-approved firm. It amounts to acting for a business with the expectation that they will be introduced to an investor. Direct approaches to potential investors by individuals can be a criminal act and result in the individual making the approach becoming personally liable for any losses incurred by an investor. This is unless the individual has received certain certifications from the investor before seeking investment.

The FSA aims to protect consumers; both companies and investors. It does this by regulating the way in which financial service providers operate, paying particular attention to the integrity, skill, care and diligence with which they are run and to the competence of those people delivering services.

Regulations under the FSA lay down, in some detail, the framework within which approaches to investors must operate in order to comply with the Financial Services and Markets laws.

Remember to:

· Take heed of the legal requirements when seeking investment
· Find a reputable business angel network or corporate finance house that has a proven track record
· Ask the right questions

To find business finance or investment in South Africa visit the SA Investors Network.

Financing for home based entrepreneurs

2009-12-07T13:13:00.002+02:00

A key issue for many businesses hoping to start or grow is the ability to raise financing for the business. Financing your business can be challenging despite so may sources available today and will firstly require a well written business plan. With bank lending becoming less popular with many entrepreneurs, business owners are increasingly turning to alternative sources of funding. As the owner of the business you are responsible for the rasing of finance. Few others in your business will be as committed to the process as you may be.

With the use of the internet, trade publications and newspapers it wont be long until you have a number of possibilities for business financing. However, while venture capital may be overflowing for the Internet start-ups, the real scenario for small businesses (and worse, home-based businesses) is far different.

Then again, business means risk, and success comes to those who focus on their goals and actually do something. You first step should be to start making phone calls -- talking to people, and making appointments to discuss your plans with the people who have money to invest. When you're looking for money, it's essential that you get the word out to as many potential investors as possible.

There are several sources to consider when looking for financing. Don't make the mistake of thinking that the only place you can find the money you need is through the bank or finance company. Explore all of your options before making a decision. These include –

Personal Savings.

The first place to look for financing is right at home and personal savings and assets are the easiest source of capital. If you have money set aside, you use it instead of borrowing or rounding up investors. Or, you can take an inventory of items you do not need and have a garage sale. Most people are pleasantly surprised how much cash they can raise in a single weekend. You can also use your stocks, bonds, pension plans, life insurance policies and real estate to raise the needed capital. Those who own homes oftentimes secure equity loans and use the proceeds to start a business.

However, most beginning entrepreneurs don’t have adequate personal savings to fund a business start-up. Others, on the other hand, have savings but refuse to dip into their piggy bank for a variety of reasons. It may be their retirement money or for emergencies; while others would rather use their savings as collateral and borrow against it at a low interest rate.

Family Members and Friends.

Next, turn to members of your family or close friends who have faith in you and want to see you succeed. Borrowing from a friend or relative is generally the most readily available source, especially when the capital requirement is smaller. Relatives and people you know need fewer assurances and are more open to your ideas than professional investors. They are also more patient if your business takes longer than expected to get off the ground. Offer to repay them through profit sharing.

If you are borrowing from family members instead of asking them to invest, maintain a very businesslike and impersonal procedure. To avoid putting strain on the relationship, it is better to draw up a formal agreement in order to put the terms of the loan in writing. It is important to view the participants as business associates.

Venture Capitalists.

Venture capitalists are professional investors who may be in charge of a large pool of capital gathered from a range of sources. These firms invest in new, even high-risk or speculative businesses without a proven track record, with the potential for rapid growth and high returns in a short time. They generally want equity or part ownership of a business in exchange for substantial returns (25 to 40 percent or more) when they exit typically in three to seven years. Particularly in the Internet sector, several venture capital firms have achieved capital gains of 300 to 500 percent, which are used to offset by a wide margin any losing ventures. These firms are mostly interested in potential projects that require R500,000 or more because of the high cost of investigation, evaluation and administration. While a venture capital firm may receive as many as 1,000 business proposals a year, it will typically investigate less than 10 percent and may actually invest in only 3 or 4 percent.

Angel Investors.

Angels are private investors interested in making more on their capital than they can make through traditional markets such as mutual funds or publicly traded stocks. These “angels” can be your accountant, attorney, doctors or other individuals who seek out new businesses to invest in return for equity ownership. Usually providing additional capital in the range of R25,000 to R500,000, expect angel investors to demand high returns for their investments. Relative to venture capitalists, though, angel investors are less demanding and can also be expected to provide expert guidance and mentor the start-up.

As you explain your plan to them, and ask for their advice, casually ask them if they'd mind letting you know of, or steer your way any potential investor they might happen to meet. Do the same with your banker. Give him a copy of your prospectus and ask him if he'd look it over and offer any suggestion for improving it, and of course, let you know of any potential investors. In either case, it's always a good idea to let them know you're willing to pay a "finder 's fee" if you can be directed to the right investor.

Professional people such as doctors and dentists are known to have a tendency to join occupational investment groups. The next time you talk with your doctor or dentist, give him a prospectus and explain your plan. He may want to invest on his own or perhaps set up an appointment for you to talk with the manager of his investment group

Note, however, that most angels and venture capitalists do not invest in home businesses.

One key to a successful business start-up and expansion is your ability to obtain and secure appropriate financing. Raising capital is the most basic of all business activities. Remember, it takes money to make more money.

Flip open trade publications and business newspapers, and you will be bombarded by reports of abundance of available capital for entrepreneurial start-ups, particularly for the dot.coms. The financial news would have you believe that more money is available for new business ventures than there are good business ideas.

However, while venture capital may be overflowing for the Internet start-ups, the real scenario for small businesses (and worse, home-based businesses) is far different. Capital is hard to come-by, especially if: (a) you do not have a good business idea or business plan that will make rich backers run to you in the hope of multiplying their savings exponentially; and (b) you may have a good business idea, but you do not know anyone who matters. The problem is that most beginning "business builders” doesn’t know what to believe or which way to turn for help.

Then again, business means risk, and success comes to those who focus on their goals and actually do something. Who knows, you may be lucky and dispel stories of “tight money.” You first step should be to start making phone calls -- talking to people, and making appointments to discuss your plans with the people who have money to invest. When you're looking for money, it's essential that you get the word out to as many potential investors as possible.

There are several sources to consider when looking for financing. Don't make the mistake of thinking that the only place you can find the money you need is through the bank or finance company. Explore all of your options before making a decision. These include –

Personal Savings.

The first place to look for financing is right at home and personal savings and assets are the easiest source of capital. If you have money set aside, you use it instead of borrowing or rounding up investors. Or, you can take an inventory of items you do not need and have a garage sale. Most people are pleasantly surprised how much cash they can raise in a single weekend. You can also use your stocks, bonds, pension plans, life insurance policies and real estate to raise the needed capital. Those who own homes oftentimes secure equity loans and use the proceeds to start a business.

However, most beginning entrepreneurs don’t have adequate personal savings to fund a business start-up. Others, on the other hand, have savings but refuse to dip into their piggy bank for a variety of reasons. It may be their retirement money or for emergencies; while others would rather use their savings as collateral and borrow against it at a low interest rate.

Family Members and Friends.

Next, turn to members of your family or close friends who have faith in you and want to see you succeed. Borrowing from a friend or relative is generally the most readily available source, especially when the capital requirement is smaller. Relatives and people you know need fewer assurances and are more open to your ideas than professional investors. They are also more patient if your business takes longer than expected to get off the ground. Offer to repay them through profit sharing.

If you are borrowing from family members instead of asking them to invest, maintain a very businesslike and impersonal procedure. To avoid putting strain on the relationship, it is better to draw up a formal agreement in order to put the terms of the loan in writing. It is important to view the participants as business associates.

Venture Capitalists.

Venture capitalists are professional investors who may be in charge of a large pool of capital gathered from a range of sources. These firms invest in new, even high-risk or speculative businesses without a proven track record, with the potential for rapid growth and high returns in a short time. They generally want equity or part ownership of a business in exchange for substantial returns (25 to 40 percent or more) when they exit typically in three to seven years. Particularly in the Internet sector, several venture capital firms have achieved capital gains of 300 to 500 percent, which are used to offset by a wide margin any losing ventures. These firms are mostly interested in potential projects that require R500,000 or more because of the high cost of investigation, evaluation and administration. While a venture capital firm may receive as many as 1,000 business proposals a year, it will typically investigate less than 10 percent and may actually invest in only 3 or 4 percent.

Credit Cards

Some entrepreneurs use several credit cards to provide a substantial cash bankroll for the business start-up. In fact, credit cards are used by nearly one-third of start-ups. It is relatively easy to obtain, and eases the bookkeeping systems. However, using credit cards to launch a business is the least wise, since credit card money is the most expensive money that you can borrow. If you intend to carry a balance, the annual interest charges (12 to 21 percent) are quite steep. While credit card advances is one of the most commonly used sources for start-up financing, it is dangerously close to gambling.

Small Business Investment Companies

Don't overlook the possibilities of the Small Business Investment Companies in your area. Look them up in your telephone book under "Investment Services." These companies exist for the sole purpose of lending money to businesses that they feel have a good chance of making money. In many instances, they trade their help for a small interest in your company.

Business Development Commissions

Many states have Business Development Commissions whose goal is to assist in the establishment and growth of new businesses. Not only do they offer favorable taxes and businesses expertise, most also offer money or facilities to help a new business get started. Your Chamber of Commerce is the place to check for further information on this idea.

Money Broker or Finder

Organiations such as these normally take your prospectus and circulate it with various known lenders or investors. They always require an up-front or retainer fee, and often may nor be able to guarantee getting you the loan or the money you want. There are many very good money brokers, and there are some that are not so good. They all take a percentage of the gross amount that's finally procured for your needs. The important thing is to check them out fully; find out about the successful loans or investment plans they've arranged, and what kind of investor contacts they have all of this before you put up any front money or pay any retainer fees.

Start thinking about the idea of inviting investors to share in your business as silent partners. Think about the idea of obtaining financing for a primary business by arranging financing for another business that will support the start-up, establishment and development of the primary business. Consider the feasibility of merging with a company that's already organized, and with facilities that are compatible or related to your needs. Give some thought to the possibilities of getting the people supplying your production equipment to co-sign the loan you need for start-up capital. This is truly the age of creative financing.

The truth is this: Now is the time to make your move. Now is the time to act. The person with a truly viable business plan, and determination to succeed will make use of every possible idea that can be imagined. And the ideas I've suggested here should serve as just a few of the unlimited sources of monetary help available and waiting for you!

Investment Rands are not out of the question for a home business, but it isn’t a likely situation unless your business has the potential to gain significant stock value. This also means that your company will need to be larger than just an extension of yourself. To attract investors, you will have to make the case that the business could be sold at some point to another person or company that could pick up where you left off and continue to grow the business. If this is the case with your enterprise, you might consider going through the pain to gain investors, but be prepared to learn how the system works before you send off proposals.

Business Plan Errors to Avoid

2009-11-26T13:55:00.000+02:00

Writing a business plan can be a challenging yet illuminating process. If you're following this blog you would have read about the importance and usefulness of a good business many times. In as much as it is important, writing an investable business plan is also a bit of an art to many and the more plans you come across the more obvious it becomes.

When speaking at events and workshops on the topic, "what re the common errors made by entrepreneurs and what should I avoid doing when writing my plan" I'm often asked. I recently came across this useful bit of comment from the guys at Inc magazine about this exact issue and I must say that I could not have put it better myself.

1) Being All Things to All People
You cannot expect a business plan to appeal to every possible audience. With this in mind, try to pick one business model, and to focus on one industry or one problem. Otherwise, you risk spreading yourself too thin, and potentially creating a sprawling plan that makes a bad first impression.

2) Being Boring
If a potential client gets two pages into your plan and is bored, that's a terrible sign. It is important to have the reader interested right from the executive summary on the very first page. And don't neglect your cover page: a well-designed logo never hurts.

3) Measuring the Size of the Market Too Optimistically
Although it may seem impressive if you project vast markets and the potential for huge sums of revenue, outsize financial estimates often appear gimmicky to investors. Worse, big numbers often make you sound as if you don't know what you're doing or how hard it will be to penetrate your target market. Don’t make big promises unless you're absolutely sure you can keep them.

4) Lacking the Confidence to Sell Your Product
In an effort to portray confidence, too many business plans ignore the competition that a new business will face. Doing so betrays a lack of sophistication. Few if any ideas face zero competition. Even if your concept is completely original, you should take into account forces that compete with your product or service, including different solutions to a problem, different ways that customers might choose to spend their money, and inertia in the marketplace.

5) Repeating Yourself Too Much
Avoid repeating a few catchphrases and a few simple ideas in ten different formulations. Nobody wants to hear the same thing over and over again. Be sure to keep your plan's fundamental message consistent throughout, but employ creative language and appealing imagery to flesh out your ideas.

6) Using Too Much Jargon
Remember that not everyone in business is familiar with cross-industry lingo. If you have a background in a specific industry – this is especially true in science and engineering – try to use simple, specific, and concrete phrases to describe your business. Rely on general terms that most everybody will understand.

7) Not Being Consistent
Eliminate contradictions. Make sure that the information in your plan is consistent — that, for example, a financial chart deep within the plan does not undermine a fact used in an earlier section. Make absolutely certain that every fact about your industry, the market, and key competitors is accurate and readily verifiable.

8) Failing to Incorporate Feedback
Presenting a business plan about which you have not received feedback is an easy amateur mistake to make. Remember: Presenting to a top investor a draft business plan that contains silly errors or gaps in logic is worse than presenting no plan at all. Try reaching out to a few friendly contacts who have vetted business plans in the past before you begin to share it with qualified potential investors. However....

9) Taking Too Many Perspectives Into Account
...Do not go so overboard in anticipating lines of questioning or identifying possible flaws in your thinking that a reader will have a hard time following the narrative thread. Make sure you address some likely investor objections, but balance the desire to be clear-eyed with the overall objective, which is to make a persuasive pitch.

10) Failing to Acknowledge the Competition
Successful plans come in all shapes and sizes and formats, so don't worry about crafting one that looks and reads exactly like every other plan that's out there. Your goal isn't to fit in; you want your business plan to stand out. Remember: If you create a proposal that expresses your idea and your personality, you will be more comfortable and confident when you are called on to present it.

Happy planning!!

Silver Lining Provided by Entrepreneurs

2009-11-23T21:55:00.000+02:00

Those of us passionate about entrepreneurship will quickly tell you that the solution to any economic problem lies with the innovative thinking of the entrepreneur. Coming up with new, innovative and ultimately profitable solutions to current problems is what entrepreneurs are all about. Whether its a business finance, business planning, customer retention, product or services related or marketing challenge, somewhere there will be an entrepreneur ready with a answer.

A new study has confirmed it. A close look at our entrepreneurial history reveals that entrepreneurship is an engine for job creation and economic growth even during difficult economic times. The study, The Economic Future Just Happened reveals that more than half of the 2009 Fortune 500 companies started in a recession or bear market. Similarly, nearly half of the firms on the 2008 Inc. list of America’s fastest-growing companies were launched during a recession or bear market.

This new study by the Kauffman Foundation’s Dane Stangler suggests that policies that support entrepreneurship also support recovery. It also reveals that job creation from startup companies tends to be less volatile and sensitive to downturns when compared to the overall economy. Are there factors in economic tough times that encourage potential entrepreneurs to take the risk of translating their ideas into a startup?

Several are identified. First, firm founders might perceive that their prospective competition might be weakened. Second, entrepreneurs may view unemployment as an opportunity to start a company. In other words, they beat unemployment with a startup. Further, unemployment presents the opportunity to tap into a larger pool of potential employees.

Naturally, not all new ventures survive, not even during healthy economy times. But although the link between new firms and aggregate economic performance is not so straightforward — some of the startups experience an initial expansion only to contract in its second to fifth year before expanding again — in times of recession, the important contribution of new firms regardless of their ultimate fate constitutes their immediate positive impact on job creation. New firms also contribute to innovation, thereby driving economic growth and often restructuring the economy with new patterns of economic activity.

Companies that reach the Fortune 500 and Inc. fastest-growing lists demonstrate strength, innovativeness and flexibility. These companies were once invisible, but their founders were able to turn a problem into an opportunity. I encourage you to read about some of these success stories in “Profiles in Innovation” section. I would not be surprised if some of the entrepreneurs behind these big companies failed for various reasons beyond a depressed economic environment before successfully reemerging. The entrepreneurial process is complex, but as this new study shows, risk-taking offers big rewards in an entrepreneurial economy both to the entrepreneur and the larger economy.

Knowing this, is the government’s response to this recession supportive of entrepreneurs? Despite the spur of entrepreneurship during recessions, obstacles remain, potentially mitigating the positive contributions of entrepreneurs during such difficult economic times. On top of the list is perhaps the tight capital market. In this regard, Financing the Entrepreneurial Recovery: A Kauffman Foundation Summit, offered interesting insights. Its participants, which included economists, researchers, investors, and entrepreneurs, discussed and debated a wide range of policy recommendations. Most urgently, they called for relief from the strangling costs of providing health care and Sarbanes-Oxley compliance. When asked for new models of financing entrepreneurs, participants expressed strong support for the continuation of the SBIR program, federal support for university proof-of-concept centers, and a national tax credit for angel investments.

More is sure to come from this and other similar discussions, but one thing is certainly clear – entrepreneurship is the path forward to recovery.

Jonathan Ortmans is a senior fellow at the Kauffman Foundation where he focuses on public policies to promote entrepreneurship in the U.S. and around the world. In addition, he serves as president of the Public Forum Institute, a non-partisan organization dedicated to fostering dialogue on important policy issues.

Supporting more than 14 000 small businesses

2009-11-05T12:50:00.000+02:00

Latest figures suggest that various government incentives with services like business finance and business plan support have helped over 14 000 small firms in the last 12 months alone. SEDA, with the help of well chosen alliances such as SA Business Plans and the South African Investors Network is delivering on its promise of supporting the economy of South Africa through helping small business owners everywhere.

A recent article on the SouthAfrica.info website explains:

South Africa's Small Enterprise Development Agency helped over 14 000 clients with services ranging from business planning and registrations to cooperatives support and access to markets in 2008/09.

In all, 199 830 potential and existing small businesses accessed the agency's services through its 42 branches countrywide, an increase of 7.3% over the previous year.

Briefing a National Council of Provinces committee in Cape Town this week, Seda CEO Hlonela Lupuwana said that out of those, 46 695 clients' needs were assessed and 14 373 were helped.

The Seda technology programme assisted 835 small businesses with a total turnover of R129-million, through its network of 27 incubators, and also helped to create 224 new small enterprises, Lupuwana said.

Its Community Private Public Partnership programme, which offers support to co-operatives and community-owned projects, has also been revived.

In-house advisors
Seda had decided to limit the use of consultants to the supply of more technical services, and to 20% of all services offered by Seda, with the remainder being offered by in-house advisors, Lupuwana said.

Last week, a group of 25 Seda business advisers embarked on a seven-day visit to Taiwan, where they were expected to gather more diagnostic skills and training on helping business owners.

Another group of 25 advisers were expected to visit Brazil later this year, Lupuwana said, adding that the visits were a cost-effective way of supporting advisers as Seda only had to pay for "minor expenses".

Forging partnerships
Lupuwana said a random survey of 902 clients had shown that 80% of clients found that Seda's assistance had a positive effect on their business.

This support had come amid limited resources, and despite a six-month moratorium on the provision of all services by the agency to small enterprises.

The limited budget – the agency received R331.2-million for 2009/10 – was a "major problem" in terms of meeting the agency's targets.

Lupuwana said the key to widening the agency's support on a limited budget would be the partnerships it could forge with key partners such as provincial and local governments.

In the Eastern Cape, for example, a number of municipalities had donated buildings and paid for rent so that Seda centres could be set up there.

Source: BuaNews

Business Finance in Difficult Times

2009-10-30T16:02:00.001+02:00

Although many small firms have been experiencing difficulties in the current economic climate, both with trade and accessing
business finance , many smaller businesses are booming. So what does the future hold for small businesses in South Africa?

Both entrepreneurs and small business experts have said that we are through the worst, while other believe it may be that a W shaped, basically a short but unsustainable recovery. Trading conditions may continue to be challenging. Business finance from risk-averse lenders may continue to be an issue and as the case currently, Angel finance together with other types of funding may be the only option available to business looking to start or grow.

Given that small business account for 60% of all businesses in the South Africa, it will be this sector which will help lead the country out of recession. But is the SME sector currently in a fit enough state to effectively kick-start the economy? Many SMEs outside the financial, property and transportation sectors have not felt the same pain as larger businesses. Many continue to have good orders, profitable work and, if finances were pre-arranged before the clampdown by the banks, many have little difficulty in continuing financial arrangements.

The outlook is difficult but workable. Strangely, where the greatest challenge to SMEs lies is when the economy begins to recover.

The climb out of recession is the time when the greatest number of businesses fail. Those failures are not caused by poor sales or losses – many of those businesses that fail are profitable and expanding.

Rather, the reason is simple: a growing business needs increased working capital – it needs cold, hard cash. Cash to fund the next sale, cash to fund the next increase in turnover.

A lack of working capital can lead to over-trading. Despite increased turnover and profits a business may not generate enough cash to cover its daily needs. It’s a risk all companies face. If a business has a conflict between profitability and cash flow, it must choose cash flow every time.

Being a profitable growing company also means a business has greater need for finance. As turnover grows, so stock grows along with the money owed to suppliers, tying up increasing amounts of cash in these areas.

So where can businesses get the finance they need to survive the upturn?

Banks are being tougher on businesses – reviews are more common, renewals tougher and banks are demanding increased security or other guarantees, suggesting shorter repayment terms or alternative finance options.

Banks want more information, projections and plans and on a more regular basis. If they don’t like what they see, or don’t see what they expect, they are increasingly likely to withdraw facilities. Despite that, the South African banking figures show that bank lending to non-financial businesses increasing by R100 million in May, but that was after the slump in April of R2.3 billion.

Business finance is out there. Businesses needing extra capital can look to peer groups or to venture capital. This venture capital comes from two major sources – either business angels or Venture Capital funds.

These individuals or funds put up money for shares – and they risk losing the money if the project fails. Demand for funding is increasing and there is less money available, but people still want good businesses to invest in.

Given the current recession, what do small businesses need to think about, and what should they do differently?

The simple answer is that nothing should be fundamentally different – the basics always apply in good and bad times: you need to be providing the products or services that customers want. Look at those organisations that managed to thrive despite the economic slow down. When times are tough you need to be selling the product or service that customers think of first when there is a specific need. Solid client relationships are also key. The relationships you have with your clients will help them to not only trust your product or service but also refer you to their friends and colleagues. Last but not least, ongoing market research to understand the needs and situations of your clients are essential. The better you understand your customers, the better you can provide them with the product or service that they require, at the price they are willing to pay.

Google Profit Means Recovery May Be Near?

2009-10-16T14:30:00.004+02:00

With the news today that Google has made record profits of $1.6 Billion for the last quarter, the good news is that it may be due to the fact that those advertising on the search engine is seeing light at the end of the tunnel.

For many small businesses Google remains the most effective advertising channel through its pay per click strategy where businesses only pay for the visits they receive from potential clients searching for something on specific. Mainstream advertising can be extremely expensive and often buying what small business owners can afford. But Google has revolutionized the way we look at advertising.

With many of the businesses we have started, advertising on Google has been a key contributor to the success we have experienced and moving forward this will keep on being the case. Press advertising is not only expensive but often difficult to measure in terms of results. Visits from potential clients to websites such as SA Business Plans and the Investors Network has soared and this is solely due to the increasing customer confidence in the future.

With the recent profits announced its clear that businesses are increasing their ad spend and web visitors, being the real power behind the increased inflow of profit is importantly clicking on ads and hence on the look out for products and services to purchase.

Getting Finance for Growing a Business

2009-10-08T16:11:00.000+02:00

Corry and Jaco Coetzee started their small business four years ago. They decided on a goods supplier to the local community as there was a clear gap in the market at the time and they wanted to have flexible working hours. Recently they decided to grow the business further and have now secured R5 250,000 in funding to expand. Here Corry shares her top tips for getting business investors on board.

Update your business plan
A clear business plan is essential. If you acquired funding for your business when you started up you will probably already have a business plan. Now is the time to update the plan to reflect your business and its needs as it is today. Without one people aren’t even going to look at you. You need to make sure you have done your research properly so when you get grilled you aren’t going to loose people’s confidence. It doesn’t have to be long, it just has to contain the key factors.

Consider business angels
Business angels invest capital in new businesses and can also give a huge amount of advice. We were introduced to ours through an angel network called Investors Network and secured R2 000,000. At the beginning we didn’t feel worthy of their help, but it’s amazing how many people are prepared to give advice and invest their money in your business.

Be realistic about how much ownership in the business you want to give away
If it’s too low you’re not going to win confidence in your investors. Obviously you want to give away as little of your business as possible so decide the maximum and the minimum first and stay within that.

Get a good business manager
It’s important to have a good business manager at your bank to get advice from. After building up a relationship with ours we managed to secure R2 500,000 with the help of a local business loan guarantee scheme. The very fact the bank was prepared to give us this amount of money meant other investors had more confidence in us.

Be resilient
You are going to get knocked back lots of times. It’s not a quick process. We emailed a lot of people, and I think it paid off to keep revising the proposal to make it look more professional until it got somewhere.

Get an accountant on board
Be sure to get professional advice, even if this means spending money. No matter how excited you are about your business, the investors are going to be even more concerned because it’s their money at stake.

Few things as exciting as starting a business

2009-10-01T15:50:00.000+02:00

Amongst all the exiting developments, projects and business deals from last year, one of the highlights for me was the successful start up of a community for entrepreneurs and investors where business ideas get funded. Together with my business partner, we have long dreamt of contributing to business funding to support entrepreneurs in South Africa. Finally we were able to launch Investors Network and today the business is going from strength to strength. During the process of doing this though, I realised just how much I love setting something up.

Amongst the many experiences I recall from setting up the business, what really stands out for me is the realization of the challenges that entrepreneurs face when starting a business in South Africa. The difficulties with telecommunication, the struggle with the banks, the many bits of paper work and the fact that almost everything takes much longer than first anticipated. But most of all the day we first opened the doors is what stands out most. Few things in the business world beats that feeling.

Starting a business is one of the best feelings you can experience (along with jumping out of an aeroplane – but that is for another day!) You realise that entrepreneurs don’t do these things just for money but for the sheer thrill. I have met many would be entrepreneurs seeking investment from me in the last few years. I do get turned off immediately if I suspect the only desire driving the team is money. It simply is not enough to keep you going.

I also remembered a quote from an entrepreneur that I had worked with on a project a few years ago. She said that you do not have a business until you have a customer. The events of last week brought that to life for me. Many of us come up with great business ideas and some of us may do something with this idea (like form a company) but very few take the critical step of turning that idea into a business. That is truly the scary bit – but it is about emotions rather than money.

Investors will not invest in a business that cannot prove strong customer demand. Sometimes all you need is a letter of intent or pre-orders and you have transformed your idea into a business.

My advice in this blog is to all of those of you who have a great idea but have not done something with it….

Go for it – make it happen. I promise you that even if you crash and burn – the thrill of having gone for it will give you a smile that will last for eternity. To misquote Dickens “Better to have loved and failed, than not to have loved at all”

All the best, and as always, I am happy to help

Where to find a business angel in South Africa

2009-09-23T09:42:00.001+02:00

When looking for business finance, the term business angel is perhaps not as well known in South Africa as compared to the US, UK and Europe. Business angels who are often individuals who are well of from previous business success, may have strong industry links in specific business industries and come with plenty of experience, unsurprisingly really can be a great asset to a new business.

It comes as no surprise that in some countries, business angels are preferred partners for business finance and moral support. 'Wow that sounds like a great option for my business' you may be thinking at the moment, so where can I find a business angel?

Contacts with business angels are often made informally. You really need to be keeping a look out for these individuals where ever you are and may find the ideal person amongst:

Personal friends and family.

Wealthy business contacts.

Individuals known to your professional advisers (eg your accountant).

Major suppliers and clients of your business.

You may want to approach an angel networking organisation such as Investors Network.
Many of the most active business angels use these services to find out about interesting investment opportunities.

You usually have to supply a credible business plan and financial forecasts as part of the registration process.

Once you are registered, the organisation passes information on to business angels. Typically, angels will attend presentation meetings (where you present your business to them) or receive bulletins.

In addition to the above you may also attempt to find Angel Finance through the business to business sections of various newspapers include advertisements from investors and from businesses looking for finance.

If you want to advertise your business, the advertisement will have to meet the newspaper's standards.

The benefits of angel finance is well known and although it may not be as straight forward as walking into your local bank to apply for funding, as a new business just starting out it will certainly be worth your while to get a business angel on board as soon as possible.

Business Plan help: writing the executive summary

2009-09-21T10:18:00.000+02:00

Today, with many organisations, especially those with much at stake preferring to opt for professional business plan consulting firms for business plan help, the art of writing a good executive summary for a business plan has largely been lost. With banks and business investors in countries such as South Africa, the US and a number of others, requiring a business plan before funding or business finance is considered, its easy to see why. So how do you write an effective and professional executive summary for your business plan?

The executive summary is the most important section of your business plan. It is normally the first section of your business plan that investors will read, and could be the last if it is badly written. An executive summary should describe the company, the product or service, and the unique opportunity your company is offering. It should also provide a short description of your management team and a summary of the investment you are seeking. Don't forget to tell the reader why you need the money and how and when they can expect to be paid back!

It creates a first impression (remember what your Mum said about first impressions!) in the Angel’s mind of both you and your business. Use clear and concise language and words that command attention, and excite your Angel.
Be honest. It is often tempting to exaggerate or Gild the Lily, but you WILL get found out eventually and Angels will not be happy. Angels like the truth. Your summary should promote trust and if "just one little white lie" creeps out, Angels start to look for the others. Now you are on the back-foot.

The executive summary is neither an introduction nor an abstract; it IS the business plan in miniature. It should stand alone and be interesting, concise and clear. It should take no more than 5 minutes to read and when finished the Angel should be able to say "So that’s what these people are up to"

Here are several common mistakes that can make your executive summary less effective:
Too wordy, and failing to get to the point. Angels are busy.
Trying to be all inclusive (it should be a summary)
Failing to show a unique or exciting opportunity
Failing to summarise the investment sought
Failing to generate interest in the reader

Some suggestions to combat these problems:
> Limit your executive summary to a maximum of 3 pages; 1-2 pages would be best
> Focus on the opportunity and explain why it is special
> Make certain that the opinions and claims in your executive summary are fully backed up by the other sections of your business plan.
> Use only concrete facts and figures that explain your business concept, market niche and financial projections.

Don't forget to include the details of your investment (the amount you need, what you will spend it on, and the return you offer your Angel)
Keep the Angel Investor in mind - why are they reading the plan and what response are you hoping to generate?

A good executive summary should demonstrate:

A business opportunity that makes sense

A clear plan for success

A capable management team

A clear, specific, and definable market

Significant competitive advantages

A solid and believable summary of the financial projections

An excellent chance for Angels to receive a healthy return

The outline of your executive summary will vary based upon your particular business. But regardless of the format, every executive summary should include the following areas:

The Opportunity
It should immediately grab the attention of your Angel. This is often best achieved by explaining why your business is different or unique. Clarify your business advantages, how you can break into your market first, the benefit of your proprietary product, or how research supports a significant customer demand for your product or service. Essentially, what differences or characteristics will lead to success?

The Product or Service Description
Describe your product or service in terms of its benefit to your potential customers. How does it work? What is it used for? Where is it sold? How much does it cost? How does the customer benefit? Remember to limit yourself to highlights in this section. Be brief.

The Market
Who is your customer? How large is your market? Who are the competitors? Why are you better? What are your market share projections? Your reader must be convinced that potential customers will have the want, need, and ability to purchase your product. Don't try to avoid the fact that you have competitors. Instead, explain how you can gain market share with your business advantages.

The Management Team
Describe the management and how they will lead to your success. Is it clear your team is well-rounded with the experience, expertise and capabilities to achieve the goals outlined in your business plan? Does your board of directors or advisors bring credibility and experience to the table? Be warned – management weaknesses will ensure that Business Angels will go no further.

The Finance Requirements
How much money has been invested to date? What are your earning projections for the next three years? What amounts are currently required? What will the funds be used for? From whom do you expect to receive your investment? What specific return do you offer an investor? What is the exit strategy, in terms of both time and return?
At what point in the writing process is it best to write your executive summary? There are three schools of thought. The first says prepare it before you write the rest of the business plan. The second says write it before, then again afterward to combine the best of both. The third says prepare the executive summary only after the rest of the plan is complete.

Which approach is correct? It's really a personal decision, but it has been our experience that preparing the executive summary when the rest of the business plan is complete is fairly effective. This allows us to summarize the plan after all the information has been laid on the table with the hindsight of compiling the entire plan.

Remember to review your executive summary many times and ask yourself whether it grabs the reader's attention. Will they be excited about your business? Will they want to read the rest of the business plan? If the answers to these questions are no, rewrite it. Show it to a friend or business associate and ask them to be critical. Many times after someone reads your executive summary they will say "It's great, but what about…?"

Most business plans are only given any concideration once the executive sumary has been read and created enough interest for the business finance provider or investor found what they were looking for within the executive samary. Best of luck with your business plans and for business plan help, don’t be afraid to ask or seek help.

Tips for Young Entrepreneurs

2009-09-16T22:27:00.000+02:00

One of the ma great things about becoming an entrepreneur is that there is no age limits. Any one young or old can be an entrepreneur and if I knew what I know now when I was 15 I would have started then. Young people often have few responsibilities and less to lose, plus with your whole life ahead of you, why not give it a try?

The entrepreneurial landscape today is of course much different from the one 20 years ago. With the benefit of the Internet and an electronic commerce not only have entrepreneurs have almost instant access to a world wide market but startup costs are of corse much lower.

In a recent interview with Business Link, Internet entrepreneur Marc Day, founder and creator of SwapGame.com spoke about the joys of being an entrepreneur, his challenges and what he would do differently if he started a business again:

Marc Day founded SwapGame.com Limited, an internet-based, games-rental subscription service, two years after graduating. A professional attitude and thorough research has helped him finance and build his business, set to achieve a turnover of £1 million in its fourth year.

What I did
Take time for thorough research
"After I left university I took on admin-type jobs just to get by. During this time I did lots of research into my business idea. I also carried out field research, questioning people coming out of video games shops. I got as many facts and figures together as I could and found out all the costs involved before I approached anybody for money.

"It took about 16 months. I wanted to go into the market as quickly as possible, but I knew I needed to cover every angle before I did. I knew people weren't going to throw money at me and that they'd want to know all the details. Besides, it was important I knew that the business was going to be viable too."

Explore all funding possibilities
"When I was first looking for start-up capital I approached private investors and venture capital companies, but they all wanted to see more experienced management in the company. It was a difficult situation because I didn't have the money to bring that experience on board. The feedback was always that I had a great idea, but they'd like to see me start the company and how it went first. It was very frustrating. "But I plugged away and eventually I got the money through loans - personal and family ones.

Importantly, I also secured a R300,000 bank loan. The bank was apprehensive, but I was able to use my parents' property as security and I made my father chairman of the company, which gave the bank more confidence. My father was experienced in business and I used him as a sounding board anyway.

"Two years later I wanted to raise working capital for expansion, so I used the Department for Business, Enterprise and Regulatory Reform Small Firms Loan Guarantee scheme (now replaced by the Enterprise Finance Guarantee). Age wasn't a factor at all. It was my track record that counted, the partnerships I'd made and my growth strategy. We got R1 000,000 and can go back for another R1 500,000 if we reach certain targets."

Show confidence
"A lot of my contact with people when I started was over the telephone and nobody questioned my age because I came over in a professional manner, knew what I was talking about and wasn't frightened of negotiating with people. I think that makes a big difference."

What I'd do differently
Scrutinise my business plan regularly
"I finalised my business plan when I got my finance and though I kept figures in my mind that I had to achieve I didn't look at the plan again properly until I entered the Shell Livewire competition. It was then, a year after starting up, that I discovered how high my packaging costs were and how that was impacting the business on a daily basis.

"I managed to trim those costs down by about 40 per cent and it really affected profitability. If I'd looked at my business plan after, say, six months, I could have made the business leaner much sooner."

Marc's top tips:
• "Get as many facts and figures together as early as possible to back up your ideas."
• "Find a mentor you can ask for advice and run new ideas past."
• "Keep plugging away - even when you come up against obstacles."

Business Idea: Micro Loan Guarantees Scheme

2009-09-09T20:13:00.002+02:00

This weeks business idea is all about business finance, albeit not the normal kind. Apart from the usual options to finance your business like bank loans, angel funding, Micro funding, covered recently in the Angel Investment Blog and of course venture capital, what about those who do not qualify for any of the above?

Recently on Springwise, a really interesting business idea was discussed, that of Micro loan guarantees. Based on the idea of California-based nonprofit organisation United Prosperity does not provide funding for micro businesses but rather providing loan guarantees.

A traditional micro loan or donation of R1000 delivers roughly that same amount to the entrepreneur in need, but providing a loan guarantee of the same amount can result in a much larger loan from a local bank, United Prosperity says—as much as R6000.00, in this case.

How does it work: Potential guarantors browse the United Prosperity site, which features a number of pre-screened entrepreneurs in developing countries. They then choose one to help, and contribute a loan guarantee of any amount through PayPal. United Prosperity then consolidates the guarantees on multiple loans for the micro finance partner involved and issues a guarantee, which is deposited as collateral with the local bank. With the assurance of that collateral, the bank is then willing to lend funds—the amount depending on the guarantee percentage it requires—to the micro finance institution, which in turn lends to the individual entrepreneur who was supported. The guarantor can track the entrepreneur's progress building their business, and when the entrepreneur repays the loan, the funds are returned to the guarantor's PayPal account. United Prosperity, meanwhile, earns interest on guarantee funds; it's also considering charging its partners a small fee for providing the guarantee.

Now in beta, United Prosperity cites many advantages to providing loan guarantees rather than simple p2p loans: the process allows recipients to develop a credit history, making future loans easier to obtain; it reduces the interest rates banks charge the micro finance institutions involved; and it better manages risk while providing a more scalable model. So far, 111 guarantors have used the site to help 105 entrepreneurs with more than USD 11,000 in guarantees. One to partner with, emulate, or otherwise get involved in...?

Our Opinion:

Strengths: Great idea for business investors who really want to make a difference. Also a great idea for the SA Government for that matter. Your investment (and small risk) go to a worthy cause, you get to give input and share your expertise. Small guarantee can grow into somethings substantial.

Down Side:Its difficult to see a down side here. Of course your monetary returns wont be nearly as high as a fast growing tech start-up investment but that is about it.

Conclusion: Great idea for both entrepreneurs and investors. As the entrepreneur behind the business you should not find it to hard to recruit investors, you should find it fairly easy to get a bank that goes along with the idea and although you may not make a fortune in cash, hundreds of livelihoods may be created and supported through your handy work.

Marketing Plan

2009-09-03T09:30:00.001+01:00

What is a marketing plan and what is the importance of this for someone writing a business plan, applying for business finance or starting a new business?

During a conversation yesterday with a decision maker at a well known South African business finance provider, I was pleasantly surprised when the it came to light that funding institutions in South Africa are increasingly looking at the viability of the marketing plan attached to the business plan when someone is applying for business funding.

To me this is logical. One of the biggest challenges a new business will face is to find and keep customers. It seems unthinkable that banks, SEDA, the IDC, angel investors and venture capital firms will not consider this part of your business strategy as key to future success.

Take a minute to consider the start-up process. It really dies not matter how good your idea for a product or s service is. If know one knows about it, it will remain as that, a good idea. With frightening statistics about business closure rates being banded about in so many articles and blogs today, the solution is a simple one. As a business you need to focus on finding clients and keeping them.

What is a marketing plan? Well it really depends on what type of business you are running. A marketing plan is a road map detailing the "route" you'll take to get your business noticed by potential clients. By following a properly crafted plan, you'll know what to do and why you're doing it, while avoiding some of the mistakes that can cost you money and future growth. When it comes to applying for business funding, the funding institution wants to know that you as an entrepreneur knows how to get your product to the market in such a way that those people buying your product will do so again in the future and maybe even tell their friends about you.

Without getting into to much detail and boring you with theoretical speak at a basic level you still need to consider your:

Product or service you will be selling and how that will benefit those buying it.
The Price you will be charging and whether this can be used as a marketing tool and how it will help you attract your customers.
Place of sale, whether it be on the internet, a physical location such as a shop, or which ever which way you can think of that is effective and cost efficient.
The Promotional method or how people will come to know about your product
The People who sell your product or service and this is especially important when dealing with people face to face. Your sales people and this providing the service is the face of your business, they need to reflect what you envision your business as being.

When starting or running a business these issues need to be thought through carefully and implemented with attention to detail and adjusted on a regular basis based on what works and what does not. It not rocket science, but it needs a marketing plan and constant attention to detail.

Business finance - Getting the best deal from your bank

2009-09-01T14:12:00.000+01:00

When applying for business finance through a bank there are a number of useful tips that you may want to consider to get the best deal from your bank. In the current economic climate where banks are a bit more risk averse and entrepreneurs often may op for alternative business finance its important that you know your way around the financing landscape.

New business owners often turn to the bank that holds their personal account when finding funding, but you should compare charges from at least four banks (for example, how much does it cost for cheques, deposits, standing orders and overdraft facilities). If you’re already trading, changing banks is now much easier than it used to be and it could save you money. For more advice, read our guide to

Many banks offer free business banking for a set period, but find out what charges apply after the introductory period. Ask what ‘free banking’ means – it may be free only if you’re in credit or your turnover is under a certain figure.

When choosing a bank ask these questions:
What support is offered? – Do they have a dedicated small business team, will you be allocated a specific adviser and is there support material, such as free websites and guides?
What services do they offer? – For example, do they offer internet or telephone banking? If so, do they charge for this?
How are charges levied? – Is there a fee per transaction or a one-off charge?
How close is it to your premises? – If you’re likely to have a lot of transactions requiring you to visit the bank, then proximity is a key issue.

How to keep banking costs down
Negotiate with your bank manager – Everything is negotiable, from overdraft interest rates and charges to loan repayment schedules. Get any special terms in writing
Reduce transactions – Try to avoid cash and cheques. Automation – direct debits, standing orders, internet banking – tends to be cheaper
Review charges regularly – Ask your bank manager to suggest how to reduce charges Earn interest – If you have extra funds, put them in a high-interest deposit account.

Make sure the charges are correct – Check any discrepancies between statements Avoid unauthorised overdrafts – Telephone and internet banking can help you keep track of your account, to see approaching problems What to do if the bank says ‘no’One in 10 business loans applications are rejected. If this happens, find out why, so you can then revise your plan and try again.

There is also non-bank capital available. The South African Investors Network has a list of institutions that help fund businesses. Usually funding depends on the owners being from certain communities, age brackets or geographical locations, as well of course the viability of the business idea.

Angel Investor Tips and How-to Slide Show

2009-08-13T21:22:00.000+01:00

If you have ever considered becoming an angel investor or wondered how to attract angel investment for your business then you may find either of these two slide shows extremely interesting.

How to become an Angel Investor

How to present your business idea to an Angel Investor

Enjoy!

Check out the SA Angel Investors Blog

2009-08-10T10:30:00.001+01:00

For those of you not aware of the SA Angel Investors Blog, it may be useful to to pay the blog a visit. They are currently featuring a number of great articles including:

Investor Partnerships the Key for Small Business

Where to find small business funding

Angel finance much more common than VC's

How to Attract Angel Investors

Let us know what you think.

Innovation Fund News

2009-08-10T09:49:00.001+01:00

The Innovation fund is once again offering some attractive incentives and business investment for entrepreneurs, this time in the renewable energy sector. The latest call for business plans and proposals close in the latter part of September. With just more than a month to go you should have enough time to tweak your proposal and who knows you may be the next idea to get funding and support.

Details are
The Innovation Fund, through its Technology Advancement Programme (TAP), invites all South Africans (inventors, techno-entrepreneurs, engineers and researchers), who are engaged in the research and development of novel and inventive technologies, to submit their proposals.

The investment sought must be for research and development resulting in a working prototype, or similar, which is ready for commercialisation. The proposed technology must be a renewable energy technology.

SA Banks see the small business market as key

2009-08-04T08:27:00.000+01:00

I was pleasantly surprised to see the article on the PRMinds website this morning, commenting on a recent report from on the South African banking sector analysis. Where entrepreneurs and small businesses has had to play second fiddle for years in the past due to the perceived higher risk, the recent economic slow down has really turned the tables and we now find that small firms may become the preferred market. Small business need start-up and growth funding and together with business investors, the banks play a key role here

The report states that 'We believe that the future of the South African banking sector lies in personal banking and the small and medium-sized business loans. The banks, in particular, should focus more on expansion of their operations in the domestic economy in coming years. In view of boom in Internet accessibility and mobile phone penetration, telephone and Internet banking has emerged as another key area for growth.' This will be great news for thousands of entrepreneurs and small business owners.

The report went further to say that 'The banks in the country continue lending despite economic slowdown in the world. The bank loans and advances grew at a CAGR of about 17.8% during 2002-2008. The demand for credit by the corporate sector picked up considerably in an attempt to expand production capacity and increase inventories to meet the growing household demand. Moreover, the demand for credit by the corporate sector has also been picking up in the recent years—despite the growing use by companies of non-bank sources of credit such as corporate bonds and commercial paper—driven by fixed investment and infrastructure spending.

This shows that there are still plenty of cash available for the small business sector, and a signal of intent by the banks to back the economy by boosting small business.

Funding Resources for Entrepreneurs

2009-07-30T19:21:00.000+01:00

When starting a business its interesting how steep the learning curve is around areas that you may not have considered before. Funding of course is one of those areas which, especially as a new or first time entrepreneur you may not have spend much time thinking about before.

Ive recently come across some extremely useful articles and funding resources on the Investors Network website, some of which you can find bellow.

Types of Business Funding for Entrepreneurs
How to Get Business Funding
How to prepare a small business for investment
Tips on getting business funding
Options for Funding a small business

And many more.. Happy reading

SA small firms not to bothered by slow down

2009-07-30T15:55:00.001+01:00

Great news for small business owners is that most of us seems to be coping very well with the recent economic slowdown. An resent research study on Entrepreneurs around the country have found that it does not have to be all doom and gloom and many businesses are maintaining business levels and even growing their revenues. The research is really just proving what we have been saying all along in that the flexibility and increased ability to respond to change in customer needs often provide small firms with an edge compared to their larger counterparts.

In a number of recent conversations with business owners, the subject often came up and more often than not the comments were made that if it had not ben for the large amount of column inches afforded to the slow down in the press, few entrepreneurs really would have known about the slow down simply from looking at their balance sheets and income statements.

The report mainly found that:

67% regard business as profitable
Only 5% have no or low confidence in surviving  

In addition to this we have also found that activity at the Investors Network has been business as usual. Business ideas are still receiving funding and investors are as interested as as they have been.

Please see below for the remainder of the research report I refer to above. Let us know your experiences on this.

Till next time,
Ben

   Although small and medium-sized businesses (SMEs) have been hit by the tumultous economic climate, they have proven to be remarkably more resilient than large corporates, according to the findings of a study into the impact of the recession on this sector.  The study, based on interviews with 2 500 business decision makers, was sponsored by Standard Bank in conjunction with Fujitsu and the Umsobomvu Youth Fund (operating as the National Youth Development Agency).   The research, released last week, also sought to test the sector's confidence levels, and small enterprises' ability to remain sustainable in a recession.  Principal researcher Arthur Goldstuck said small businesses were coping well amid tough conditions, which had seen South Africa experience its first recession in nearly two decades.   Said Goldstuck: "Make no mistake, they are bowed, but not completely beaten."   He said only 5 percent of SMEs were making a loss, whereas 67 percent regarded their entities as profitable, indicating a resilience on their part. Twenty-four percent of SMEs were breaking even, representing a 2 percent increase compared to last year.  "This percentage is fairly high and it indicates that any additional shock could knock these companies further over the borderline. But if they hold onto strategies that work for them, they should survive," Goldstuck said.  Only 5 percent of these businesses indicated that they had none or very low confidence to weather the recession, while about 36 percent said they were neither optimistic nor pessimistic, he said. He added that 28 percent reported that they had high confidence while another 31 percent recorded a very high confidence.  He said the aim of the survey was to provide a barometer of expectations for SMEs in the coming year, particularly as many business owners had never before done business in a recession.  Thami Mazwai, the director at the Centre for Small Business Development at the University of Johannesburg, and Nicholas Biekpe, the president of the Africagrowth Institute, said the findings were not surprising as not all sectors had been affected by the downturn.

  Mazwai pointed out that as the research was not sector specific, its findings were likely to have limitations.  "It would be interesting to look at small business in terms of sectors. For instance, small businesses in the automotive and textile sectors are bleeding heavily and many have closed shop," he said.  Biekpe said the apparent resilience of the small business sector had more to do with managing costs rather than organic business growth.  "To keep their heads above water, most SMEs are now cutting back on costs, which includes redundancies, marketing and delays or cancellations in investment on new projects," he said.  Biekpe added that every economic cycle had both positive and negative growth sectors.   "This means that some SMEs are better placed than others. In addition, some owners are naturally good at attracting and keeping clients during lean times."  Ezekiel Madigoe, the managing director of information technology company Mamapo Solutions, complained, however, that business was drying up and that banks were not willing to fund small firms.  He said government tenders were hard to come by as these were given to businesses with political connections, while big corporates preferred to work with small enterprises with sound financial standing.  His views were echoed by Titus Molefe of glass and aluminium company, Tit Glasses in the North West.  "People are postponing orders, some do not pay for months and months," he said.   Molefe had last year said he would employ about five contract workers in addition to his two permanent employees, but this had not happened this year.  However, Hlekani Mahlaule of Xongi General Trading, which manufactures duvet sets and clothing, said her business was booming and she had hired five people

By Lucky Biyase from BusReport

Richard Branson Comments on Business Start-ups in South Africa

2009-07-29T10:18:00.000+01:00

Richard Branson recently commented on a state of business start-ups in South Africa and it was evident that he not only sees huge potential in the entrepreneurial ability of South African entrepreneurs but also feels that much more still needs to be done. This article from the Business Report website

Virgin Group founder Richard Branson believes South Africa's failure to kick-start a vibrant small business culture is both a legacy of apartheid and the result of insufficient government support.

"You've got a whole generation (whose) parents were oppressed - and so entrepreneurship doesn't run in their families," Branson told Business Report in an interview on Thursday.

He was in South Africa to participate in a leadership summit and launch a range of initiatives, among them a R122 million disease control hub in partnership with the government, and a competition for five students to complete an incubator programme at the Johannesburg-based Branson School of Entrepreneurship.

An estimated 12 000 students at various tertiary institutions are expected to compete for the chance of receiving seed funding of R1.5m to develop their business plans.

Branson said that compared with a country like India, whose government was "much more supportive" of getting small businesses up and running, South Africa was dominated by big companies in almost every sector of the economy.

"In most sectors, you've got really big dominant companies. There aren't many sectors where that doesn't happen and therefore competition is needed. Virgin, in a small way, is doing that in one or two sectors," he said.

The Virgin brand in South Africa includes health and fitness chain Virgin Active, Virgin Mobile - a joint venture with Cell C - and Virgin Money, which three years ago launched a credit card marketed on the basis of a flat interest rate and fee transparency.

Branson said large companies with accompanying higher cost bases and inefficiencies provided the space for new, young companies to compete. "Small companies create many more jobs than big companies do," he added.

"Entrepreneurship is a crucial factor in creating a strong and sustainable future economy. I believe that encouraging entrepreneurship in this country… will help increase growth and jobs," he said.

Branson launched the entrepreneurship school in 2006. It is a project of the Virgin Group's non-profit foundation, Virgin Unite, in partnership with Cida City Campus.

Branson said the school aimed at providing seed funding for many entrepreneurs, and it was possible that much bigger investments would be forthcoming over time. "We're debating a whole new concept to get quite large sums of money."

Branson's own 25-year-old business empire, which employs 60 000 people in 30 countries, was launched with $300 that his mother gave him after she found a bracelet on the side of the road that nobody claimed.

"That enabled me to get my business going," he said.

Asked what small business he would consider starting in South Africa, Branson said: "Funny, a lot of students ask me that question… The problem is I suspect I'd have already done it if I thought there was a gap in the market."

Nevertheless, he saw "enormous opportunity" arising from global warming and the spike in fuel prices.

"If you can go into people's offices and go into homes, and say 'I can save on your electricity bill, give me 10 percent'. Find out how to cut down on carbon output. I would get knowledgeable about how to set about doing it. That's just one idea."

He advised entrepreneurs to go only into a business in which they had an interest. "You must see a gap in the market, and you must make a real difference to other people's lives," he said.
Article by INGI SALGADO

SA Business Optimism Grows

2009-07-22T16:07:00.000+01:00

Good new for South African business owners and Business Investors is that the report in the Times this week that business confidence in South Africa is on the up. If you are anything like me you may also be growing tired of the constant press of down turns and slow economic sow downs, so this news comes as a welcome respite.

From my own conversations with small business investors and SA entrepreneurs, opinion has been divided on the effect of the slow down. Many small businesses are growing and feel little effect apart from that they have been reading about in the press. On the other side there are also a number of businesses who are very much aware that consumers are careful with their spending. I do still believe that many businesses have their future in their own hands and a forward looking innovative approach seems to still be baring fruit for numerous business owners and entrepreneurs. The article from the Times can be seen bellow.

SOUTH African businesses are optimistic about the country’s economic climate.

These were the findings of the June Business Confidence Index compiled by the South African Chamber of Commerce and Industry, and which measures confidence in the economic climate.

But the report cites the recent 31.3percent electricity tariff increase by Eskom as one of the most significant threats facing business.
It said that by May 2010 the price of electricity will have gone up by 62.5percent.

The index recorded a score of 83.1 that, while far below last year’s June level of 92.6, was the highest recorded for 2009.
In March, the index was at its lowest at 78.9 before making gradual improvements in April and May.

Out of the 13 indicators, six had a positive impact on the index. These were liquidation levels, exports, vehicle sales, construction projects, precious metals prices and the rand exchange rate.

The negative indicators for the month were in manufacturing, imports, retail sales, inflation, private sector borrowing and real finance costs. The impact of share prices remained unchanged.
Sacci economist Richard Downing said: “Domestic and foreign demand for South African goods and services is strained and this has negative consequences for the supply side factors of production, namely labour, capital and operating overheads.”
Economists said the index was tracking the state of the economy fairly accurately.

Tony Twine, Econometrix director, said: “It certainly confirms the general business activity during the second quarter of the year. Vehicle sales, which were atrocious in March, recovered in May and slightly more in June.”
Standard Bank economist Johan Botha said, though the climate was still depressed, the economy was beginning to turn around.

“The rand has strengthened well over the year, which might have a negative effect on imports, but it also indicates that we are approaching the bottom of the cycle,” he said.
More details on this from the Times News Paper here

To read the Investors Network Blog, click here

How to get business funding: On Investment Network

2009-07-09T14:02:00.000+01:00

There is a great article on the Investment Network Blog this week, so if you are looking for business funding or know someone who is, here is the link.

How to Get Business Funding | investorsnetwork.co.za: "How to Get Business Funding"

Is Self Employment for you?

2009-06-24T09:19:00.000+01:00

There is a great article on the self-employment on Michael Gerber’s Blog today entitled The Self-Employment Myth. For those of you not familiar with Michaels work, he is a well-known American authority on small business issues and his main idea is that, if you want your business to be successful, you need to create it in such a way that you are able to duplicate the business without you as the driving force behind it. As so many small businesses and even larger organisations heavily rely on the owner to create value and run the business itself, this type of business will provide you as the owner with little more than a highly stressful job.

Whether you agree with this or not, it is an interesting point to consider, especially if you are building a business which you want to franchise or sell in the long term.

Best,
Ben

Business Plans

2009-06-10T15:48:00.000+01:00

What are business plans if it is not your best attempt at predicting what will happen with your business idea or concept and how it may turn out over a certain period?

As with any type of plan, the more specific the details the better the odds of the implementation stage being successful. I am often surprised at the vague plans with which people come up. After a recent talk I gave on business planning, the dean of a university business school who was attending admitted that even at her level of professional achievement, the business plans for different departments within the business school lacked the type of detail I was referring to. “I now realise that without being aware of it my team may see the business planning process as a bit of a ‘going through the motions’ process and hence the plans we come up with rarely contributes to the achievement of our goals.” This was a real eye opener for her and I am now working with them on their next series of plans to add detail and ‘realness’ to what they are planning.

How many of us have found ourselves carrying out tasks or processes for which we are not prepared. When this happens we miss the opportunity to perform at our best. Business planning helps us to be prepared for what is coming. Yes, I can hear you say that we don’t always no what is coming and cant prepare for everything. That is certainly true and imagine how tedious life would be if we could really see into the future, but being prepared for various scenarios, especially as far as resource availability and backup is concerned will go a long way towards you and your team turning the unexpected into a unexpected success.

This week, I’ve been reading two books that try to predict where we are going in terms of technology, our economy, health and culture. They are remarkable, exciting, and at times frightening, but they generally base their arguments on two fundamental assumptions. (I’ll be reviewing both books in my Blog in weeks to come, so look out for that. )

First, they assume that the future will tend to look like the present, only more so. They assume that trends and patterns continue over time, and so, for instance, they predict a continued focus on the environment. If your life continues the way it is, where will that take you? This is a vital question!

The second assumption is that people can and do change their minds. For our culture the future is to some degree unpredictable because people change direction. They learn from their mistakes and take corrective action. Nations and cultures, like individuals, respond to new information, make decisions and re-invent themselves.

You have that power! You have the ability to choose the life you want, if you are willing to do so.

The point is, you are in charge of your business and effective planning whether a business plan, growth plans or weekly performance or sales plan, puts your hands on the steering wheel of your business and ensures that you drive it to the destination that you choose!

When you look back on your life five years from now you will see that your business and your life is a combination of the trends and patterns can you today plus of course the changes you chose to make. Hopefully, your business or business plans will take into consideration what you read today. Hopefully, you’ll choose to continue many of the relationships, patterns and habits you’ve developed to this point.

I trust that you’ll choose some changes. I trust you’ll choose to up-grade some things, eliminate other things, and perhaps add a few new habits and beliefs. There may be skills you’ll want to learn, or habits you’ll decide to cancel.

The woman who talked to me after my speech was proud of the achievements. But she was embarrassed that luck, habit and momentum had played too large a role in her department. If you’ve allowed habit and momentum to run your life, I certainly hope you have that same kind of good luck, but don’t count on it! Take charge! Choose the life you truly want, develop a strategy to achieve it, and take action. This is your life. Make it a good one!

FNB Enablis Business Launchpad 2009

2009-06-09T13:25:00.000+01:00

The FNB and Enablis recently launched the 2009 version of it's business launchpad competition for new and growing businesses. The business plan competition which has been an annual event in South Africa since 2005 is a extremely welcome addition to the South African entrepreneurial landscape, supporting new and growing businesses and assisting those who want to bring their business ideas into reality.

"The Business LaunchPad competition aims to create an opportunity for anyone with a business idea or existing business, and who finds it difficult to secure conventional commercial funding, to be considered for access to start-up or expansion funding.

The competition process evaluates all the entries and scores them on the basis of their business viability and suitability for the funding criteria of the competition’s funding partners.

The process of entering the competition often assists the entrepreneur to clarify, refine and focus their business idea, which in itself is a valuable step." http://www.launchpad2009.biz/

The competition asks businesses or people with business ideas to submit a business plan, outlining its ideas and how these can be brought to market. With a range of attractive prizes on offer, this competition is not to be missed.

Best of luck with your entries,
Ben

SA Business Planning Seminar Series - How we promoted it

2009-06-06T14:34:00.001+01:00

If you want to replicate the success we are having with promoting the SA Business Planning Seminar Series Launch, here are a few greta tools. Weve had great success with the marketing of the event, and most of itis free. Thats the secret behind the low cost of the events itself. Obevious you know by now that we are using this blog as one of our main strategies, not only because of our many readers but also as its well indexed on Google. Search for Business Planning event on google and see how easy you find us.

In adition, The SA Business Planning Seminar Series Launch is broadcasted on the Open Press website this week. A great free PR tool for businesses promoting events or news the Open Press can be used by anyone with something newsworthy to say about their organisation.

This is a great free tool for small firms especially. We also used a number of other sites to get the word out such as Free Press Release as well as South Africa's premier PR website, Biz Community.

So the great thing here is that just because you may have a limited marketing budget because you want to maximize value vs price for your clients, it does not mean that you can not get the word out very fast and effectively.

Till next time,
Ben

Business Plan Workshop

2009-06-02T21:44:00.000+01:00

For those of you who are regular readers in South Africa , as well as those who may have stumbled accross the blog from annother site or search engine, come and join us for a business planning workshop in a city near you.

Here is a shortened version of the blurb:
Come and write your business plan with us. Our team of accountants and ex business bankers know exactly what you have to do to gain funding for your business. Having worked with hundreds of business owners to successfully draw up business plans that work, the people at this workshop will help you to walk away with a winning recipe and business plan that will work for you. You come away inspired and, most significantly, you leave carrying brand new insights to dramatically enhance your own success.

Hope to see you there,
Ben

Getting business finance from the bank

2009-05-15T21:37:00.000+01:00

A large number of start-up businesses call on their bank to borrow money. If you're reading this blog then you may be one of them or certainly may be planning to be. Banks offer long-term finance in the form of loans and mortgages, and short-term finance through authorised overdrafts. But before you approach your bank, you should first work out why you need the money and for how long.

For long-term purchases – new machinery or premises, for example – then a loan or commercial mortgage may be best. Leasing or hire is another option if it’s equipment you need.

Short-term day-to-day running costs (such as buying stock, or tiding you over until cash comes in from a customer) are often best met by authorised overdrafts or short-term loans. When looking at these options, obtain written quotations for each, so you can accurately compare total costs, including bank charges.

Loans
If you need the money for more than a year, for a specific purchase or planned expenditure, a loan is a good solution. You agree to pay back a set amount each month over a specified period.
For long-term borrowing they’re often cheaper than overdrafts – usually around 2.5 per centover base rate (an overdraft can go as high as Seventy per cent of small businesses call on their bank to borrow money.

Banks offer long-term finance in the form of loans and mortgages, and short-term finance through authorised overdrafts. But before you approach your bank, you should first work out why you need the money and for how long. For long-term purchases – new machinery or premises, for example – then a loan or commercial mortgage may be best.

Leasing
Leasing or hire is another option if it’s equipment you need Short-term day-to-day running costs (such as buying stock, or tiding you over until cash comes in from a customer) are often best met by authorised overdrafts or short-term loans.

When looking at these options, obtain written quotations for each, so you can accurately compare total costs, including bank charges.

Loans
If you need the money for more than a year, for a specific purchase or planned expenditure, a loan is a good solution. You agree to pay back a set amount each month over a specified period.
For long-term borrowing they’re often cheaper than overdrafts – usually around 2.5 per cent over base rate (an overdraft can go as high as

What you should be aware of:
The bank can call in an overdraft at any time
You may still have to provide security
If borrowing to fund a long-term purchase, an overdraft will probably cost more than a loan
If you exceed your overdraft limit, you could pay high interest rates and penalty charges and your cheques could be bounced
Overdrafts have to be regularly reviewed

Costs involved
Whether you choose a loan or an overdraft the amount you pay back depends on the interest rate charged, the amount you have borrowed, any fees or repayments. The interest rate will be fixed or variable. With a fixed rate, the interest remains constant throughout your repayment period. With a variable rate of interest, the interest fluctuates with changes to the Bank of England base rate.

Repayment schedules
It may take from one to 15 years to repay your laon. The longer the payback period the more interest you’ll end up paying. When comparing different loans and overdrafts, look at the annual percentage rate (APR). This is the rate it will cost annually once all charges are accounted for. Check the small print for hidden costs. For example, if you want to pay the loan off early, are there penalty charges? Do you need payment protection insurance?

What the bank looks for
The banks we speak to say that banks look at three key areas when deciding to say yes or no to a loan or overdraft request.
Most commonly, they will look at the business and the business plan. In adition, the person asking for finance, the impression they make and their record as a business or personal customer. Then the proposition: will the investment generate sufficient cashflow to repay? This becomes more crucial the bigger the deal is in relation to the size of business and the amount of experience the prospective borrower has.

These are some of the issues you need to take into concidderation when approaching the bank for finance, most of which we cover at our business planning workshops, held regularly accross the country. Visit our website for details or fill one of our contact forms in and we will be in touch.

Entrepreneurship in South Africa

2009-04-27T08:10:00.002+01:00

Entrepreneurship in South Africa is alive and well, with the country not only sporting an above average ratio of entrepreneurs vs. the rest of the population. From the shear number of requests for business plans and business funding coming through to us on a weekly basis it is evident that a large number of people with in the country are pro-active and want to turn their entrepreneurial spirit and passion into a business.

Looking at the IDC's website this morning, there is a great article on the status of entrepreneurship in South Africa. I've added it below for your interest or you can read it on the IDC website by clicking here.

Wishing you entrepreneurial success,

Ben

Development Goal of reducing poverty. While sound macroeconomic policies and providing market access are crucial, emerging markets need to

nurture and develop entrepreneurs able to take advantage of opportunities created by globalisation. At a national level, South Africa it is estimated to have approximately 2 million small businesses, representing 98% of the total number of firms in the country. Small enterprises employ about 55% of the country's labour force and contribute approximately 42% to the country's wage bill. However, a problem for the country and its entrepreneurs is 87% of these small enterprises are survivalist. Of these, the great majority are black owned, with 41% owned by women. 2006 study done on entrepreneurship

The South African government has long recognised the vital contribution that entrepreneurs can play in economic development and the social upliftment of its people. A pivotal part of the government's ten year vision of the Accelerated and Shared Growth Initiative of South Africa (ASGISA) is for South Africa to become an entrepreneurial nation that rewards and recognises those who see a business opportunity and pursue it, a South Africa

with a vibrant and competitive small enterprise sector with enterprises that grow in both turnover and employment. Those who were once excluded from full participation in the economy will have access to support and development services, and be fully integrated into the different sectors of the South African economy, with access to local, national, African and other international markets. This process will contribute significantly to helping South Africa to meet and sustain the material needs of all its people.

For many developing countries, private sector development has been a powerful engine of economic growth and wealth creation, and crucial for improving the quality, number and variety of employment opportunities for the poor.

Economically, entrepreneurship invigorates markets. The formation of new business leads to job creation and has a multiplying effect on the economy.

Socially, entrepreneurship empowers citizens, generates innovation and changes mindsets. These changes have the potential to successfully integrate developing countries into the global economy.

SA Entrepreneurs event in London

2009-04-04T19:52:00.000+02:00

For those of you following this blog in the UK, there will be a special entrepreneurs event for South Africans living in the UK on 9th of May 2009. With many South Africans choosing to move back to SA during this time of economic uncertainty in the UK, this may be an ideal opportunity to come and find out a bit more about business opportunities in South Africa, while meeting like minded would be business owners and entrepreneurs at the event.

This specially designed one day event organised by homecoming revolution will give people the opportunity to engage with successful entrepreneurs in South Africa who have spotted unique opportunities and grown successful businesses.

Speakers for the event include Professor Nick Binedell, Director of GIBS, Paul Harris, CEO of FirstRand Group and Kevin Vermaak, Founder of the Cape Epic Mountain Bike Race. The MC for the day will be Ithumeleng Kgaboesele, CEO of Sphere Holdings and President of Entrepreneurs Organisation.

SA Business Plans will be represented at the event by Ben Botes, one of the co-founders of the organisation offering advice and know how on business planning and funding for this of you thinking of starting a business in South Africa.

The event takes place on 9 May from 11h00 until 17h00 at Altitude in Westminster. Bookings can be made online at www.satickets.co.uk. For more information visit www.homecomingrevolution.co.za

SEDA small business support

2009-03-25T22:00:00.003+02:00

SEDA, the governments small business support arm is as committed as ever to supporting small business in South Africa. Not only have SEDA supported numerous entrepreneurs from disadvantaged backgrounds over the last few years they have also put their money where their mouths are when it comes to Business Planning support and funding for new ventures.

In a recent interview, Hlonela Lupuwana, acting CEO of the department of trade and industry’s Small Enterprise Development Agency, spoke to ANNE HUTCHISON about Seda’s commitment to the Business LaunchPad

SEDA is a key partner in the Business LaunchPad competition, as its national network of branches and enterprise information centres help to ensure that entrepreneurs get to know about the competition.

“Business planning, which is what the competition is about, is the core of Seda’s business,” says Hlonela Lupuwana, Seda’s acting CEO, commenting on the importance of its involvement in the FNB Enablis Business Plan Competition.

“At a more strategic level, Enablis brings public and private sector partners in the business of SMME development together to collaborate on this project, which is a good example of the kind of synergy we support,” she adds.

Seda began working with FNB in 2007 — to assist South African entrepreneurs gain the necessary skills to run a sustainable and competitive business — about the same time as the bank became involved with the Enablis LaunchPad. Since becoming an active partner, Seda’s role has extended beyond simply being a co-sponsor to being closely involved in distributing entry forms, assisting with the adjudication of entries and identifying how entrants can be assisted through other Seda programmes.

As a key driver of SMME development to reduce high levels of unemployment and poverty, Seda is mandated by the department of trade and industry to boost the sector through its Integrated Strategy on the Promotion of Entrepreneurship and Small Enterprises (ISPESE), aimed at identifying factors that contribute to the success of the small business sector.

Recognising the need for focused SMME support, the ISPESE provides a wide range of non-financial business development support services to entrepreneurs in the pre-start-up, start-up and growth phases, as well as to businesses in distress. Through its 43 branches countrywide, Seda’s services include business registrations and planning, co-operatives’ support, training and mentoring, and access to markets, finance and technology.

Lupuwana believes that the Business LaunchPad gives fresh impetus to the SMME cause.

“It identifies existing and aspiring entrepreneurs and encourages them to sharpen their business acumen, improve their business plan thinking and develop writing skills,” she states. “Showcasing the winning entrants as role models also encourages entrepreneurs.”

Lupuwana says she felt “incredibly inspired” when she attended the adjudication panels for the finalists. “These were people from all four corners of the country, whose business ideas and passion had been recognised, and you could sense that whether they won or not, they could continue with the added confidence of knowing their idea had been selected out of the thousands of entries.”

She says Seda aims to move informal enterprises or businesses in the seed stage to viable concerns that are registered and can grow by taking advantage of the available support services. “The ultimate goal is to transform ‘necessity’ entrepreneurs into ‘opportunity’ entrepreneurs, where entrepreneurial thinking is not just based on subsistence but on properly identifying and harnessing available business gaps.”

Seda offers a number of structured programmes. The Technology Programme, for example, uses the “incubator model” to fast-track the development of small businesses in a range of industries from platinum beneficiation to the manufacture of essential oils.

Businesses are provided with premises, manufacturing machinery, advice on marketing and general business management for an initial period, after which time they are expected to have acquired the necessary skills and market reach to go it alone.

“The aim is to give entrepreneurs time to get up and running in a protected environment by providing the necessary access to resources, intensive mentoring and support that will make their business viable in the shortest time possible,” says Lupuwana.

Seda’s Export Development Programme exposes SMMEs to the international business arena and global best practice through TradePoint, a global system which assists small enterprises to trade internationally and access information by using electronic commerce technologies.

Other key areas of assistance are Seda’s Franchise Support Programme and Co-operatives Programme. It also focuses on growth industries: for example, its Tourism and Cultural Industries Programme supports both direct and indirect tourism initiatives through networking and training.

Partnerships such as that with FNB and Enablis are crucial to achieving Seda’s goal of establishing a formal and sustainable small business network on a large scale, says Lupuwana.

Other local partners include business development support agencies and a range of development finance institutions, as well as dti-appointed finance entities such as Khula Enterprise Finance, the National Empowerment Fund (NEF), the South African Micro-finance Apex Finance Fund (SAMAF) and sector-specific finance bodies.

“We also benefit from the experience of global partners who provide technical and, to a limited extent, financial support.”

A major partnership is with Finland, following the signing of an agreement to support Seda with core funding of around R45-million and technical assistance of about R7-million over four years. Another is the Tri-Nations partnership between representative groups of Seda, the Brazilian Micro and Small Business Support Service (SEBRAE) and India’s National Small Industries Corporation Limited (NSIC).

An annual Tri-Nations Summit on Small Business is part of the initiative between India, Brazil and South Africa to promote co-operation and exchange.

“Small business success is the cornerstone of economic growth in South Africa, and Seda initiatives and partnerships are pivotal,” says Lupuwana, emphasising that collaboration is a key component of the ISPESE strategy.

We acknowledge The Times newspater for their contribution to the article

Better Business Climate Not Far Off

2009-03-25T21:46:00.003+02:00

A better climate for business is not far of according to Jean Temkin, author of More Charting for Profit and business writer for the Business Day news paper. With the current economic slowdown evident when ever you open your favourite newspaper or news bulletin, its great to hear some optimism from the Business Day journalist. With the recent rate cuts and further cuts being predicted in April, life for small business owners is about to get easier albeit slowly but surely.

The article by Temkin added for your convenience below:

BUSINESSES that are hanging on by their toes as they contemplate shutting up shop ask how long our economic plight will last. If it is a matter of months, their toes may be able to take the strain, but if it is longer they may as well cut their losses now.

Bearing in mind that the current crisis is the worst for many decades, I’ve dug into history books, read what the pundits are saying and analysed many charts. My conclusion is that the end is far too indistinct to even guess at. But barring further financial upheavals and providing kismet rewards our belt-tightening efforts, it’s possible we may already have seen the worst. As for toe-holding businesses, if possible they should hang on a little longer.

It is only my shorter term charts that look more positive than of late. Longer term charts are indecisive. The JSE overall index has put on 16% since its November low which has already led to some pundits speculating that we have seen the market’s bottom. Finance Minister Trevor Manuel has confirmed that, unlike the banks of our trading partners, South African banks are sound. This being so, we perhaps have a better chance of an earlier recovery.

I have chosen a 20-year chart to show that while the Dow does have some influence on the Overall, they are not necessarily joined at the hip. The Overall is looking reasonably positive while the Dow does not.

Going back as far as my data allows, I have added to the percentage fall to each significant downward correction. Using figures that represent working days, the first figure shows how long it took to reach the bottom of a dip, and the second figure how may days it took to regain its previous high. As it is an arithmetic chart, earlier corrections appear less significant than later corrections but in percentage terms are often more significant. We are now 263 days into the current dip and the loss from the May high to the market bottom on November 20 was 196 days.

The Dow’s crash began eight months before the start of the Overall’s crash. From October 2007, the Dow’s most recent high, until November 2008 the Dow lost 46%. The Overall’s most recent high was on May 23 last year and by November it had lost 43%. Both did an up-flip in November. The Overall rose, retreated slightly and then rose again. The Dow rose, fell back and continued falling. Since the up-flip the Dow has lost 6% against our 16% rise.

While the monthly 20-year chart shows the Dow Jones still heading down, its daily charts show it trawling along the bottom and still in oversold territory on its overbought/oversold chart. The Dow’s moving average convergence divergence (MACD) plotting is nudging down through its moving average. The monthly chart shows the Overall nudging better, and its daily charts show it at the zero level on its overbought/oversold chart and nudging upwards through its MACD.

Paging back 78-years to the 1929 Wall Street crash, I see that the Dow lost 90% in total, reaching its low two years and three months later, in July 1932. Eight months after that, on March 15 1933, the Dow experienced its largest percentage gain in one day with a leap of 15,34%. The world was still deep in the Great Depression but the Dow was signaling that the worst was over. It continued upwards but working with inflation adjusted figures the 1929 high was not surpassed until 1954.

•Temkin is the author of More Charting for Profit, a textbook on technical analysis.

Marketing Ideas for South African Business

2009-03-15T21:33:00.005+02:00

Effective marketing ideas for new business is such a crucial part of achieving success with your start-up and I'm continuously surprised at how little energy and focus is spend on this issue. Irrelevant of how innovative your service or product is, if your potential clients do not know that it exists, your business will struggle to get of the ground. Having spoken to just to many entrepreneurs who see this as the last thing they think about I find the tragic statistic on business failure rates not surprising at all.

Lets think of the reality of this. Do a search for your product or service on Google or your favorite search engine or have a browse through your local yellow pages if you're still of the rare bread that dint like the Internet much and you will soon find out that more often than not, your product offering is not unique. And if it so happens that your service or product is unique, then even more so the reason why you should be pro-active in marketing, promoting and selling your service or product.

For entrepreneurs starting a new service, the author C J Hayden is one of my favorite writers when it comes to ideas for marketing your service. In her article below she looks at a few innovative ideas for you to explore:

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Boost Your Marketing with the Buddy System –C J Hayden
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Remember back in grade school when the teacher asked you to
hold hands with a friend on field trips? The idea behind the
buddy system is that it's much harder to get lost if there
are two of you traveling together. When you get into
trouble, your buddy can help you out, or find someone else
who can.

Maybe you could use a buddy in your marketing. The constant
challenges you encounter while promoting yourself and your
services make sales and marketing a difficult road to travel
all alone, and it's easy to get lost. Working with a
marketing buddy can give you:

o Perspective - A different point of view on your progress
or challenges. Just hearing your problem restated by another
person can give you new insight that will help you find a
solution.

o New Ideas - A partner for brainstorming and an extra pair
of eyes and ears to spot opportunities. You can double the
amount of knowledge and experience at your fingertips.

o Accountability - Someone other than yourself to whom you
are accountable -- who will ask you once a week what you
have done so far, and what's next.

o Support - Space to complain or celebrate out loud, with
someone who cares about your progress. If you're facing a
roadblock, grousing about it for a few minutes may be all
you need to get back into action. And having someone to
share your success with can make it much sweeter.

While you could use your spouse, best friend, or business
partner to provide this extra help, the individuals closest
to you may not be the best choice. The people in your
personal life will not always be thrilled with how much time
you spend on marketing, and your business associates may
tend to sidetrack you with day-to-day management issues. You
may find it more helpful to find a buddy with more
detachment, who understands the importance you place on
marketing.

You and your buddy can assist each other in reaching your
goals by setting up a regular check- in, where each of you
reports on progress, announces successes, and states
challenges. The buddy's job is to listen, celebrate,
commiserate, and be a brainstorming partner. Here's how to
make the buddy system work for you in marketing:

1. Set a fixed time to talk. Whether you meet by phone or in
person, set a start and end time for your conversation. Half
an hour is enough; an hour is plenty.

2. Check in about goals and action steps. Make a brief
report about where you are with your current goals and what
steps you have taken since your last meeting. Keep your
check-in brief and to the point, e.g. "I got one new client
this week, and set up three appointments to give
presentations. I interviewed a designer about doing my new
brochure, and reserved a domain name for my web site."
Acknowledge your buddy's progress and celebrate his or her
success.

3. Help each other solve problems. Ask your buddy to first
just listen while you tell him or her what's going on and
clear your emotional reaction to it. Your buddy can say
things like, "Gee, that's tough," or "How awful!" but should
not offer any advice until you are through. Talk about not
only what is happening, but how it makes you feel. If it
sounds like complaining, that probably means you're doing it
right.

You might say something like this: "I've been trying for two
weeks to draft my brochure, and there's just been one
emergency after another, and now my mother wants me to help
sell her car, and I'm so frustrated! All the words I write
down just come out wrong, and I don't think it'll ever come
together, and I needed it yesterday, and I'm so worried
that..." You get the idea.

Set a time limit of 5 minutes for reporting and clearing. At
the end of that time, ask your buddy to summarize for you:
"I hear how frustrated and worried you are. You seem to have
two problems that need to be solved -- finding the time to
work on the brochure, and getting the words to come out
right. Are you ready to look at some solutions?"

4. Brainstorm possible solutions. Your buddy's job is not
necessarily to hand you the right answer -- his or her more
important role is to help you expand your thinking to come
up with some new ideas. Take your problems one at time, and
together with your buddy, make a list of possible solutions.
Don't edit the list as you are brainstorming; include
anything and everything that comes up. You are not allowed
to say, "That won't work," or "I already tried that."

Here are the potential results of a brainstorm on getting
the right words for a brochure:
o hire a copywriter
o plagiarize my competitors' literature
o use the thesaurus
o ask my cousin the writer to help
o do a brochure with only pictures
o don't use a brochure at all
o look at the Yellow Pages
o take a class in marketing communications
o use what I have and stop worrying
o have some colleagues review it

5. Decide on your next steps. If none of the brainstormed
ideas seem right, look at each one to see if there's
something useful in it. Maybe you can't afford a copywriter,
but you know one you could ask for free advice. Perhaps a
class would take too long, but you could check out a
textbook from the library. Find just one thing you can do
that will get you moving toward a solution.

Regardless of any problems you try to solve during your
session, always end by naming what steps you will take
toward achieving your goals before your next meeting. Write
these steps down -- both yours and your buddy's -- so you
can check in about them next time.

6. Keep the relationship reciprocal. Make sure each of you
gets an equal amount of time at your meetings. If you end up
spending the whole session on one person's problem, devote
the next session to the other buddy. Keep your buddy in mind
as you make new discoveries and meet new people, and share
any opportunities you uncover. The buddy system works best
when you do for your buddy what you would like your buddy to
do for you.

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Thanks for reading my Blog and ... happy marketing,

Ben