Business

Why business plans matter

Published

6 years ago

March 8, 2019

Entrepreneurs are always generating business ideas. However before putting the idea into practice it’s very important that one draws up a business plan to test if this idea will be viable.

It’s not foolproof though that coming up with a business plan will ensure success of the idea but the process of preparing a business plan will be able to highlight those issues that you need to attend to before you start your venture.
You will be able to deal with the risks and challenges that you could have easily missed out had you not gone into the business planning process.

Coming up with a business idea is very crucial in business. It is commonly said that if you don’t know where you are going you will end up somewhere else. Research that has been carried out on some entrepreneurs in the US indicates that writing a business plan is absolutely worthwhile.

People have a lot of stuff, a lot of ideas in their heads that need to be put on paper and then it becomes compulsive for someone to want to ensure that these ideas become reality. You feel compelled to want to do what you have planned.
Preparing a business plan requires a lot of thinking. The importance of a comprehensive, thoughtful business plan can therefore not be over-emphasized.

Before you write a business plan you need to do a lot of research, such as researching on products and markets and then preparing financial projections. Such research helps you to refine your ideas about what you intend embarking upon.

From the research you get to know whether customers really appreciate the solution you are providing for a problem they have. You also are forced to critically look at your opportunity, and to decide on a possible team that will execute that plan.
All this thought process will then convince you if it will be possible to get into business.

There seems to be no disagreement on the importance of business plans when it comes to securing funding.
Those who are in support of having business plans before embarking on a business and the skeptics do agree on the importance of business plans when it comes to securing funding. If you have to get money from venture capitalists, commercial banks, government-backed lenders or other investors, you will need a business plan.

Investors will be prepared to release funds on a bankable project. An idea that is supported by a written down plan on how you will carry out the project and what you expect to get in terms of profits.

Investors are not really impressed by wads of spreadsheets but the action behind the spreadsheets. Investors want to see that an entrepreneur has actually examined the market for a product or service, whether he has identified potential customers, or assembled a capable team, what business model has he devised.

A business plan helps you to evaluate the feasibility of your proposal. Once you have drawn up a business plan you can carry out “what if analysis” by creating three sets of financial forecasts: a rosy picture, a more reasonable one and a disaster or worst case scenario.
You need to establish what will happen to your business in the event of certain unforeseen events happening. You should do this sensitivity analysis before you pump cash into the business. You need to at least plan for the worst case scenario.

Having a business plan does not necessarily mean that you will succeed in your business. It needs action on your part. Tim Fargo underscored the importance of action when he said that “Good intentions might sound nice but it’s positive actions that matter.”
The process of preparing a business plan is very effective as it helps the planner to identify and quantify the risks and opportunities the company is likely to face. The tendency in business plans is to overstate profits.

But if you assess the possible risks, then you will be able to adjust your projections accordingly and remove any overestimations.
Planning is bringing the future into the present.

Richard Cushing captures this well when he said “Always plan ahead. It wasn’t raining when Noah built the ark.”
The plan itself is not so important but what’s important is the process of planning because you are bound to interrogate a lot of issues in the process.

Businesses draw up plans for a variety of reasons. Some business plans are prepared to source funding, and other to attract partners into a business, or to recruit certain critical skills or for the government to approve a project.

The format of your business plan will depend on your industry, who is reading your plan and what the plan is intended for. Since a business plan serves many purposes, it’s advisable to have several versions of the plan that are tailored for specific audiences: you need to understand who you are writing the plan for and tailor it to meet the needs of your audience.

A business plan should reflect your ideas about your business and its future, and the projections. Your projections should be realistic and be supported by statistics and facts, if possible, from a knowledgeable source to give your plan some credibility.
How you present your plan is very critical. A normal business plan should be about 20 pages or so. Of course the length depends on a variety of factors: the purpose of the plan, the type of industry, whether your business is introducing a new product.

In preparing the plan, you need to start with an executive summary which explains the fundamentals of your business. An executive summary provides the description of your business model, the legal form of the business, when the company was formed, its principals and key personnel and its financial requirements.

The second section will provide the detailed plan. In the detailed plan, you start with the business description which typically gives a brief description of the industry and its outlook, the product/service you are providing, the business operation’s structure (whether it is a wholesale, retail or service-oriented), who your customers are, how you will distribute your products/services to these customers, what will give you the competitive edge against your competition.

The second area you cover is marketing. The marketing strategy is one of your plan’s most critical elements. In this section, you need to define your target market and how you plan to reach it.

You will comment on the results of market analysis you would have done in your market research. You should analyze your market in terms of size, structure, growth prospects, trends and sales/growth potential.

Also include how you will distribute the product, indicate what your promotion strategy and tactics will be.
In the third section you cover your competitive analysis. The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within your market, strategies that will provide you with a distinct advantage, the barriers that can be developed in order to prevent competition from entering your market, and any weaknesses that can be exploited within the product development cycle.

You need to show why your business will be a success over others.
The fourth section will cover your operations and management. This section describes how the business will function on a daily basis, its location, equipment, people, processes and surrounding environment.

It will also look at how you will manufacture your product, the production facility, the personnel you will engage, requirements for any permits or special regulations or licenses, who the key suppliers are.

You also need to highlight how you will manage the organization, what will be the various responsibilities of the management team.
Lastly you need to show your financial projections. Financial data is always at the back of a business plan. The financial data usually includes startup expenses and capital, your projected cash flow statement, projected income statement and balance sheet.

You might also need to show when your business will break even, i.e. start making profits. The above format can be tailored to the purpose of the business plan.

Stewart Jakarasi is a business and financial strategist and a lecturer in business strategy, advanced performance management and entrepreneurship. He is the Managing Consultant of Shekina Consulting (Pty) Ltd and provides advisory and guidance on leadership, strategy and execution, corporate governance, preparation of business plans, tender documents and on how to build and sustain high-performing

organisations.
For assistance in implementing some of the concepts discussed in these articles please contact him on the following contacts: sjakarasi@gmail.com, call on +266 58881062 or WhatsApp +266 62110062 .

Business

Take a Break from Summer

Published

4 weeks ago

December 18, 2024

The Post

Press release for KFC Lesotho

Date: Monday, 16 December 2024

Summer, what a wonderful time of year…

When influencing gets too much

When the news cycle gets too much

When the endless queues get too much

When the shopping chaos gets too much

When the unavailable transport gets too much

When the holiday work shifts get too much

When the lawn mowing gets too much

When the loud music gets too much

When the traffic gets too much

When the relentless schedule gets too much

When the heatwaves get too much

When the weather warnings get too much

When the suntan lines get too much

When the ever-growing laundry pile gets too much

When the festivities get too much

When the 2025 university applications get too much

When the guests overstaying their welcome gets too much

When the social media mayhem gets too much

When the out of sync traffic lights get too much

When the New Year resolutions get too much

When the travel expenses get too much

When reapplying sunscreen gets too much

When the packing and unpacking gets too much

When the photo-taking gets too much

When the flies get too much

When the pool maintenance gets too much

When the fully booked airlines get too much

When the mosquito bites get too much

When the fishing trips get too much

When the baking gets too much

When the road trip stops get too much

When the sand in the car gets too much

When the picnic ants get too much

When the papa and morogo get too much

When the braai smoke gets too much

When the television shows get too much

When the homemade cooking gets too much

When the hot car seats get too much

When the outdoor markets get too much

When the air-conditioning bills get too much

When the nature hikes get too much

When the garden-watering gets too much

When the hot sidewalks get too much

When the bike rides get too much

When the late nights get too much

When the impromptu trips get too much

When the 4×4 rides get too much

When the golf games get too much

When the ice cube trays get too much

When the late-night crickets get too much

When the entertaining gets too much

When the bumpy boat rides get too much

When the paddleboarding gets too much

When the public pool crowds get too much

When the lack of parking gets too much

When the summer internships get too much

When all you need is a breather

You have made it to the end. Take a break from summer with KFC Lesotho on Saturday, 21 December, a day to pause, refresh, and savour the start of holiday mode. Swing by KFC for a taste of summer and officially step into the holidays, recharged and ready. See you there!

Discover KFC’s Summer Delights!

KFC Summer Twisters: https://www.youtube.com/watch?v=LVlAX00WROU

KFC Summer Krushers: https://www.youtube.com/watch?v=QpCn-tFYrls

KFC Summer Buckets: https://www.youtube.com/watch?v=SbiOjRR58UA

End.

About KFC Africa

KFC has been in South Africa for over 53 years and has more than 1,300 stores across the country. The first KFC restaurant in South Africa opened in 1971 in Orange Grove, Johannesburg. KFC is the leading quick-service restaurant brand in South Africa with just under a third of market share, according to Brand Image Tracker. KFC serves more than 20 million customers a month and we work hard to ensure that no matter which of our restaurants they walk into, they will get that distinctive KFC flavour and have a great experience. KFC’s Original Recipe® Chicken was first made by Colonel Harland Sanders in 1940 when he perfected his secret recipe of 11 herbs and spices at his restaurant in Kentucky. Today, KFC is the world’s most popular chicken restaurant, still preparing our chicken with the Colonel’s secret recipe to his exact standards. Every KFC restaurant follows the same global processes and procedures to ensure that our customers get great-tasting food, every time.

KFC Lesotho socials:

Instagram – @kfclesotho – https://www.instagram.com/kfclesotho/

Facebook – KFC Lesotho – https://www.facebook.com/LesothoKFC

X – @KFC_Lesotho – https://x.com/KFC_Lesotho

Business

Demystifying death benefit nomination

Published

4 weeks ago

December 16, 2024

The Post

I recently attended a trustee training session, and it sparked a thousand of opinions and emotions to fellow trustees and principal officers.

It is remarkable how people approach their pension funds with a blend of care and chaos — carefully watching contributions grow but leaving the aftermath of their departure to luck and a roomful of trustees.

With the Pension Fund Act (PFA) 2024 in place, requiring members to fill out and update death benefit nomination forms annually, one would think the process is foolproof.

Yet, we find ourselves navigating the maze of member reluctance and the emotional minefield that comes with deciding who gets what.

The PFA 2024 makes an elegant appeal to order, asking pension fund members to take charge of their legacy by nominating beneficiaries.

But, instead of pens gliding over forms, there is hesitation, resistance, and in some cases, outright abstinence.

What should be a simple administrative act seems to invoke existential dread or, worse, familial politics.

When Nomination Feels Like Negotiation

One of the most notable trends is the discomfort married members feel at the mere suggestion of allocating 50% of their death benefit to a spouse.

For clarity, the PFA does not say they must — but logic and love might.

However, these conversations often spiral into arguments over “what ifs.”

What if the marriage does not last?

What if the spouse uses the money “irresponsibly”?

What if leaving an equal share to children or a secret favourite nephew makes more sense?

These “what ifs” often lead to another troubling “what if”: what if no nomination is made at all?

Emotions run high.

Sometimes, the process of completing the form turns into a reflection of unresolved family tensions, where the form itself becomes a battlefield for hypothetical posthumous power plays.

Trustees, meanwhile, are left to pick up the pieces, making discretionary decisions that almost always leave someone unhappy.

What the Law Actually Says

Let us address the elephant in the room.

The PFA does not dictate that anyone’s spouse, child, or distant cousin must receive a cent.

The law requires you to nominate beneficiaries but leaves the who and how much entirely up to you.

And yet, myths persist, leaving members to believe they are bound to make obligatory allocations.

This misunderstanding is not just inconvenient; it is entirely unnecessary.

The beauty of the PFA lies in its simplicity: nominate someone — anyone — so your trustees don’t have to piece together your
wishes based on tea leaves, distant

relatives, or that one time you mentioned something in passing to a colleague.

The Real Cost of Silence

If leaving decisions to trustees sounds romantic — think noble strangers making wise decisions — let me assure you, it’s not.

Trustees do their best with the tools they have, but without a completed nomination form, their decisions are guided by discretion rather than your explicit intentions.

And discretion, noble as it sounds, often breeds disputes.

Disgruntled beneficiaries are not just an unfortunate byproduct of silence; they are its loudest consequence.

Without clear instructions, your death benefits might fund lawsuits instead of legacies.

Is that truly the financial wisdom you have cultivated over a lifetime of disciplined contributions?

Completing the Form: The Act of Taking Control

Filling out the nomination form isn’t just compliance; it is an act of empowerment.

It’s the financial equivalent of saying, “I trust myself to make the best decisions for my loved ones.”

It’s an opportunity to assert control over your life’s earnings and ensure they benefit those you deem most deserving.

Let us put it plainly: by completing this form, you eliminate guesswork, prevent disputes, and protect your loved ones from unnecessary turmoil.

You also spare trustees from playing Solomon with your assets — a responsibility they never asked for but inherit when you opt for avoidance.

It is not that deep!

For all the effort we pour into overthinking, let’s consider the alternative — actually completing the form.

You’ve already made harder decisions, like choosing between investment portfolios or deciding on your retirement age.

Writing down a name or two, alongside their allocations, is, comparatively, a walk in the park.

And for those of you abstaining because “it’s complicated,” let us reflect: is it more complicated than the potential legal battles, heartache, and chaos that might follow your departure?

Or are we simply procrastinating because planning for death feels uncomfortably final?

Your Legacy, Your Way

At the heart of it all, filling out the nomination form isn’t about complying with a law or appeasing trustees.

It is about ensuring your legacy aligns with your wishes.

It is about giving your loved ones clarity and peace of mind when they need it most.

So, grab that pen.

Fill in that form.

It might not be the most exciting thing you do today, but it could very well be the most meaningful.

After all, if you’ve spent years building a financial future, why let your final act of planning be defined by inaction?

Teboho Makoetlane

Business

More US funding for development projects

Published

1 month ago

December 2, 2024

The Post

MASERU-THOMAS Hines, the US Embassy’s interim head, has applauded Lesotho for passing the Millennium Challenge Corporation (MCC)’s scorecard, paving way for continued development funding.

The MCC is providing assistance to Lesotho to strengthen good governance, economic freedom and investments in the country, managed by the Millennium Challenge Account (MCA-Lesotho Compact II).

The MCC donated US$300 million (approximately M5.4 billion) for health and horticulture development.

For the country to qualify, it had to pass the MCC’s scorecards.

Hines told Prime Minister Sam Matekane on Tuesday at the State House that the good news is that Lesotho passed, although there are some other things the country has to improve.

For this year, the passing indicators are girls’ primary education completion rate, natural resource protection, land rights and access and fiscal policy.

Indicators that slipped below the pass rate are government effectiveness and freedom of information.

“Of MCC’s 76 scorecards, only 26 countries passed while 50 did not and the good news is that Lesotho once again passed the scorecard,” Hines said.

He said not only did Lesotho pass but it has also improved from passing 15 indicators last year to 17 of 20 indicators this year.

Hines said the accomplishment reflects Matekane and his government’s commitment to strengthening democratic governance and fostering prosperity.

“Noting the decline in control of corruption indicator, we seek avenues to do more together with Lesotho to combat corruption,” he said.

“Not only does regression in this area put Lesotho at risk of failing the scorecard we also know the corrosive impact of corruption on the economy and society.”

He said they seek to maximise the compact’s ability to ensure greater access to quality healthcare.

Matekane said the scorecards assess the government’s performance in key areas throughout the year to determine the continuing eligibility regarding MCC compact funding.

He said last year he urged the cabinet to build on the momentum from 15 out of 20 indicators.

“Let me take this opportunity to celebrate our sustained achievement of passing 17 out of 20 indicators which is a 10 percent increase from last year,” Matekane said.

“Specifically, I committed last year to ensure that Lesotho will submit data to support the assessment of girl’s primary education completion rate,” he said.

He said he was pleased with the progress overall and on gender parity in education and they aim to achieve better results next year.

In addition to this, he said, there is still a lot of work to be done, especially around trade policy, government effectiveness and particularly the freedom of information with a notable decline from 83 percent down to 43 percent.

“Our commitment to control and eliminate corruption remains steadfast. We are working tirelessly to expose corrupt activities, keeping the public sector honest and accountable,” he said.

“The commitment we have made of investing in our people has never wavered over the years and the government is also focused on improving access to quality health services to every Mosotho regardless of their background and location,” he said.

Moipone Makhoalinyane