Connect with us

Business

Why business plans matter

Published

on

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 .

Continue Reading
Advertisement

Business

Short courses for ex-mineworkers

Published

on

THE Lesotho Diamond Academy has introduced mining short courses, particularly to ex-mineworkers, to help them re-enter the mining sector.
The Essential Introductory Courses, which will run for two weeks, will start from June this year. The courses are meant particularly for people who worked in mines in South Africa.

The Academy’s CEO, Relebohile Molefe, unveiled the new courses during the graduation of 18 students last week, four of whom are now armed with Cutting and Polishing certificates while 14 graduated with Rough Diamond Evaluation certificates.

The new courses include the Essential Certificate in Diamond Grading and the Essential Certificate in Diamond Evaluation.

“The decision to offer these courses aligns with the Academy’s dedication to bridge the gap and ensure that individuals with valuable experience can seamlessly reintegrate into the diamond and jewelry industry,” Molefe said.

“By providing short courses, the academy does not only impart essential skills but also contributes to the sector’s growth by reactivating experienced individuals who had lost access to the industry due to no formal documents showing their experience in the industry,’’ she said.

During the graduation celebration, Molefe also unveiled a new sponsorship programme for various courses.

One outstanding student previously sponsored, who demonstrated exceptional proficiency in Rough Diamond Evaluation, was granted a fully funded bursary to further his studies into Advanced Certificate in Round Diamond Brilliantering.

In pursuit of its multifaceted objectives, one of which is to serve as a catalyst for employers in the diamond and jewelry sector to devise skills development strategies, the Academy is set to sponsor four additional students in the upcoming intake starting from February 15.

Two of these bursaries will afford a 30 percent discount on overall fees for two students progressing from Cutting and Polishing to advanced studies in Rough Diamond Evaluation.

Two will be fully funded bursaries to study for a Certificate in Diamond Cutting and Polishing.

Additionally, the institution will extend two fully funded bursaries to the public, fostering inclusivity and expanding opportunities.

The Academy says it plans to announce the search for two deserving Basotho individuals on its social media pages and website.

“Importantly, the bursary programme bears no age restrictions, reflecting a commitment to fairness and inclusiveness, ensuring that opportunities are accessible to all, irrespective of age,” it says in a statement.

The Academy says it seeks “to be a dynamic force in shaping the industry, not just within national borders, but also on regional and international platforms”.

“The emphasis on competitiveness within these markets underscores the institution’s commitment to producing graduates who are not only proficient but also globally competitive,” the statement reads.

“The recent graduation ceremony symbolises a milestone in the Academy’s journey. The success of its students is a testament to the quality of education and the foresight embedded in the curriculum.”

The Academy says its decision to sponsor further education for outstanding performers reflects a belief in nurturing talent and contributing to the continuous improvement of the diamond industry.

The Lesotho Diamond Academy was founded by the late Mpalipali Molefe, a prominent educator, diamond trader and an MP, who recognised the imperative to elevate professionalism in the diamond industry.

Staff Reporter

Continue Reading

Business

Bank hands over uniforms to students

Published

on

THE Lesotho Post Bank donated uniforms to students at Leqele High School worth a staggering M60 000 as part of its Back-To-School campaign.
The bank said it did this “to keep needy children in school and to promote their education”.

A teacher at the school, Tšepo Semethe, said the uniforms will likely motivate the students to work harder in their studies.

Semethe insisted on giving the bank the names of the students so that it could check their performance at the end of the year.

“At Leqele High School, we work very hard because what we want is excellence above all. To us, hard work pays,” he said.

The bank’s Chief Risk Officer, Molefi Khama, said they are getting old, they will soon retire and Lesotho Post Bank will be in the hands of these children.

He pleaded with the students to work harder.

“This is why we decided to come here to support the students in their education so that when coming to school, they should be confident,” Khama said.

“We are watching you and waiting on you,” he said.

The school’s head prefect, Tholoana Monatsi, said from now on, “no student will be identified by what they wear”.

“(Lesotho) Post Bank made us one and we thank them for that because what we wear cannot stand before our education. We indeed thank you and forever you will hold special places in our hearts,” she said.

A parent, ’Marorisang Latela, said they were very grateful for the gift from Lesotho Post Bank adding that they must also donate to other schools.

Minister of Trade, Mokethi Shelile, promised to go back to the school to discuss how the children could learn in comfortable surroundings.

Relebohile Tšepe

 

Continue Reading

Business

Mamello School of Special Needs wins prize

Published

on

MAMELLO School of Special Needs is the first-place winner of Standard Lesotho Bank’s Scaled-Up Pitching Den held at Maseru Avani on Tuesday.
The school has secured a grand prize for an all-expenses-paid trip to Kenya to participate as a finalist representing Lesotho at the Standard Bank Africa Awards.

The school, pioneered in 2020 during the early days of the Covid-19 pandemic through Zoom classes, deals with children who live with conditions such as autism, attachment disorders, Attention Deficit Hyperactivity Disorder (ADHD) dyslexia, Down syndrome and slow learners.


STKTM Solutions claimed the second-place spot, receiving a commendable M10 000, while Masia Farms secured third place and a M5 000 prize.


Pheello Masia of Masia Farms, thanked Standard Lesotho Bank for backing their vision and that of other Basotho entrepreneurs.


He acknowledged that the bank’s faith in their endeavours serves as a source of inspiration, propelling them to work harder and foster growth within the community.


The event, aimed at fortifying support and fostering regional integration for Basotho entrepreneurs across the African continent, showcased the bank’s commitment to driving the growth of Lesotho.


Malatola Phothane, Head of Enterprise Banking at Standard Lesotho Bank, set the tone in his welcoming remarks.


“As Standard Lesotho Bank, through business and commercial banking, we strive to turn possibilities into opportunities,” Phothane said.


“Lesotho is our home, and we drive her growth,” he said.


His words resonated with the bank’s dedication to nurturing local talent and fostering economic development.


Phothane acknowledged the eight finalists, commending them for their resilience and passion for their businesses.


He emphasised how each entrepreneur had stood their ground, displaying knowledge and unwavering commitment.


The recognition not only highlighted the achievements of the finalists but also underscored the bank’s role in recognising and uplifting the entrepreneurial spirit within the community.


Aliciah Motšoane, founder of Prestige Furnitures and Sentebale Gap Funeral Services, played a significant role at the event as a motivational speaker, sharing her entrepreneurial journey filled with challenges and triumphs.


She recounted her humble beginnings when she was selling bread in high school, leading to the establishment of Prestige Furnitures in 1998.


Despite facing a significant setback after her shop was burnt down during the riots and incurring a loss of M5 million, Motšoane never gave up.


She said business is always a demanding endeavour adding that it needs hard work and a unique mindset.


She urged entrepreneurs to embrace their roots, seek inspiration, and persevere through challenges.


The keynote speaker, the bank’s Head of Business and Commercial Clients, Keketso Makara, said the bank is committed to foster a thriving business environment, highlighting the pivotal role of youth collaboration across diverse economic sectors.


Makara said their mandate aims to empower youths in steering the private sector towards growth, contributing to economic diversification.


Makara urged the eight finalists to actively involve bankers in refining their proposals for maximum impact on economic stimulation and sustainable development.


The bank said the Scaled-Up Pitching Den not only served as a stage for entrepreneurs to present their ventures but also acted as a driving force for networking, collaboration, and collective empowerment.

Staff Reporter

 

Continue Reading
Advertisement

ADVERTISEMENT

Advertisement
Advertisement

Trending