Wikipedia defines a business plan as: "a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organisation or team attempting to reach those goals."
The Business Plan is a vehicle that investors and funders use to get a 'snapshot' of a business opportunity, taken from a number of different angles. But, it can also be used internally within a company to communicate direction and goals and ensure that they are aligned with financial commitments. It is used both for start-ups as well as operating companies (often associated with their budget cycle).
It is a 'living' document that needs to be updated as circumstances change within the business' environment and often looks at a view of between three and five years ahead.
RC&I run courses on writing business plans, both to support entrepreneurial activity and potential business startups, but also for students and academics seeking funding for late stage research and innovation, as preliminary business plans are often required as part of the proposal. Have a look at the Seminars page for when the next course is scheduled.
The RC&I Pre-Seed Fund assists UCT staff with the development of components of a Business Plan, such as market research, production of market samples as well as assistance with actual Business Plan development. Visit the Pre-Seed Fund here.
See how to access free Frost & Sullivan Market Research Reports for key information to include in your business plans here.
The IDC Venture Capital Fund provide an excellent summary of the key requirements for a Business Plan in their brochure and with kind permission of Dr Paul Johl they are:
- Information on applicant (contact details);
- Executive summary;
- The company (history; mission statement; strategic objectives; shareholding structure; directors; current business activities; key strategic partnerships/alliances);
- Product description of products on offer; status of development; key milestones achieved and still to be achieved; cost breakdown; technology employed; intellectual property; patents; royalties; competitive advantages; SWOT analysis);
- Technical information (description of process; details of plant, equipment and building requirements; details of actual and projected operating costs and capital expenditure; information on raw materials and suppliers);
- Present employment and the number of new employment opportunities to be created;
- Market analysis (market trends; industry analysis; customer profiles; market research results; competitor analysis; substitute products; three year sales forecast - units and value; market share; entry barriers; potential market segments - size and growth);
- Marketing plan (overall marketing strategy; pricing; advertising and promotion; sales tactics; distribution);
- Management team (organisational chart with responsibilities; CVs of key people);
- Critical risks (highlight key risks areas and describe plans to minimise their impact);
- Funding (details of funding required and application thereof; capital invested to date; owner's contribution);
- Financial plan (valuation; key assumptions three years' historical (audited in the case of an existing company) and projected income statement, balance sheet and cash flow statement; break-even analysis; business ratios);
- Material contracts and/or agreements, and
- Ownership (before and after funding).
There are also Business Plan templates and information on what the key components should contain that can be downloaded from the National Innovation Competition downloads page here or from the top right column on this page.
The book "Starting your own Business in South Africa" is also a useful resource to use when writing a Business Plan. It is reviewed on our Resources page here.