By Uminathi Business Start-Up ServicesPublished Updated 3 min read
Quick answer
A business plan explains what your business does, who its customers are, how it will make money and how much money it needs. For South African funders it should include an executive summary, business description, market and competitor analysis, marketing plan, operations, management team, compliance status and three to five years of financial projections with clear assumptions. Keep it specific, realistic and backed by evidence.
Read the complete guide below.
At a glance
Who reads it
Banks, development funders, investors, partners and you
Typical length
15 to 30 pages plus financial projections
Most important part
The financial projections and the assumptions behind them
Update
At least once a year, or before any funding application
What is a business plan for?
A business plan is how you test your idea on paper and how you convince someone else to back it. Funders such as banks, development finance institutions and investors want to know three things: will the business make money, can this team run it, and how will their money be repaid or grow.
Even if you never apply for funding, writing the plan forces you to work out your prices, costs and break-even point before you spend money.
What should a South African business plan include?
Section
What it answers
Executive summary
What the business is, what you need and why it will succeed (write it last)
Business description
Products or services, legal structure, location, ownership
Market analysis
Who your customers are, how many there are, what they buy now
Competitor analysis
Who else serves them and why customers will choose you
Marketing and sales plan
How you will reach customers, pricing and sales targets
Operations plan
Premises, equipment, suppliers, staff and processes
Management and ownership
Who runs the business, their experience, and the shareholding
Compliance
Registrations: CIPC, SARS, B-BBEE, industry licences
Financial plan
Start-up costs, funding needed, projections, cash flow and break-even
Risks
What could go wrong and how you will handle it
How do I write financial projections?
Base every number on an assumption you can explain. Funders check the assumptions more than the totals.
List your start-up costs (equipment, registration, deposits, initial stock)
Estimate monthly sales: customers multiplied by price, growing gradually
List monthly costs: wages, rent, transport, materials, marketing, insurance
Build a 12-month cash flow, then summarise years two to five
Work out your break-even point: the sales level at which you stop losing money
Show how much funding you need and when it will be repaid
Where can a South African small business get funding?
Options include commercial banks, development finance institutions such as the Small Enterprise Development and Finance Agency (SEDFA) and the National Empowerment Fund (NEF), industry-specific funds, enterprise development programmes run by large companies, and private investors. Each has its own criteria, so tailor the plan to the funder.
What are the common business plan mistakes?
No real market research, just "everyone needs this"
Projections with no explained assumptions
Ignoring compliance costs and timelines
Copying a template without making it specific to your business
Not saying clearly how much money you need and what it is for
Frequently asked questions
How long should a business plan be?
Most small-business plans are 15 to 30 pages plus financial projections. Funders prefer clear and specific over long.
Do I need a business plan to register a company?
No. CIPC does not ask for one. You need it for funding, partners and your own planning.
Can I get funding with just a business plan?
A plan is necessary but rarely enough. Funders also look at your compliance, track record, own contribution and ability to repay.
How many years of projections do funders want?
Usually three to five years, with the first year shown month by month.
Should I pay someone to write my business plan?
You should understand every number in it. A professional writer can structure and polish it, but you must supply the facts and be able to defend the assumptions.
Uminathi Business Start-Up Services is a private company. We are not part of, or acting for, CIPC, SARS, National Treasury (CSD), CIDB, the Department of Employment and Labour or any other government body. Requirements change, so always confirm with the official source.