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The Thousand Rand Challenge Business Plan Template

This document provides a template of headings for presenting any business idea. The objective is to produce a step-by-step tool that illustrates every step of the business creation process. It should be possible, by following the information, to produce a viable business.

All text in italics should be deleted (including these introductory paragraphs) for use as a template on newly created business idea pages. Please ensure that the new page you're creating really is a new idea. Check the front page for a current list of businesses, or perform a search.

This heading area should contain a brief outline of the nature of the business - change the heading at the top to list the type of business - e.g. Fish and Chips Frying

Contents 1 Description of the business 2 Upstream Businesses 3 Downstream Businesses 4 Competitors 5 Marketing the business to clients 6 The business inputs and outputs 7 Setting up the business 8 The manufacturing or production process 9 Costing and bookkeeping 10 Running the business 11 Before beginning 12 Related articles 13 External links 14 Business Trials

[edit] Description of the business

What exactly is it that is going to be sold or done? The client is going to sell diferent kinds of spices and herbs.

• Selling Perfumes
• Curtains
• Clothes
• Beers
• Chicken & Paraffin

What skills are needed to do this? Where is this taught and how much will it cost? Business Skills, the client do have experience in informal trading. The client did received business training at the West Coast Business Development Centre, for free.

What tools or equipment are needed? Where can they be bought, and how much will they cost? Plastic bags Carton boxes Basket Table and chair Table cloth Advertising boards Spice Herbs

• Ready made curtains and Jeans
• Beer

• The client will buy the perfumes in a factory in Cape Town at R50 per bottle

How much space is needed to work from? The client is working from home no space is needed. The client will do door to door sales.

Where will the space be found, and how much will it cost to rent? There's no cost involved, the client will work from home.

What sort of people will buy the product? Who are they and where do they live? All the households in town. Rural farming people come to town on a Saturday. Ordinary working class people Middle class people, who lives in Porteville and surounding farms.

• Community in members in Joe Slovo,Montague Gardens,Kraaifontein,Dunoon.
• The customers are low to medium income earners mostly ladies.

How much and how often will they buy? Will they come to the shop or will it be necessary to deliver? They will buy on weekends and daily. Door to door sales and deliveries on order.

• They will buy +-15bottle per week.
• The client will be selling everyday for seven days of the week. Some will come to his house to buy.Some will be delivered.

[edit] Upstream Businesses

A list of businesses and ideas that provide the services and products that this business needs.

[edit] Downstream Businesses

A list of businesses and ideas that this business could provide products for.

[edit] Competitors

What major competitors will attract clients' spending away from the business' products? Supermarkets Shops Butchery

• Another perfume seller

What prices and products do these companies have? Mixed spices @ R4.00 p.p. Butchery Pre-Paked spices @ retail prices.

• The other perfume seller is charging R60 per bottle

What makes them popular / unpopular? Popular- Bulk in stock

         No other informal traders in spices

Unpopular-Always the same variety

         Price per unit is more expensive
         Unsifficient variety in stock 

• He is the only one at Joe Slovo who sells perfumes

What do they do to attract customers? Specials? Interesting marketing / advertising? Advertise on shop walls Pamplets

• He has a notice boards outside his house, there no special, no real marketing just a word of mouth.

Which of the competitors stand out as being particularly good at what they do? No one - they don't advertise specials sale for spices

What can be done to stand out against them? What can be done that is more exciting / more interesting? Give better spices at cheaper prices Good variety of spices at hand Will give more spices in stock Sometimes Give-away packets for promotion.

• Will be charging a lower price of R50
• He will also deliver, which the other guy doesn't do.

[edit] Marketing the business to clients

What sort of people will buy the products and how important is product consistency to them (e.g. must every loaf of bread be identical)? Ordinary household in Town The farming people that shopping in town There will be a great variety of spices and herbs at all times.

• The whole community,school children,teachers,factory people.
• Since he will be buying the same the same perfumes from the same suppler,that will maintain consistency and good quality

How seasonal or fashion-dependent are their buying habits (do they buy only in summer, only over Christmas, etc.)? Poeple need spice during the whole year. They tend to buy more spices during summer/Christmas time because they socialize more(barbeques ect,)

• Right through the year

Do the clients want the products to be the cheapest or the best (low price / low quality or high price / high quality)? They want quality products at affordable prices.

• They want good quality at reasonable prices they can afford.

How do the clients decide where to buy the products? What sorts of advertising / promotions attract their interest? They will react on how the products are promoted Door to door sales Low & affordable prices Quality of the products

Do the clients want the same things sold in the same way, or do they want things to change all the time?

• Most people prefer the same perfumes every time

What can be done to attract the first clients (the most important and most difficult to get)? How much will it cost? Promoting product through communication,door to door sale. Lower percentage of profit on each sale.

• By the word of mouth, telling friends first and family.
• The client has customers already, because he has been selling for a year.
• He will also have specials

[edit] The business inputs and outputs

List all of the inputs (products that are required to produce the products): Curry powder Ginger Borrie powder Masala(fish,breyani,meat Cinemon Spice(barbeque,mix,chicken,fish Cloves Paprika Pepper Garlic The products are ready for sale, no promotion are needed

• Different types of perfumes

List all the suppliers for the inputs and their addresses, telephone numbers, and sales terms (cash, 30 days, etc.):

List all of your outputs (products created by your business): Above mentioned products will be pre-packed in plastic bags. Weigh of one packet is 50g Total packets out of 1kg is 20 packets.

• Different types of perfumes

What sort of prices can be charged and how much profit will can be made on each item (a rough estimate)? One packet weigh 50g @R2,50 per packet 1kg = 20packets x R2,50 Selling price = R50(R2,50 p.p) Cost Price = R30,00 (R1,50 p.p) Profit =R1,00 on each item (R20,00) 1 bottle of perfume is sold at R50 and the profit is R20

Do the outputs have a shelf-life? Must they be sold within a specified time limit before they go off / can't be sold? Which ones? Yes they do have a shelf life

• No they don't have a shelf life, they last for a long time as long as they are sealed.

[edit] Setting up the business

List everything that needs to be done to prepare the business to be ready (list everything needed to have as well, both equipment and stock): Scale and spoon Carton Boxes Plastic bags Umbrella(hot& rainy days) Table and chair Advertising boards Table cloths Recording books en pens Cellotape All sort of spices and different kinds of herbs.

• Since he will be selling from home, he will need to advertise the business to his target marke,-putting up boards,distributing pamphlets and also buying stock to sell.

How long will it take to get all of these things and how much will they cost to get? It will take 2-3 days to get the things ready Spice R450.00 Plastic Bags R20.00 Cellotape & R45.00 Recording books & pens Scale R25.00 Umbrella R50.00 Carton R10

• It will take 2 days to buy and advertise

List all the fixed costs to be paid every month even if nothing is sold (things like rent, electricity, telephone, staff wages): Transport R200.00 Per month Cell phone/Telephone card R60.00 p.m

Total amount for fixed costs: R_______________

How many staff will be needed and how much will each of them be paid (wages must be included in the fixed costs above)? One staff member @R200.00 p.w x4

                =R800.00 per month

• The client will work on his own and will have salary of R 1000pm

What training will they need, how long will it take and how much will it cost? Workplace training Business Skills Traing.

[edit] The manufacturing or production process

List every step, from start to finish, to produce the product Fill up plastic bag(pre-packing) with spices Use scale to weigh the exact amount of spice per packet. Use cellotape to seal packet Price every packet using a sticker/label. Then count packets and pack into bigger carton boxes and seal boxes to keep product cool,dry and fresh.

• Buying
• Pricing
• Selling

Allocate each of the manufacturing steps to a process and a process to a staff member (e.g. all manufacturing steps A to process 1): Process - Filling process

         weighing process
         sealing process
         pricing process
         storing process

• The client will sell the perfumes by himself

What possible problems may happen during each step of the manufacturing process? Filling-stock can be split

       broken bags

Weighing-incorrect weighing/scaling Sealing- problems with cellotape not sticking

      - wrong pricing
        not enough labels/stickers

Storing- wet/damp storage place

        stock lost by stealing 

Record keeping- miscounting /overcounting

• Clients orders may not be available on time from the supplier i.e running out of stock

What solutions can be identified for these problems? How much will they cost and how long will they take to fix? Filling - Be carefull when filling bags

         assure strong strong quality bags

Weighing- Be precise when weighing Sealing Storing- Check right price/name label for right

         products

Record keeping- Good record keeping is essential.

• Offering of alternatives
• Wait till the supplier is available and notify the client timeously
• Order stock in good time and buy stock that will las longer
• Use alternative suppliers

What is the maintenance program for all the equipment? The scale should be checked and mantain/service regulary. All equipment must be kept need and tidy at all times.

What safety requirements are important for production? Wash hands before and after working with product Keep product outof the eyes Keep equipment clean Always clean up work place.

• Perfumes need to be handled with care as they are fragile
• They also need to be kept in a cool place as high temperatures can affect the perfume smell

How will quality control and client feedback be handled? Clients will be asked if they are satisfied with products purchased. Complaints will be dealt in a professional mannner. Purchase products (if clients complain) then it will be replace.

[edit] Costing and bookkeeping

How many of each of the stock items can reasonably be sold each day (and month)? Daily 25 items Monthly 25x30 days

       =750 items

• +-4-5 perfumes per day

Will sales volumes be a similar number of each item each month, or is there seasonal variation (cold months, hot, or festivals)?

• Yes, by buying the same products from the same supplier

Yes-Spice are needed every day for cooking.

What sort of pricing strategy will be chosen (cheapest or best)? Cheaper,affordable,but profitable

• Best prices of R50

What profit margin will be chosen for the products

Write down the cost prices plus the margin for each stock item you will sell, and the selling price

• Cost for each perfume R 30 and profit R20

Is this competitive? Will customers pay this much? Do the margins need to be adjusted? By how much?

• Yes, but will be adjasted as the prices of perfumes rises from the supplier

Now, set a target. How many items for each product need to be sold on a daily (and monthly) basis to be profitable?

• He needs to sell from 5 to 8 to be profitable per week.

Set out the products, costs, margins and selling prices:

Paraffin	R16.47	R150.00	R7.00	Margin	Selling Price	Total per Month
Item A	X	X x number of working days in a month	R y.yy	R z.zz	R y.yy + R z.zz	= monthly target x selling price

What trends are included in the projections?

[edit] Running the business

What is the process for running the business on a typical day? Who will be responsible for each step? Link this back to the production process.

Who will act as backup should the person responsible not be there? What do they need to act as backup?

What weekly processes need to be performed? Who is responsible, who is backup and what tools are required?

What monthly processes need to be performed? Who is responsible, who is backup and what tools are required?

What is the schedule for training and motivating staff?

What processes are required for maintenance and new product creation? Who is responsible and what tools do they need?

[edit] Before beginning

List some of the support services available (legal, business and other) that might be needed

What major laws concern the business, and which government departments should be called to keep up to date (list phone numbers)?

[edit] Related articles

Insert links to articles on Wikipedia or other Wikis that may be useful (such as recipes, legal discussions, accounting articles, and so on)

[edit] External links

List links to outside websites that may be useful for anyone starting this business

[edit] Business Trials

List your name if you started a business based on this plan, where you started the business, and how you did Links to case histories - you are welcome to develop these and insert them in your personal page (create this by developing a personal profile)