Three Good Reasons to have a Business Plan before Starting your Business

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It can be a rather disrupting thought, starting your own business… It’s tantalizing, smelling of power, glowing with esteemed status and good fortune. But this starting your own business thing is, sadly, mostly scary, and intimidating at best. It is something you can’t conquer without a plan. Hence, we suggest three good reasons to have a business plan before starting your business…

In spite of having access to more knowledge than ever before, you’ll need a well prepared and structured business plan to help give you the first steps on your new journey…

The three good reasons to have a business plan are as follow:

To focus on your business; To secure funding, and To get people to invest in your business.

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How easy is it for SMEs to get Business Loans from Commercial Banks?

Commercial banks hate giving business loans to small businesses. Indeed, it’s almost impossible for a start-ups and micro businesses to get funded by commercial banks. That’s because banks avoid giving money to what they perceive as ‘risky’ business…

How so? Dr. Paul Smith, Lead Researcher of the “Inaugural South African SMME Access to Finance Report 2017”, found that startups and micro businesses are the most undeserved in the formal business market and therefore represent the largest funding gap.

Start-ups and small businesses mostly do not need large amounts of money to get their business going. Sadly, this may be a major obstacle for them to get funded…

In fact, according to Dr. Smith’s report, is the appetite of funders to loan smaller amounts significantly less than the appetite for them to approve larger loan sizes. Yet 44% of the total SMEs funding requests are for amounts less than R250 000. As a result, whilst many funders claim to offer funding for requests under R1 million, most SMEs battle to raise funding in this range Dr. Smith concludes.

So, what can SMEs do to get business loans from commercial banks?

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Deciding on the Form of Ownership for your New Business

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One of the first issues facing any entrepreneur who wants to launch a business is choosing a form of ownership. Indeed, this decision can have a tremendous impact on almost every aspect of the business. Therefore different forms of business ownership in South Africa are:

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Questions about your business that you should answer before starting

Now that you’ve made the decision to start your own business, the next step is to answer questions about  your business. However, before starting, you must get your mind in order. Here are some questions that, if you answer them honestly, will help you to make the right decision.

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The Reasons Why Start-up Businesses Fail

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It seems that start-up businesses fail more easily than established businesses. Many good business ideas have been vacated by entrepreneurs because of the fear of failure. Furthermore are venture capitalist and banks hesitant to fund start-up businesses because of their perceived high failure rate. But what are the reasons that  start-up businesses fail?

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Bricks and Clicks Retailers – the Best of Both Worlds

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The way forward for retail is Bricks and Clicks (doing business in a shop and online). In an article earlier this year Justin Taylor head of EMEA retail trying to console Bricks and Mortar (physical stores) retailers said: “despite the impact of e-commerce, physical stores remain a cornerstone of consumer engagement”.

The question that remains to be answered is:  Why is online retail growing worldwide and, at the same time, Bricks and Mortar retailers that are not engaging their customers online are closing down?

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Retailers Biggest Challenge – Integrating Online with Offline

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Retailers who are for years in business are using technology that is developed for running a physical shop (Bricks and Mortar) better and making shopping for their customers easier.  A study by Forrester Consulting found that although 90% of the UK retailers are now doing business online. Sadly, most of them find it difficult to join their online and offline technology. Moreover, only 26% of the retailers interviewed mentioned that their sales are influenced by the online channel.

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Research Results Show Reasons Why Start-Up Businesses Fail

Robin Allen from Smart Insights reported results from research recently done by Quartz why 87 bootstrapped (companies that start without venture capital) failed. Allen highlighted the fact that the results show ‘poor marketing’ positioned above pricing issues, legal challenges or burn out as a reason why start-up businesses fail.

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Include a market analysis in your business plan

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Drafting a business plan it is important to do a market analysis. You should determine against who your business is going to compete, what the size of the market is, whether the market is profitable and who your customers will be.

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The value of business plans when you start a business

How many people that want to start their own business have a business plan in mind as one of the first things they must do before opening their doors? Not many… Recent research reported by the “Start Up Donut” showed that more than 1.5 million UK SMEs (about one third) don’t have business plans.

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