Making a business plan
All good businesses need planning. Plan well and you will make more money. A business plan keeps you focused on your aims. It says where you are coming from, where you are now, and where you want to go as a business.
It can also help you get a loan from the bank, helps people to lend you money and tells people what you want your business to look like in 3 to 5 years’ time.
Step 1: Business summary and description
One of the first things you need to do is write up a business summary and description. This will help you and others understand what you hope to achieve:
- Business Summary: What do you want to do? Where? How? For how much?
- Business Description: What is happening today? What might happen in the future in your area? What can you do? How can you do it? How will it make money?
Step 2: Production Plan
Make sure that you always have something to sell for example dairy cows. If all of your cows calve at the same time, you will not have milk to sell. If you only have one cow giving milk, what happens if it gets sick?
Sometimes it is good to have more than one business. Try keeping chickens or growing vegetables
Step 3: Marketing Plan
Look at the market. What is happening in the market for your business today? An important step is identifying a buyer for your product, to ensure you are catering for a demand. This will ensure that you make a return on your investment.
What Competition is there? If you do have competitors, you need to think about how you can be different and deliver better value to your customers. What will you do if a competitor comes in?
Take the following 4 P's into consideration - Price, Product, Promotion and Place:
- Sell at a good price. Find out what your neighbours are selling milk for. If the price is too high people will not buy your milk.
- What is your product? In this case it is is clean and fresh milk.
- How do people know that you sell milk? You need to promote it. A poster at the gate? Telling people at church?
- At what place can people buy your milk? From your house? Do you deliver? On OLX or social media?
For more information on finding markets click here.
Step 4: Financial Plan
Production and marketing cost money. How much money do you need? Will you need a loan? Do you have savings that you can use?
You will need to draw up a budget. Plan your budget to borrow, save, have money to run and grow your business, and know how much you can pay yourself.
Step 5: Operations Plan
How will the business run day to day? Will you need people
to help? Will you need to service your equipment and do you need transport?
Step 6: Risk Assessment
What can go wrong? It is important to think hard about any risks i.e. What will you do if your crop harvest is bad and if your cow falls sick?