ENTREPRENEURSHIP:

BUSINESS PLAN

GRADE 9
INTRODUCTION
• WHY BECOME AN ENTREPRENEUR?
• You get to be your OWN BOSS and take be
responsibility for your own success.
• Ability to choose your own clients and projects.
• Offers you the chance to be challenged in new ways.
• Enables you to set your own schedule and make your
own rules.
• Provides an opportunity to work collaboratively with
business partners.
• Gives you a sense of pride and self-accomplish.
• Allows you to reap the benefits of your own creative
ideas.
WHAT IS AN ENTREPRENEUR
• Someone who recognizes opportunities and gaps in
the market
• Some that is confident and a motivator
• Someone who is resourceful and creative
• Someone who is an optimist with feasible goals
• Someone clear vision
• Someone who is comfortable with risk
• Someone who is a leader that works well with clients
and business partners.
BUSINESS PLAN - CONCEPT
• A business plan is a written document that gives
the details and goals to be achieved of a new
business
• It comprises the production, marketing, financial
and the management plans of the business
• A business plan should be reviewed from time to
time to make changes to an existing business or
to expand an existing business
COMPONENTS OF A BUSINESS PLAN
• A business plan have the following essential components:
• Executive Summary: an introduction to the business,
competitive advantages and brief summary of the plan
• Business Strategy: strategies and the values of the
business
• Marketing Strategy: doing a SWOT analysis and market
research, decide on how the product/services will be
distributed, what E-commerce and Technology to be used,
complete a marketing budget and determine what risks
will be incurred and a plan to overcome the risks.
• Team and Management Structure: what skills and
training are required
• Financial Budgets & Forecasts: budgets, income and
balance sheets, ratio analysis and break-even points
FORMAT OF A BUSINESS PLAN
• Cover page of the business plan
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• A Summary of your business

idea
• Description of your business
• The marketing plan of your
business
• The financial plan of your
business
• Extra Information that could help
you to get a loan
FRONT COVER PAGE
• the name of the business;
• the entrepreneur’s name;
• the entrepreneur’s addresses and
• telephone numbers;
• the logo or emblem of your business

BE PROFESSIONAL
ATTRACTIVE
DESIGN EYE CATCHING
TABLE OF CONTENTS
• Will indicate what the business plan will consist of.
• Must also include the summary of your business idea
• The summary must be indicate the main points of the
business plan.
• It must be interesting enough for the investor to be
interested in your business idea.
• Therefore you must be clear on the:
• Why financial assistance is needed
• How much monies will be required and how it will be used
to make your business idea a success
• What income you are going to make to be able to repay
the loan requested.
DESCRIPTION OF PRODUCT/SERVICE
OFFERED BY THE BUSINESS
• A full description must be given of your business idea.
• Should include:
• Legal requirements and licensing
• The type of business ownership that will be opened: Sole
Trader, Partnership or Company.
• The description of the product to be manufactured
/service to be rendered.
• Where do you see your business in 5 years time i.e. the
reasons why your business will be successful.
• Indicate your SWOT analysis – your strengths,
weaknesses, opportunities and threats.
• Provide any other information that will make your
business different and special
 GOALS OF THE BUSINESS
• Start with the vision of your business
• Depict the perfect future
• Attainable
CONSIDER
• Inspiring
YOUR SHORT-
• Buy-in of managers and workers TERM AND
• Acceptable for stakeholders LONG-TERM
• Mission – your goals and objectives GOALS
• What should we provide?
• Who is our market?
• How will we get the products to the market?
• Which resources?
• When is the best time to do it?
THE BUSINESS OWNER
• Name of the owner(s)
• Designation or position in business
• Residential Address
• Telephone number: home, business and cell
• Email address
PRODUCTION PLAN
• Explain the Manufacturing process
• Indicate your production capacity
• Indicate the physical plant i.e. the machinery and
equipment that will be used to manufacture your
product
• Indicate how your natural resources (raw
materials) will be obtained and who the suppliers
will be.
• Calculate the mark-sup to be added to the cost
price of your product.
• What will be the profit earned i.e. your gross profit:
• Sales – Cost of Sales = Gross Profit
MARKETING PLAN
• Short description of who your target market will be
• Who will be the your main customers
• The demographics: age, gender, marital status, race,
education, income and occupation.
• Geographic location(s) of your target market – where do
your customers live
• Who are the potential competitors, how do they reach the
target market, what is their marketing strategies and how
can they influence the success of your business
• A description of your 4 Ps: Product, Price, Place and
Promotion.
• Your budgeting will consist here of your sales forecast for
the first 12 months of your business.
PRODUCT
• Refers to the benefits of buying a product
• What need does the service/product fulfill
• Quality
• What will the quality of your service/product be?
• Some people really want quality vs. others that don’t
really matter
• Features
• How will your product/service differ from the competition
• What will you do differently?
• Design
• How is it going to look?
• Consumers often will purchase because “it looks cool”
PRICE
• Marketing is responsible for establishing the price of their
service/product
• Must consider the costs of all the inputs (materials, labour,
factory overheads, administration and selling &
distribution costs)
• Mark-up Price – How much profit do you want to make on
every product/customer
• Break-even analysis – at what point does your business
start making a profit.
• The price of your product or service tells the customer a
lot about your product
PRICE
• Different Pricing Strategies
• Competition – basing your prices on those of the
competition
• Penetration – making your price low while new
just to get some business
• Bundle – putting the product/service with another
item and bundling the prices
• Psychological – making the price say something
about the quality of your product
PLACE
• Simply refers to how & where you are going to
sell the product to the consumer
• Direct Distribution – selling your product directly
to the consumer
• Exclusive Books vs. Kalahari
• Indirect Distribution – sold through a 3rd party
• What retailers are the best for reaching
your Target Market?
• Example: Selling protein powder – where
do I sell?
PLACE
• For a service : where are you going to locate in
order to best reach your target market
• You want to be in an area that
• your target market frequents
• Says something about your business
• E.g. notice how car dealerships are always close
to a highway or Main road?
PROMOTION
• A successful product or service means
nothing unless the benefit of that
product/service can be communicated to
the Target Market
• Public Relations
• Advertising
• Media
• Sales
MANAGEMENT PLAN
• This will consist of
• the type of ownership (sole trader, partnership, company)
• how many people you will employ, the type of training they
need, their salaries or wages that will have to paid;
• an organisational structure (This shows the positions of
people in the business, for example, a managing director,
an operations manager, an administration manager, a
secretary.);
• your plan of how you will run your business (operating
plan);
• a description of your administration system or system of
how you record information about the business;
• names of suppliers you want to use.
SWOT ANALYSIS AND CONCLUSIONS
• Scanning the internal and external environment of the
business
STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS
STRENGTHS
• Consider the positive aspects of the business.
• What will your business doing well?
• Do you have efficient and effective resources?
• Consider here your employees positive attributes
(education, skills, credentials and computer literacy) and
• The assets of your business such as how much capital
your have?, what assets are in place?, the type of
technology used, who your customers are, your patent
credibility
• What advantages do you have over your competition?
• Do you have strong research and development
capabilities? Manufacturing facilities?
• What other positive aspects, internal to your business,
add value or offer you a competitive advantage?
WEAKNESSES
• What factors are there that will disadvantage you or
distract you from your goals?
• What competitive edge does other businesses have over
your product/service?
• What does your business lack?
• Does your business have limited resources?
• Is your business in a poor location?
OPPORTUNITIES
• These are factors that exist that could give you a
competitive edge to prosper your business
• What opportunities exist in your market or the
environment that you can benefit from?
• Is the perception of your business positive?
• Has there been recent market growth or have there been
other changes in the market the create an opportunity?
• Is the opportunity ongoing, or is there just a window for it?
In other words, how critical is your timing?
THREATS
• What are the changes in the external environment that is
threatening to your business
• Are customer needs/tastes different from your
product/service?
• Who are your competitors and what edge do they have
over your business?
• What business risks you could be exposed to?
• How much will these factors affect you profits?
FINANCIAL PLAN
• Start-up costs
• Calculations of the cost, sales prices, and break-even
point
• A projected income statement and cash budget.
• State whether you will require funding and how will this be
paid back.
FIXED AND VARIABLE COSTS
• Fixed Costs
• These are costs that are incurred irrespective of the
number of goods produced e.g. Salary of supervisor,
factory rental etc.
• Variable Costs
• These costs vary in direct proportion to the number of
products produced e.g. raw materials, wages etc.
BREAK-EVEN POINT
• Direct materials
• Raw materials used to manufacture the product
• Example: Product – Leather Bags (Leather)
• Direct labour
• Employees directly involved in the manufacturing process
• Example: Product – Leather Bags (Cutters, machinists)
• Factory Overheads
• Those costs which cannot be directly linked to the
manufacturing of the items.
• Examples – indirect materials, indirect labour,
depreciation on factory equipment, factory water and
electricity.
BREAK-EVEN POINT
• Selling and distribution costs
• Costs incurred during the selling and distribution process.
• Examples – commission for salespersons, fuel expenses
for salespersons, Carriage on sales, Salaries of
salespersons, depreciation on vehicles of sales reps, bad
debts
• Administration costs
• Costs incurred during the administration in operating the
business
• Examples – office insurance, sundry admin costs, rent of
office building, Salaries of admin staff, depreciation on
office equipment
BREAK-EVEN POINT
• Direct material + Direct Labour + Selling & distribution costs
= Variable costs
• Factory overhead + Administration costs = Fixed Costs
• Break-even point
• Break-even is when a business does not make a profit or a
loss
• Income = expenses – i.e. sales required to cover total costs
• Income < Expenses = LOSS and Income > Expenses =
PROFIT
𝐹𝑖𝑥𝑒𝑑 𝐶𝑜𝑠𝑡
• = 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑠
𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒−𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝐶𝑜𝑠𝑡𝑠 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡
MARK-UP ON SALES
• A higher price charged above the cost price of a product
or the labour rendered
• This is to ensure a profit is earner.
• Cost price x (100% + mark-up %) = Sales
• E.g. if the mark-up percentage is 50% and cost price is
R500 then
• Sales = R500 X 1.5 = R750.

100% + 50% = 150%

𝟏𝟓𝟎
= 1.5
𝟏𝟎𝟎
PROFIT PERCENTAGES
• GROSS PROFIT PERCENTAGE
• Sales – Cost of Sales = Gross Profit

𝑮𝒓𝒐𝒔𝒔 𝑷𝒓𝒐𝒇𝒊𝒕 𝟏𝟎𝟎

𝑿
𝑺𝒂𝒍𝒆𝒔 𝟏
OTHER ISSUES

Political Government affects business operations

Issues

Economic • Recession • Import Pricing

• Unemployment • Trade Restrictions
Issues
• Currency Rates

Socio-Cultural Changes in attitudes, lifestyles, and

Factors opinions provide opportunities and threats

Technology Companies must embrace technology and

innovate to stay competitive
BUSINES PLAN
ACTIVITY