“Because media advertising can be very expensive, entrepreneurs should plan carefully,” says Diederichs.“It will affect their business budget, or may prove to be a costly exercise if the wrong media is used.
To give you a simple example: Take a coffee shop business.
A basic calculation shows that is would need to sell 8 000 cups of coffee per month just to break even.
And make sure your mentor has run their own business for at least 20 years before you take their advice.” A smart business plan demonstrates your ability to clearly communicate a unique business concept and growth strategies in a document that gives the funder confidence that you can easily sell this concept to your market.
We spoke to two experts who advise that you avoid these common business plan blunders. It serves as a window through which the entrepreneur allows interested parties a bird’s eye view of the prospective business.
Feinstein advises against big ad campaigns, billboards and radio ads unless you have the money.
“Think smart: leaflets, SMS marketing, direct selling.Be precise about how you are going to get your message to the consumer,” says Martin Feinstein, programme director of the National Business Launch Pad.It’s also imperative to assess other business models in your industry.Make sure you are very specific when it comes to describing your typical customer, your product and exactly how you are going to market the product.“Too many business plans glibly talk about ‘mass media advertising’ without having the faintest idea about the costs.Don’t be afraid to copy (legally), there’s nothing really new under the sun.” Discuss your business plans with your family and friends and listen to their advice.You don’t need to take it, but it’s always good to have a sounding board and a different perspective.“The high incidence of business failure within the first year points to a serious lack of financial knowledge among most budding entrepreneurs,” says Diederichs.“Cash flow forecasts and financial planning are two key elements in business survival.A word of caution from Diederichs: “Mentors are great, but too many people use them as a crutch.No-one is going to make it all come together except you.