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The Thousand Rand Challenge Business Plan Template Edit

Name and Contact details of client:

Luzuko Pazima 7 Cedile St Kwanonqabo Mossel Bay

Cell: 073 813 2019


Description of the business Edit

What exactly is it that is going to be sold or done? Sell groceries to people who are unable to go to town, old people and disabled persons. People will be able to buy from a price list, to be delivered to their homes.

What skills are needed to do this? Where is this taught and how much will it cost? People skills and community work experience.

What tools or equipment are needed? Where can they be bought, and how much will they cost? Only need a wheelbarrow to deliver and a bicycle with carrier. R150 for a 2nd hand wheelbarrow. R350 for a 2nd hand bicycle = R500 plus carrier R100 = R600.00

How much space is needed to work from? I would work from home.

Where will the space be found, and how much will it cost to rent? Rent = nil Electricity = R20 p/m Telephone = R100 p/m Stationary = R20 p/m

What sort of people will buy the product? Who are they and where do they live? Old people, disabled people or people how cant go to town for themselves. They live in the location. People who are far from shops and who can not travel. People who do not want to buy at Spaza shops (to expensive) and who buy one month in bulk from wholesalers.

How much and how often will they buy? Will they come to the shop or will it be necessary to deliver? It depends on the price of my products, I would deliver it to them on a monthly basis, deliver. Goods will be delivered to their homes. They will get a price list from me on gods they would need (hampers) and I will ad the delivery cost. I will source the best price so that the client can get the goods at a good price.


Upstream Businesses Edit

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

  • Makiva Wholesalers
  • Checkers
  • Lloyds


Downstream Businesses Edit

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

  • People of the community
  • Disabled people
  • People who feel spaza shops are too expensive.


Competitors Edit

What major competitors will attract clients' spending away from the business products? Shops around the neighbourhood and spaza shops that also do deliveries.

What prices and products do these companies have? The same products for higher price. R300 for the hamper at R225. Through selling and deliveries you will build a customer basis. Prices are on average 30% higher than the wholesalers and bigger outlets.

What makes them popular / unpopular? They over charge on their products. People are not informed and have a problem with transport. People sometimes do not have a choice to buy expensive.

What do they do to attract customers? Specials? Interesting marketing / advertising? They display the products where the customers can see it

Which of the competitors stand out as being particularly good at what they do? Shops around the neighbourhood and they keep lowering their prices. Spaza shops are the only big competitors and they can lower these prices as “specials” so that people could buy. However these prices are still too high.

What can be done to stand out against them? What can be done that is more exciting / more interesting? Include some of the things that are not in their packages. I will draw up a price list of goods from various wholesalers and will only buy goods (that specific product) at the wholesalers with the best price. I will make sure my prices are excellent and I will ad value by doing the deliveries on time. I will service new products/ prices all the time.


Marketing the business to clients Edit

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)? The target is for people who receive grant; it will save them the taxi's fair to use on other things they would need. They will have a “shopping list” to select from and “brand name” products will have to be on the list but prices will also be important. Deliveries must be on time as promise.

How seasonal or fashion-dependent are their buying habits (do they buy only in summer, only over Christmas, etc.)? Throughout the year. People will buy groceries on a monthly basis but may need other items during the year i.e. blanket in the winter, etc.

Do the clients want the products to be the cheapest or the best (low price / low quality or high price / high quality)? The best for less and my shopping list will give them a wide choice.

How do the clients decide where to buy the products? What sorts of advertising / promotions attract their interest? Advertising to clients and telling them that there will be something for free in the hampers. One-to-one selling and door-to-door promotions will be the best marketing. Once a good steady client base is established the business can make a regular monthly income.

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

What can be done to attract the first clients (the most important and most difficult to get)? How much will it cost? I will firstly invite them over for a cup of coffee or tea and tell them what the services are that I offer and if they would be interested in making use of my service. And also what specific products they would like to order. I will show them the buying list or product list with prices.

What will the business be called? Why? Luzuko’s Direct Deliveries I will be delivering directly to the people


The business inputs and outputs Edit

List all of the inputs (products that are required to produce the products):

  • Mieliemeel
  • Flour
  • Sugar
  • Samp
  • Beans
  • Tinn stuff
  • Tea and coffee
  • Eggs
  • Sunfloweroil
  • Yeast
  • Margarien
  • Peanut Butter

List all the suppliers for the inputs and their addresses telephone numbers, and sales terms (cash, 30 days, etc.): Lloyds Suppliers Mossel Bay and Mikeva Mossel Bay Pick ‘n Pay Shopright Vredebest packaging Macro and Game

List all of your outputs (products created by your business): Price lists and product list that people could compare prices from spaza shops to my direct delivery services. Special bags to hold the items. Bicycle or wheelbarrow.

What sort of prices can be charged and how much profit will can be made on each item (a rough estimate)? I will work on a mark up of plus minus 25% and in such case will not ad a delivery cost. See next page for an example of profit on one typical order.

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, it must be sold at a specific time. In most cases I will deliver cash on delivery (COD) and on order. In effect I will not keep unsold stock myself.


Setting up the business Edit

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): Buying all the necessary supplies, get customers. Make a price list and product list and get orders from the clients.

How long will it take to get all of these things and how much will they cost to get? Depending on the amount of orders I receive. To get a price and product list typed and copied and sources the prices and product on the list for plus minus 4 days. To market and get the first clients plus minus 2 days. [Cost of list/typing/travel plus minus = R250.00 1 meter plastic R30.00 1 permanent marker R5.99 1 x 2 plastic tape R20.00 Bicycle second hand plus minus R350.00

List all the fixed costs to be paid every month even if nothing is sold (things like rent, electricity, telephone, and staff wages): Stationary R20.00 Electricity R20.00 Telephone R100.00

Total amount for fixed costs: R140 p/m

How many staff will be needed and how much will each of them be paid (wages must be included in the fixed costs above)? I would work alone, no staff needed

What training will they need, how long will it take and how much will it cost? Training would eventually be given on how to keep book of orders, admin etc. Marketing skills and training can help. My mentor and coach can help me.


The manufacturing or production process Edit

Step-by-step instructions on the manufacturing process: Step 1: Get customers Step 2: Buy groceries Step 3: Buy plastic wrappers, plastic tape, permanent marker. Step 4: Wrap the hampers. Step 5: Deliver the hampers to customers.

Notes: Do a price and product list. Work out profit and mark-up of 25% Go from home to home and get orders. Mark items on price list and tells the client what the total cost will be for the hamper. Collect a deposit from the clients. Buy the items, re-package the items and deliver it with a invoice to the client. Collect the outstanding balance of the money.

What possible problems may happen during each step of the manufacturing process? There may be tearing or loss of plastic. There might be a miss delivery. Theft, Insects or bad stock that has gone past expiry date.

What solutions can be identified for these problems? How much will they cost and how long will they take to fix? Buy enough plastic and keeping record of all clients and their orders. Keep stock in a safe and clean place and do stock taking.

What is the maintenance program for all the equipment? The maintenance is to buy extra plastic and permanent markers The bicycle will need maintenance – minimal cost

What safety requirements are important for production? Not applicable

How will quality control and client feedback be handled? I will need a positive feedback from the clients that is way I need to make sure I deliver quality services. The client must get exactly what he/she ordered and at the price agreed plus delivery must be on time.


Costing and bookkeeping Edit

How many of each of the stock items can reasonably be sold each day (and month)? Depending on how many customers and orders I have. I will aim to do 3 – 4 deliveries per day at a average profit of R40 – R50 profit per delivery.

Will sales volumes be a similar number of each item each month, or is there seasonal variation (cold months, hot, or festivals)? Yes, all the things I will be selling do not have a certain season.

What sort of pricing strategy will be chosen (cheapest or best)? Cheaper and I have to be the best. Being the cheapest and deliver on time, satisfy the need of the customers.

What profit margin will be chosen for the products? 25% mark-up

Write down the cost prices plus the margin for each stock item you will sell, and the selling price Items: Cost Selling 10 kg Mieliemeel: R29, 99 R32, 00 10 kg Flour : R30, 95 R38, 00 10 kg Sugar : R45, 95 R55, 00 5 kg Samp : R18, 95 R26, 00 Beans X2 : R14, 95 R21, 00 Coffee : R15, 21 R19, 00 Tin stuff X3 : R18, 95 R25, 00 Eggs : R16, 95 R23, 00 Sunflower oilx2: R16, 95 R23, 90 Rama : R5, 95 R8, 20 Peanut butter : R3, 95 R6, 40 Yeast x4 : R6, 09 R8, 50 TOTAL : R216, 84 R354, 96

Is this competitive? Will customers pay this much? Do the margins need to be adjusted? By how much? Yes, Pricing will be adjusted if the clients feel they can get a better deal somewhere else.

Now, set a target. How many items for each product need to be sold on a daily (and monthly) basis to be profitable? About 20 hampers per month, 5 a week

Set out the products, costs, margins and selling prices: See figures above

Item

Daily Target

Monthly Target

Cost Price

Margin

Selling Price

Total per Month

10kg Mieliemeel

1

20

R29.00

R3.00

R32.00

= R640.00

10kg Four

1

20

R30.95

R7.05

R38.00

= R760.00

10kg Sugar

1

20

R45.95

R9.05

R55.00

= R1100.00

5kg Samp

1

20

R18.95

R7.05

R26.00

= R520.00

2 x Beans

1

20

R14.95

R6.05

R21.00

= R420.00

Coffee

1

20

R15.21

R3.79

R19.00

= R380.00

3 X Tinn stuff

1

20

R18.95

R6.05

R25.00

= R500.00

4 x Yeast

1

20

R6.09

R2.41

R8.50

= R170.00

Eggs

1

20

R16.95

R6.05

R23.00

= R460.00

2 x Sunflower oil

1

20

R16.95

R6.95

R23.90

= R478

Rama (Margarien)

1

20

R5.95

R2.25

R8.20

= R164.00

Peanut butter

1

20

R3.95

R2.45

R6.40

= R128.00


What trends are included in the projections? Notes on cash-flow statement Use sales targets as per page 19 & 20 Sales increase gradually during the year to R8000.00 Buy a new bicycle during month 6/7 Cost increase as sale increase Stock that I buy and repackaging increase as sales increase. Pay own salary, start at null for first month and increase to R900p/m during the year. Repay loan

Running the business Edit

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. Taking orders Buying stock to fill the order Repackage stock Deliver & collect cash.

Who will act as backup should the person responsible not be there? What do they need to act as backup? I don’t see a urgent need for this at this time

What weekly processes need to be performed? Who is responsible, who is backup and what tools are required? Taking of orders, making of hampers, delivering orders to clients

What monthly processes need to be performed? Who is responsible, who is backup and what tools are required? Some as above, doing admin and marketing

What is the schedule for training and motivating staff? Not applicable at the moment

What processes are required for maintenance and new product creation? Who is responsible and what tools do they need? Not applicable at the moment


Before beginning Edit

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

List some of the support services available (legal, business and other): Reddoor Msobomvu Mentor

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