Transcript Business Approach - World Agroforestry Centre

Writing a business plan
Why, how ……..
What types of businesses relate to
tree domestication?
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Farm- and family-based (horticulture,
nurseries, basket-making, small plantation)
Village or town-based (shop, store, market
stall, kiosk, ambulant trader in fruit,
processing, fuelwood, charcoal, seed, etc.)
Urban small-scale business (fruit vendor,
middleman, artisan, jua kali)
Manufacturer, bulker (furniture makers, fruit
wholesalers, larger nurseries, paper mills)
Feedback into research &
domestication process
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What qualities and quantities are needed by
small and large businesses?
How can input costs be reduced?
How can new business opportunities/niche
markets be created and enhanced?
How can the poorer, more marginalized and
isolated benefit (small business, niche
markets, adding value)?
Diagram of a value chain
What is a business plan?
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A blue print of the enterprise
Road map for the direction to take
Why a business plan?
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A communication tool
A management tool
A planning tool
A performance tool
What goes into a business plan?
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The description of the business
The business objectives
Current performance analysis
A marketing strategy/plan
A production plan
Financial plan
Description of business
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History
Size
Products
Nature
Turnover
location
Objectives of the business??
(Good to write it down anyways)
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What are the targets? (sale, customer
base, amount of profit)
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Time taken to achieve them
Current performance analysis
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strengths, in terms of what is doing
well and why;
weaknesses, in terms of what is going
wrong and why;
opportunities, in terms of what
possibilities exist for improvement
and
threats, in terms what should you be
careful about
Marketing plan/strategy
The 4 P’s of marketing :
 Products (what, how many, services, branding)
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Prices
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Promotion (Unique selling proposition,
(price taker, price maker )
advertising)
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Placement
area)
(target population, geographical
How to arrive at a marketing
strategy?
By carrying out :
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consumer analysis
competitive analysis
location analysis
market trends analysis
Consumer analysis
– Your current customer base
– How do they come to your enterprise,
transport the product back
– How your customers learn about your
product or service
– Patterns or habits your customers and
potential customers share
– Qualities your customers value most
about your product or service
Consumer analysis (2)
– Qualities your customers like least about
your product or service
– Are you offering the kinds of goods or
services they want
– Are your prices consistent with what
buyers view as the product's value?
– Are your promotional programs working?
– Factors which limit or influence their
demand
Competitive analysis
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Who are your five nearest direct
competitors?
Who are your indirect competitors?
Is their business growing, steady, or
declining?
What can you learn from their operations
or from their advertising?
What are their strengths and weaknesses?
How does their product or service differ
from yours?
Location analysis
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Are you located close to a good access
road?
Are you located in a community market?
Are you close to your strongest competitor?
What is the profile of the people who stay
around your business site?
Are your suppliers located near by?
What are commercial activities carried out
in the area?
What kind of access to infrastructure exists
in the area?
Market trends analysis
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Is the industry growing or shrinking?
Are more enterprises/businesses entering
the market?
Are sales going up or down?
Are there any new products in the market?
Are prices going up or down?
Is there any new govt. policy (fiscal or
monetary) that has been introduced for the
sector?
How to use the analyses to make
a marketing plan?
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define your business plan
forecast market demand
pricing of the product
workable promotional strategy
target specific type of customers
How to use the analyses to make
a marketing plan?
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Calculate quality and quantity
understand seasonality of demand
product diversification
plan resource requirements
define a competitive edge
Production plan
What:
 What are the raw materials required, from
where and from whom
 Time taken to produce, amount of resource
required, cost of resource
 How much can be produced at a time, how
often can it be produced
 How does seasonality affect your production
and procurement of raw material
Production plan(2)
Why:
 to keep good inventory control,
 feed the demand of a product,
 get a new product for which demand is
perceived and
 ensure that there is enough supply of
products to meet the market demand.
Financial plan
What:
 Amount costs to be incurred
 Types of costs
 When will the costs come up?
 What will be the mode of payments
 The current savings
 Exchange rate fluctuations expected (in
case of overseas trade)
Financial plan (2)
Why:
 assessing credit needs for the planned
period, in terms of amounts, time when
required,
 pricing of the product,
 planning expansion and diversification,
 executing the business plan
Cost Analysis
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cost of raw material, labour, infrastructure
cost of transport, both of supply to and from
cost of training in the production process
costs of taxes incurred or to be incurred and
profit margins
Cost for a Prunus Africana trader from
Cameroon
Particulars
Amount
16.5 tons wet bark @ 70 FCFA/kg
Collection costs
2 laborers (for 1 month) @ 500 FCFA/day
Collection transport (500 km @ 200 FCFA/km)
Transport Banso-Bamenda (50,000/11 tons)
Drying costs(1 month, 1 laborer @ 500 FCFA/day)
Transport Bamenda-Mutengene (250,000/11 tons)
Tax (2shs/kg)
Miscellaneous (@ 10 %)
Interest on capital ( @ 10 % for 3 months)
1,155,000
TOTAL
30, 000
100,000
75,000
15,000
250,000
22,000
165,000
181,000
1,993,000
Reasons why businesses fail
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Lack of experience
Insufficient capital (money)
Poor location
Poor inventory management
Over-investment in fixed assets
Poor credit arrangements
Personal use of business funds
Unexpected growth
Competition
Thank you and best wishes …..