Stage 1: Business Design & Planning

Don’t just dive into business, take time to design your own masterpiece

Most people take starting a business for granted. You shouldn’t!

The success of any business is usually in the planning; both at the beginning and at regular intervals.

Business planning stage: Issues to address

Before you set out to run a business, there are issues that you need to research and decide on. Going through these may take you some time but it can save you a lot of pain in the future. The business planning stage helps you decide if your business has any real chance at success.

Business environment analysis

A business environment is a combination of internal and external factors that influence a company’s operating situation. A company’s operating situation analysis is commonly termed S.W.O.T, that is, Strengths, Weaknesses, Opportunities and Threats.

SWOT analysis

It is a tool for auditing your company and its business environment.

Strengths and weaknesses

The strengths and weaknesses of your company’s operating situation relate to your internal business environment factors. The internal business environment factors are the factors that your company can control such as the physical resources and human capital that you have.

Opportunities and threats

The opportunities and threats focus on the external business environment factors can be divided into two sub-categories which are the micro-environment and the macro-environment.

The micro-environment looks at your opportunities in relation to your buyers and suppliers, that is the size and number of your customers and suppliers as well as your uniqueness of services compared to your competitors. Nash paints is already a household brand in Zimbabwe and in October 2017 they obtained an ISO 9000: 2008 certification which gave them the opportunity to compete regionally and globally The micro-environment also looks at your threats such as the number of competitors in your industry which raises threats of substitution and entries of new competitors.

The macro-environment commonly termed PESTLE, that is, Political, Economical, Social, Technological, Legal and the Environmental factors. You analyse the macro-environment so as to find out the opportunities and threats in the political stability of your nation as well as its economic performance such as inflation rates. The technology state of the environment, e.g. the usage of internet and smartphones is also scanned for opportunities and threats. The legal factor of the PESTLE analysis was used by Nyaradzo Group to offer cash plans of as low as $3/month subsequent to the Insurance and Pensions Commission’s call on funeral assurers to provide micro-insurance products because of the country’s economic situation.

Market research

Market research is the process of assessing the viability of a new product or service through techniques such as surveys, product testing and focus groups. Market research can help you understand your customers and their preferences, identify opportunities to grow and increase profits and recognize and plan for industry and economic shifts. It will also assist to monitor the competition in your market as well as reduce risk in your business decisions.

The following are benefits of conducting market research:

Your business becomes centered on customers

You need to communicate on a regular basis your customers and potential customers through research. Put more effort on understanding your market through market research so that you can craft your products and services accordingly. As a result, this will help you meet and/or exceed consumer needs.  For example, Apple uses the “Apple Customer Pulse” online surveys to compile and analyze the data faster. The surveys have led to different designs and modifications of Apple products such as having bigger screens to view videos and games more clearly.

It keeps you focused

When used properly, marketing research should tell you what’s most selling and important to your consumers and help you to prioritize and maximize your time effectively. It can inform both your short-term and long-term marketing objectives, helping you feel focused in the long run. Delta Corporation remodeled its sorghum beer factories to enhance production of the new 1,5 liter pack( Chibuku Super) replacing the 2 liter pack. Their research statistics showed that the 1.5 liter pack popularly known as batai mhunu is selling more than the scud.

It allows you to pursue the most lucrative growth opportunities

Everyone wants to grow their business,  but we are not always clear on which is the right path to do so. Marketing research can help you weigh and quantify opportunities to prioritize those with the highest revenue potential for your brand. Econet identified the need for a convenient option for EcoCash’s customers to fund their wallets from any bank account linked to ZimSwitch hence they introduced Swipe into EcoCash.

It keeps you relevant and future-oriented

Conducting regular research with consumers and customers enables us to make sure we are constantly adapting and evolving our products to meet long-term needs. While focusing on maximizing short-term results is easy, focusing too much on the short-run limits your brand’s longevity and relevancy in the future. If you aren’t keeping up with consumer, and product and category disruptions, someone else will. If Nokia had researched about the shifting consumer demand instead of clinging on to their 14-year run as the world’s top handset maker, they could have introduced smartphones earlier than iPhone and Samsung.

It improves your decision-making capabilities and reduces your risk.

Market research can provide insightful information about your market, product, audience, competition, and more. When you use a comprehensive research library, you can make decisions with greater clarity and confidence. By having research to backup your marketing decisions, you can optimize your product strategy choices and minimize your risk for failure. For example, G-tel produces battery centric smartphones for power hungry users.

To set realistic targets for your business

With the information you have collected you will be able to set achievable and realistic targets for important business areas like growth, sales and also when it comes to introducing new products and services to your customers. Doves Holdings used to be a local market leader in the funeral services industry but according to their research, they now have around 36 percent of the local market share. Hence, Doves holdings is positioning for growth to acquire over 60 percent of the market over the next five years.

To develop new, effective strategies

Based on the results from your market research you can make informed marketing decisions regarding the pricing of your products and services, the distribution, which marketing channels to use or if you should develop a new product or introduce a new service. Econet made Kwese free on its WiFi hotspots for a limited time, this will make users become more accustomed to knowing where Kwese Wi-Fi hotspots are located and how to connect to them. The results of market research will also help you to make informed decisions about your existing business activities.

Your ideal customer

Your ideal customer has a certain type of characteristics that fit your target market which is likely to be more profitable. Identifying a target market helps your company develop effective marketing communication strategies, such as the slang words to use when communicating to the youth which is the 18-30 years age group, hence converting them into customers.

Value proposition

A value proposition is the promise of value that you will deliver to your customers. It’s the primary reason a prospect should buy from you. It convinces a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.

The following are the benefits of a value proposition:

Builds confidence

Having a strong and honed value proposition gives you, your team, and your stakeholders clarity so that you can progress without questioning and second-guessing your every move. Confidence comes from knowing that you’re making a difference to the people that you’re serving, that you’re doing so in a way that’s meaningful to them, and that your actions are aligned to delivering an overall remarkable experience. People want to feel as though they’re valued members of a winning team on an inspired mission.

Improves customer understanding and engagement

The value proposition gives you the basis to engage with customers in a compelling manner by understanding how they view you, and your products or services. The value proposition determines the factors that not only make a difference to your audience, but do so in aspects or ways that are meaningful to them. By grounding your solution in an understanding of your audience and their specific need, you can engage with them in a much more compelling and effective manner.

Gives direction

Whether you’re a start-up or an established business launching a new product or service, you’re unquestionably excited about your concept. If your value proposition is not clear you risk developing something that may satisfy your needs, but not those of your target customers. A value proposition gives you direction by defining your ideal target audience right up-front, and then identifying and understanding a core need that you look to satisfy with your planned solution For example, Mercedes Benz’s value proposition is to provide owners with a world-class luxury experience.

Creates focus

A robust value proposition gives you and your team focus by identifying the fundamental initiatives, activities and aspects of your business that will have the greatest impact on meeting your defined target audience’s needs. It outlines what you must deliver to meet your defined audience’s needs and create an overall remarkable experience. If an activity or initiative isn’t consistent with your value proposition then you abandon the that initiative.

Provides clarity of messaging

Especially if your company is a start-up without any brand recognition, you’re going to have to paint a very clear picture as to why you’re worth people’s time. The value proposition frames not only how you’re creating value for your audience by addressing a core need, but critically why your solution is better than what they are currently doing or using, or versus whatever else is potentially out there that could do so. By thinking in this way right upfront, and building these facets directly into your product or service, you have the basis to define a clear, consistent and engaging message that will relate to your audience.

Increases effectiveness of marketing

The value proposition directs your marketing efforts to concentrate on those activities that will generate the greatest results. By truly understanding your desired customers and their core need that you’re solving for, you’re able to focus on the channels that are most relevant, and will effectively communicate the benefits and advantages of your solution.

Form of business incorporation

When registering a business in Zimbabwe the first step is to figure out what type of business you would want to incorporate under. There are two types of companies which are the private limited company and the private business corporation.

Here are the reasons why you should register your business

To be more professional

First impressions are important they say. This is even more true in business. Would you prefer to buy an expensive smartphone that has been created by an individual or by a company? That’s the power of registering a company. It establishes you as a professional in your field. You prove to the world that you are legitimate and are not after a quick buck. It shows your customers that you are serious and will not simply disappear tomorrow.

To protect and secure your business name

Registering your business name protects it from being used by other businesses. When you register a company, the name that you choose is reserved to you only. You may not have plans to start operating right away but registering that name that you have always wanted ensures that its available to you when you are finally ready to launch your dream business. Once your company name has been incorporated and registered, you can further restrict its usage by registering it as a trade name or trademark. This ensures that no-one else can legally use it.

To get access to funding

One of the advantages you enjoy when you register a company is the increased access that you get to funding sources. There are various government loans available for youths and small businesses. In addition, various economic development agencies, banks and NGOs provide low-interest loans to small to medium enterprise owners who may not qualify for traditional commercial loans.

To separate personal and business finances

Most small business owners discover painfully that mixing business and personal finances is a recipe for disaster. The majority of small businesses that fail fall into this trap. If you keep business finances in your pocket you run into the temptation of ‘helping out Uncle Thomas’  when he asks for financial help. And when month-end comes you discover that you don’t have enough to pay for business rentals or suppliers. Having your business incorporated helps you separate these two so that you don’t run into problems tomorrow.

To participate in tender processes

In order to apply for both government and commercial tenders you need to be a legalized business entity. All tenders have on their top of the list the requirement to be an incorporated company. Simply put: ‘No registration papers, no tender acceptance’. Most tenders are advertised for big contracts and orders, so this represents a very real opportunity for your business to break out and make some large amounts of cash. Don’t neglect this.

Lower taxes

When doing business you have the option to do so as an individual or as a registered business. When you trade as an individual, you pay tax on the additional income you receive from your business. Unfortunately you don’t get any tax deductions on the expenses you incur in running the business e.g. internet costs, telephone costs, transport, rents, etc. These are all regarded as personal expenses more or less. One of the more appealing reasons for registering a business, as opposed to simply reporting your additional income, is the extra money you have left over. In Zimbabwe, businesses  receive tax deductions for business-related expenses, including use of your car, a home office or a rented storefront, insurance, and more.

Liability protection

There are two types of businesses registered in Zimbabwe and these are the Private Limited Companies and Private Business Corporations. The business is treated as a separate legal entity from it’s owners and enjoys corporate citizenship in Zimbabwe as if it were an individual. Both types of businesses offer limited liability to their owners or shareholders. Both business types provide personal liability protection for business decisions or actions of the business. This means that if the company incurs debt or is sued, its members are not required to satisfy the claims with their personal assets. By registering your business, your business and personal assets are separated from each other. There are many reasons to incorporate but for the protection of your family, this may be the most important.

Business continuity

Do the names Irvines, Microsoft, Facebook or Google sound familiar to you? Good. What do they all have in common? They were started by individuals. And because these individuals registered their companies it means their businesses are able to continue without them. They are now separate entities from their person. That’s the power of registering a business. It ensures the continuity of your business beyond just you. Customers are interested in knowing if your company has a future and if the company is able to continue serving them in your absence.

Vision, mission & core values

They help you to provide your stakeholders with a statement of the company’s purposes, goals and values. You use these tools to set priorities, build unity and give directions to company stakeholders such as your customers, employees and shareholders.

Your vision statement describes the clear and inspirational long-term desired change resulting from your company’s work. It is a declaration of the organization’s purpose and what you hope to achieve in the future. Lobels’ vision statement is to be the most preferred and trusted provider of uncompromised quality and healthy food products in Zimbabwe and Africa.

The mission statement announces to the world why your company exists.  It describes what your company does and its overall intention. The mission statement supports your vision statement. For example, CBZ’s mission is to bring convenience to their clients through innovation, efficient service delivery, competence and flexibility whilst adhering to principles of integrity, transparency and fairness.

Core values are the fundamental beliefs of your organization. These guiding beliefs dictate behavior and can help people understand the difference between right and wrong. The core values for Eversharp  are communication, respect, teamwork, transparency and commitment.

Location

You should consider a number of factors so as to come up with the optimum location for your business operations. The advantages to a having a good business location can include improved revenue and increased marketing exposure.

Operations and Equipment

Businesses must have ample space for the equipment required to produce their products and services. If you have a manufacturing company, you will require extensive space for equipment and inventory. Therefore you should consider your business’s products and services when establishing your location.

Customer Convenience

If your business draws customers to a store location, the site must be convenient to the customer. For instance,the location of Foodworld at Copacabana terminus in Harare and T.M Pick ‘n’ Pay at Hyper in Bulawayo. The location must be easily accessible and provide the customer with a feeling of safety upon their arrival and exit.

Parking

Ample parking is important for customers and employees. If customers are unable to find suitable parking, they might choose to visit a competitor who has the same qualified services with more convenient parking. You also need adequate space for employees to park at or near your location.

Service and Sales

Your business’s service and sales opportunities are greatly affected by your location. Your selected location should center on your target customers and should generate walk-in traffic. Most fuel stations are located near public transport pickup areas for this reason.

Inventory

Any required inventory must fit comfortably in your location. Determine how much inventory you will carry and estimate your needed space for displays as well as storage.

Accessibility

Location is of utmost importance to businesses that sell goods or services directly to customers at brick-and-mortar establishments. For example, a gift shop located in a popular mall such as Bulawayo Center or Joina City is likely to attract more customers than a similar shop located downtown. Location can also influence a business’s ability to market itself. A business with a storefront on a busy street is more likely to attract customers with signs and storefront displays than a business that is not in a busy area.

Competition

A business’s location can affect the competition it faces from businesses that sell similar products and services. For instance, an upscale neighborhood in low density areas might have dozens of fast food restaurants such as Chicken Inn, while high density areas might not have such type of restaurants. Starting a business in an area with few direct competitors can increase the likelihood of attracting customers.

Operating Expenses

The location of a business can influence the total cost of operation. Renting a storefront on a popular street or in a highly trafficked mall is likely to be more expensive than opening a store in a small commercial district in a residential area. A business could be better off opening its doors in an area that is cheap, even if it results in fewer total sales.

Home Businesses

Home-based businesses offer a variety of advantages over companies located away from the home, which can make them attractive to small-scale business owners. The cost of operating a home-based business is typically lower than paying to rent retail space or office space in other locations. Home offices can cut down on travel costs and make it easier for owners to balance work with home life. The cost of operating a home office is also tax deductible.

Revenue model

It is the description of how a business will earn income, produce profits and generate a higher than average return on investment. It identifies which revenue source to pursue, what value to offer, how to price the value, and who pays for the value.

Here are some of the revenue models;

The pay as you go model

In this model, usage is metered and the user pays according to their consumption. Most telephone network operators and internet access providers such as Netone and Econet use this model.

The recurring revenue (subscription) model

This model allows subscribers to pay for services on a per period basis. Companies like Kwese TV and DSTV operate on such a model.

The franchise model

In this model, you find someone with a successful business model and then pay royalties to them. That way you instantly benefit from a proven system instead of starting one from scratch. Companies like Spar and McDonalds use this model.

The low cost model

In this model, costs are kept to a minimum allowing the business to reduce their prices to a very low price. The trick is then to push huge volumes to generate profit. Fastjet and most wholesalers use such a model.

The freemium model

This model offers their basic offering for free and extras at a cost. The trick is to gain a lot of users since there is no cost to the user. Once a user signs up you then work hard to convert the free users into paying users. Companies like Skype and LinkedIn use such a model.

The affiliate model

This model focuses on finding new customers using existing ones. They pay out an affiliate commission or offer rewards for every referral to the business. Amazon uses such a model.

The direct sales model

This model focuses on selling directly to consumers thereby eliminating the need for distributors and middlemen. For example, Bata shoes sells directly to consumers.

The group-buy model

In this model, the company sells a product at a discounted price if a certain condition is met such as the total number of buyers at the time of purchase e.g. Groupon.

Employment model

It is about the appropriate type of employment that will best suit the nature of your company. A good employment model will result in lower absenteeism and improved worker relationships, hence, the employees will be ready and willing to make a long-term commitment to your company.

Here are some of the employee types;

Full-time employees

They are the most common type of employees and they are generally offered permanent positions with a salary or hourly wage.There is no set minimum number of hours for full-time employees. However, most employers recognize full-time work as 35+ hours per week. Examples of full-time employees include receptionists and all types managers.

Part-time employees

A part-time worker works fewer contracted hours than a full-time employee. However, they generally also hold permanent positions, and the number of hours they’re scheduled to work per week should be clearly visible within the contract, but they may have the option to work overtime, if and when desired. Benefits of part-time employment include a more flexible schedule for the employee, allowing individuals to fit their work around other commitments, and the opportunity for people to try out new roles without having to give up vast amounts of your time. Most waiters and waitresses are an example of part-time employees.

Fixed-term employees

Fixed-term employees last for a specific amount of time, which has been set and agreed in advance. In some instances, fixed-term employees may not have an exact time-frame, but will instead end when a specific task has been completed or fulfilled. Depending on the role, and an individual’s performance, fixed-term contacts can sometimes lead to longer term positions. Examples include students on industrial attachment and drivers for a specific event such as weddings.

Temporary employees

Similar to fixed-term, temporary employees are offered a contract that is not expected to become permanent. Usually they would have some form of end date included, however, these may be subject to change. As such, temporary workers may have their contracts extended in line with demand and availability. Temporary teachers are a common example in Zimbabwe.

Agency employees

Agency staff have their contracts agreed and managed by a recruitment consultancy or employment agency. They usually work on a temporary basis, and the length of their contract will depend on demand from the employer, as well as their availability. The Valcol Group company offers such services majoring in I.T experts and secretaries.

 

Freelancers and contractors

When working with freelancers or contracted basis, contracts may vary from position to position. However, individuals working in this way are generally considered self-employed. Contracts may include start and end dates, or the salary may be based on set projects or pieces of work, meaning the contract effectively ends upon delivery. Freelance and contract workers may also not be entitled to the same rights as more permanent members of staff, although they do get to manage their own schedule, and negotiate their own terms. Most graphic designers are freelancers.

 

Zero hour employees

Also known as casual employees, zero hour employees specify that an employee works only when required by their employer. The employer is under no obligation to provide a set amount of hours to work. And, similarly, the employee does not have to accept any work that is offered to them. Individuals on a zero hour contract may also seek employment elsewhere. In fact, their contract would not be valid if it prevented them from looking for, or accepting, work from another employer.

Marketing plan

A marketing plan is a document that outlines the business marketing and advertising efforts for the upcoming specified period. This will ensure that your company’s money is spent sensibly and that you reach all of the proper target audiences

A marketing plan should always include

  • Marketing Vision
  • Your Ideal Customer
  • Remarkable Difference (How are you different from your competitors?)
  • Marketing Strategy
  • Value Proposition
  • Marketing Materials
  • Lead Generation Plan (motivating your target market to have interest for your product)
  • Lead Conversion Plan (effectively turning new seller leads into buyers)
  • Customer Service Experience (monitoring your customer support services)
  • Marketing Calendar
  • Sales Forecast
  • Marketing Budget
  • Marketing Training

Budget (startup costs)

It is an estimation of the startup costs which are those expenses incurred before the business is running. It ensures that you will always have enough money for the things you need and the things that are important to you. Following a budget or spending plan will also keep you out of debt or help you work your way out of debt if you are currently in debt.

Ask yourself these questions

  • How much can be sold in Year 1?
  • How much will sales grow in the following years?
  • How will the products and/or services you are selling be priced?
  • How much will it cost to produce your product? How much inventory will you need?
  • What will your operating expenses be?
  • How many employees will you need? How much will you pay them? How much will you pay yourself? What benefits will you offer? What will your payroll and unemployment taxes be?
  • What will the income tax rate be?
  • What will your facilities needs be? How much will it cost you in rent or debt service for these facilities?
  • What furniture and equipment will be needed to start the business? How much will it cost? Will there be additional equipment needs in subsequent years?
  • What payment terms will you offer customers if you sell on credit? What payment terms will your suppliers give you?
  • How much will you need to borrow?
  • What will the collateral be? What will the interest rate be?

Business environment analysis

Business environment analysis

A business environment is a combination of internal and external factors that influence a company’s operating situation. A company’s operating situation analysis is commonly termed S.W.O.T, that is, Strengths, Weaknesses, Opportunities and Threats.

SWOT analysis

It is a tool for auditing your company and its business environment.

Strengths and weaknesses

The strengths and weaknesses of your company’s operating situation relate to your internal business environment factors. The internal business environment factors are the factors that your company can control such as the physical resources and human capital that you have.

Opportunities and threats

The opportunities and threats focus on the external business environment factors can be divided into two sub-categories which are the micro-environment and the macro-environment.

The micro-environment looks at your opportunities in relation to your buyers and suppliers, that is the size and number of your customers and suppliers as well as your uniqueness of services compared to your competitors. Nash paints is already a household brand in Zimbabwe and in October 2017 they obtained an ISO 9000: 2008 certification which gave them the opportunity to compete regionally and globally The micro-environment also looks at your threats such as the number of competitors in your industry which raises threats of substitution and entries of new competitors.

The macro-environment commonly termed PESTLE, that is, Political, Economical, Social, Technological, Legal and the Environmental factors. You analyse the macro-environment so as to find out the opportunities and threats in the political stability of your nation as well as its economic performance such as inflation rates. The technology state of the environment, e.g. the usage of internet and smartphones is also scanned for opportunities and threats. The legal factor of the PESTLE analysis was used by Nyaradzo Group to offer cash plans of as low as $3/month subsequent to the Insurance and Pensions Commission’s call on funeral assurers to provide micro-insurance products because of the country’s economic situation.

Market research

Market research

Market research is the process of assessing the viability of a new product or service through techniques such as surveys, product testing and focus groups. Market research can help you understand your customers and their preferences, identify opportunities to grow and increase profits and recognize and plan for industry and economic shifts. It will also assist to monitor the competition in your market as well as reduce risk in your business decisions.

The following are benefits of conducting market research:

Your business becomes centered on customers

You need to communicate on a regular basis your customers and potential customers through research. Put more effort on understanding your market through market research so that you can craft your products and services accordingly. As a result, this will help you meet and/or exceed consumer needs.  For example, Apple uses the “Apple Customer Pulse” online surveys to compile and analyze the data faster. The surveys have led to different designs and modifications of Apple products such as having bigger screens to view videos and games more clearly.

It keeps you focused

When used properly, marketing research should tell you what’s most selling and important to your consumers and help you to prioritize and maximize your time effectively. It can inform both your short-term and long-term marketing objectives, helping you feel focused in the long run. Delta Corporation remodeled its sorghum beer factories to enhance production of the new 1,5 liter pack( Chibuku Super) replacing the 2 liter pack. Their research statistics showed that the 1.5 liter pack popularly known as batai mhunu is selling more than the scud.

It allows you to pursue the most lucrative growth opportunities

Everyone wants to grow their business,  but we are not always clear on which is the right path to do so. Marketing research can help you weigh and quantify opportunities to prioritize those with the highest revenue potential for your brand. Econet identified the need for a convenient option for EcoCash’s customers to fund their wallets from any bank account linked to ZimSwitch hence they introduced Swipe into EcoCash.

It keeps you relevant and future-oriented

Conducting regular research with consumers and customers enables us to make sure we are constantly adapting and evolving our products to meet long-term needs. While focusing on maximizing short-term results is easy, focusing too much on the short-run limits your brand’s longevity and relevancy in the future. If you aren’t keeping up with consumer, and product and category disruptions, someone else will. If Nokia had researched about the shifting consumer demand instead of clinging on to their 14-year run as the world’s top handset maker, they could have introduced smartphones earlier than iPhone and Samsung.

It improves your decision-making capabilities and reduces your risk.

Market research can provide insightful information about your market, product, audience, competition, and more. When you use a comprehensive research library, you can make decisions with greater clarity and confidence. By having research to backup your marketing decisions, you can optimize your product strategy choices and minimize your risk for failure. For example, G-tel produces battery centric smartphones for power hungry users.

To set realistic targets for your business

With the information you have collected you will be able to set achievable and realistic targets for important business areas like growth, sales and also when it comes to introducing new products and services to your customers. Doves Holdings used to be a local market leader in the funeral services industry but according to their research, they now have around 36 percent of the local market share. Hence, Doves holdings is positioning for growth to acquire over 60 percent of the market over the next five years.

To develop new, effective strategies

Based on the results from your market research you can make informed marketing decisions regarding the pricing of your products and services, the distribution, which marketing channels to use or if you should develop a new product or introduce a new service. Econet made Kwese free on its WiFi hotspots for a limited time, this will make users become more accustomed to knowing where Kwese Wi-Fi hotspots are located and how to connect to them. The results of market research will also help you to make informed decisions about your existing business activities.

Your ideal customer

Your ideal customer

Your ideal customer has a certain type of characteristics that fit your target market which is likely to be more profitable. Identifying a target market helps your company develop effective marketing communication strategies, such as the slang words to use when communicating to the youth which is the 18-30 years age group, hence converting them into customers.

Value proposition

Value proposition

A value proposition is the promise of value that you will deliver to your customers. It’s the primary reason a prospect should buy from you. It convinces a potential consumer that one particular product or service will add more value or better solve a problem than other similar offerings.

The following are the benefits of a value proposition:

Builds confidence

Having a strong and honed value proposition gives you, your team, and your stakeholders clarity so that you can progress without questioning and second-guessing your every move. Confidence comes from knowing that you’re making a difference to the people that you’re serving, that you’re doing so in a way that’s meaningful to them, and that your actions are aligned to delivering an overall remarkable experience. People want to feel as though they’re valued members of a winning team on an inspired mission.

Improves customer understanding and engagement

The value proposition gives you the basis to engage with customers in a compelling manner by understanding how they view you, and your products or services. The value proposition determines the factors that not only make a difference to your audience, but do so in aspects or ways that are meaningful to them. By grounding your solution in an understanding of your audience and their specific need, you can engage with them in a much more compelling and effective manner.

Gives direction

Whether you’re a start-up or an established business launching a new product or service, you’re unquestionably excited about your concept. If your value proposition is not clear you risk developing something that may satisfy your needs, but not those of your target customers. A value proposition gives you direction by defining your ideal target audience right up-front, and then identifying and understanding a core need that you look to satisfy with your planned solution For example, Mercedes Benz’s value proposition is to provide owners with a world-class luxury experience.

Creates focus

A robust value proposition gives you and your team focus by identifying the fundamental initiatives, activities and aspects of your business that will have the greatest impact on meeting your defined target audience’s needs. It outlines what you must deliver to meet your defined audience’s needs and create an overall remarkable experience. If an activity or initiative isn’t consistent with your value proposition then you abandon the that initiative.

Provides clarity of messaging

Especially if your company is a start-up without any brand recognition, you’re going to have to paint a very clear picture as to why you’re worth people’s time. The value proposition frames not only how you’re creating value for your audience by addressing a core need, but critically why your solution is better than what they are currently doing or using, or versus whatever else is potentially out there that could do so. By thinking in this way right upfront, and building these facets directly into your product or service, you have the basis to define a clear, consistent and engaging message that will relate to your audience.

Increases effectiveness of marketing

The value proposition directs your marketing efforts to concentrate on those activities that will generate the greatest results. By truly understanding your desired customers and their core need that you’re solving for, you’re able to focus on the channels that are most relevant, and will effectively communicate the benefits and advantages of your solution.

Choose form of business incorporation

Choose form of business incorporation

When registering a business in Zimbabwe the first step is to figure out what type of business you would want to incorporate under. There are two types of companies which are the private limited company and the private business corporation.

Here are the reasons why you should register your business

To be more professional

First impressions are important they say. This is even more true in business. Would you prefer to buy an expensive smartphone that has been created by an individual or by a company? That’s the power of registering a company. It establishes you as a professional in your field. You prove to the world that you are legitimate and are not after a quick buck. It shows your customers that you are serious and will not simply disappear tomorrow.

To protect and secure your business name

Registering your business name protects it from being used by other businesses. When you register a company, the name that you choose is reserved to you only. You may not have plans to start operating right away but registering that name that you have always wanted ensures that its available to you when you are finally ready to launch your dream business. Once your company name has been incorporated and registered, you can further restrict its usage by registering it as a trade name or trademark. This ensures that no-one else can legally use it.

To get access to funding

One of the advantages you enjoy when you register a company is the increased access that you get to funding sources. There are various government loans available for youths and small businesses. In addition, various economic development agencies, banks and NGOs provide low-interest loans to small to medium enterprise owners who may not qualify for traditional commercial loans.

To separate personal and business finances

Most small business owners discover painfully that mixing business and personal finances is a recipe for disaster. The majority of small businesses that fail fall into this trap. If you keep business finances in your pocket you run into the temptation of ‘helping out Uncle Thomas’  when he asks for financial help. And when month-end comes you discover that you don’t have enough to pay for business rentals or suppliers. Having your business incorporated helps you separate these two so that you don’t run into problems tomorrow.

To participate in tender processes

In order to apply for both government and commercial tenders you need to be a legalized business entity. All tenders have on their top of the list the requirement to be an incorporated company. Simply put: ‘No registration papers, no tender acceptance’. Most tenders are advertised for big contracts and orders, so this represents a very real opportunity for your business to break out and make some large amounts of cash. Don’t neglect this.

Lower taxes

When doing business you have the option to do so as an individual or as a registered business. When you trade as an individual, you pay tax on the additional income you receive from your business. Unfortunately you don’t get any tax deductions on the expenses you incur in running the business e.g. internet costs, telephone costs, transport, rents, etc. These are all regarded as personal expenses more or less. One of the more appealing reasons for registering a business, as opposed to simply reporting your additional income, is the extra money you have left over. In Zimbabwe, businesses  receive tax deductions for business-related expenses, including use of your car, a home office or a rented storefront, insurance, and more.

Liability protection

There are two types of businesses registered in Zimbabwe and these are the Private Limited Companies and Private Business Corporations. The business is treated as a separate legal entity from it’s owners and enjoys corporate citizenship in Zimbabwe as if it were an individual. Both types of businesses offer limited liability to their owners or shareholders. Both business types provide personal liability protection for business decisions or actions of the business. This means that if the company incurs debt or is sued, its members are not required to satisfy the claims with their personal assets. By registering your business, your business and personal assets are separated from each other. There are many reasons to incorporate but for the protection of your family, this may be the most important.

Business continuity

Do the names Irvines, Microsoft, Facebook or Google sound familiar to you? Good. What do they all have in common? They were started by individuals. And because these individuals registered their companies it means their businesses are able to continue without them. They are now separate entities from their person. That’s the power of registering a business. It ensures the continuity of your business beyond just you. Customers are interested in knowing if your company has a future and if the company is able to continue serving them in your absence.

Vision, mission and core values

Vision, mission and core values

They help you to provide your stakeholders with a statement of the company’s purposes, goals and values. You use these tools to set priorities, build unity and give directions to company stakeholders such as your customers, employees and shareholders.

Your vision statement describes the clear and inspirational long-term desired change resulting from your company’s work. It is a declaration of the organization’s purpose and what you hope to achieve in the future. Lobels’ vision statement is to be the most preferred and trusted provider of uncompromised quality and healthy food products in Zimbabwe and Africa.

The mission statement announces to the world why your company exists.  It describes what your company does and its overall intention. The mission statement supports your vision statement. For example, CBZ’s mission is to bring convenience to their clients through innovation, efficient service delivery, competence and flexibility whilst adhering to principles of integrity, transparency and fairness.

Core values are the fundamental beliefs of your organization. These guiding beliefs dictate behavior and can help people understand the difference between right and wrong. The core values for Eversharp  are communication, respect, teamwork, transparency and commitment.

Location

Location

You should consider a number of factors so as to come up with the optimum location for your business operations. The advantages to a having a good business location can include improved revenue and increased marketing exposure.

Operations and Equipment

Businesses must have ample space for the equipment required to produce their products and services. If you have a manufacturing company, you will require extensive space for equipment and inventory. Therefore you should consider your business’s products and services when establishing your location.

Customer Convenience

If your business draws customers to a store location, the site must be convenient to the customer. For instance,the location of Foodworld at Copacabana terminus in Harare and T.M Pick ‘n’ Pay at Hyper in Bulawayo. The location must be easily accessible and provide the customer with a feeling of safety upon their arrival and exit.

Parking

Ample parking is important for customers and employees. If customers are unable to find suitable parking, they might choose to visit a competitor who has the same qualified services with more convenient parking. You also need adequate space for employees to park at or near your location.

Service and Sales

Your business’s service and sales opportunities are greatly affected by your location. Your selected location should center on your target customers and should generate walk-in traffic. Most fuel stations are located near public transport pickup areas for this reason.

Inventory

Any required inventory must fit comfortably in your location. Determine how much inventory you will carry and estimate your needed space for displays as well as storage.

Accessibility

Location is of utmost importance to businesses that sell goods or services directly to customers at brick-and-mortar establishments. For example, a gift shop located in a popular mall such as Bulawayo Center or Joina City is likely to attract more customers than a similar shop located downtown. Location can also influence a business’s ability to market itself. A business with a storefront on a busy street is more likely to attract customers with signs and storefront displays than a business that is not in a busy area.

Competition

A business’s location can affect the competition it faces from businesses that sell similar products and services. For instance, an upscale neighborhood in low density areas might have dozens of fast food restaurants such as Chicken Inn, while high density areas might not have such type of restaurants. Starting a business in an area with few direct competitors can increase the likelihood of attracting customers.

Operating Expenses

The location of a business can influence the total cost of operation. Renting a storefront on a popular street or in a highly trafficked mall is likely to be more expensive than opening a store in a small commercial district in a residential area. A business could be better off opening its doors in an area that is cheap, even if it results in fewer total sales.

Home Businesses

Home-based businesses offer a variety of advantages over companies located away from the home, which can make them attractive to small-scale business owners. The cost of operating a home-based business is typically lower than paying to rent retail space or office space in other locations. Home offices can cut down on travel costs and make it easier for owners to balance work with home life. The cost of operating a home office is also tax deductible.

Revenue model

Revenue model

It is the description of how a business will earn income, produce profits and generate a higher than average return on investment. It identifies which revenue source to pursue, what value to offer, how to price the value, and who pays for the value.

Here are some of the revenue models;

The pay as you go model

In this model, usage is metered and the user pays according to their consumption. Most telephone network operators and internet access providers such as Netone and Econet use this model.

The recurring revenue (subscription) model

This model allows subscribers to pay for services on a per period basis. Companies like Kwese TV and DSTV operate on such a model.

The franchise model

In this model, you find someone with a successful business model and then pay royalties to them. That way you instantly benefit from a proven system instead of starting one from scratch. Companies like Spar and McDonalds use this model.

The low cost model

In this model, costs are kept to a minimum allowing the business to reduce their prices to a very low price. The trick is then to push huge volumes to generate profit. Fastjet and most wholesalers use such a model.

The freemium model

This model offers their basic offering for free and extras at a cost. The trick is to gain a lot of users since there is no cost to the user. Once a user signs up you then work hard to convert the free users into paying users. Companies like Skype and LinkedIn use such a model.

The affiliate model

This model focuses on finding new customers using existing ones. They pay out an affiliate commission or offer rewards for every referral to the business. Amazon uses such a model.

The direct sales model

This model focuses on selling directly to consumers thereby eliminating the need for distributors and middlemen. For example, Bata shoes sells directly to consumers.

The group-buy model

In this model, the company sells a product at a discounted price if a certain condition is met such as the total number of buyers at the time of purchase e.g. Groupon.

Employment model

Employment model

It is about the appropriate type of employment that will best suit the nature of your company. A good employment model will result in lower absenteeism and improved worker relationships, hence, the employees will be ready and willing to make a long-term commitment to your company.

Here are some of the employee types;

Full-time employees

They are the most common type of employees and they are generally offered permanent positions with a salary or hourly wage.There is no set minimum number of hours for full-time employees. However, most employers recognize full-time work as 35+ hours per week. Examples of full-time employees include receptionists and all types managers.

Part-time employees

A part-time worker works fewer contracted hours than a full-time employee. However, they generally also hold permanent positions, and the number of hours they’re scheduled to work per week should be clearly visible within the contract, but they may have the option to work overtime, if and when desired. Benefits of part-time employment include a more flexible schedule for the employee, allowing individuals to fit their work around other commitments, and the opportunity for people to try out new roles without having to give up vast amounts of your time. Most waiters and waitresses are an example of part-time employees.

Fixed-term employees

Fixed-term employees last for a specific amount of time, which has been set and agreed in advance. In some instances, fixed-term employees may not have an exact time-frame, but will instead end when a specific task has been completed or fulfilled. Depending on the role, and an individual’s performance, fixed-term contacts can sometimes lead to longer term positions. Examples include students on industrial attachment and drivers for a specific event such as weddings.

Temporary employees

Similar to fixed-term, temporary employees are offered a contract that is not expected to become permanent. Usually they would have some form of end date included, however, these may be subject to change. As such, temporary workers may have their contracts extended in line with demand and availability. Temporary teachers are a common example in Zimbabwe.

Agency employees

Agency staff have their contracts agreed and managed by a recruitment consultancy or employment agency. They usually work on a temporary basis, and the length of their contract will depend on demand from the employer, as well as their availability. The Valcol Group company offers such services majoring in I.T experts and secretaries.

 

Freelancers and contractors

When working with freelancers or contracted basis, contracts may vary from position to position. However, individuals working in this way are generally considered self-employed. Contracts may include start and end dates, or the salary may be based on set projects or pieces of work, meaning the contract effectively ends upon delivery. Freelance and contract workers may also not be entitled to the same rights as more permanent members of staff, although they do get to manage their own schedule, and negotiate their own terms. Most graphic designers are freelancers.

 

Zero hour employees

Also known as casual employees, zero hour employees specify that an employee works only when required by their employer. The employer is under no obligation to provide a set amount of hours to work. And, similarly, the employee does not have to accept any work that is offered to them. Individuals on a zero hour contract may also seek employment elsewhere. In fact, their contract would not be valid if it prevented them from looking for, or accepting, work from another employer.

Marketing plan

Marketing plan

A marketing plan is a document that outlines the business marketing and advertising efforts for the upcoming specified period. This will ensure that your company’s money is spent sensibly and that you reach all of the proper target audiences

A marketing plan should always include

  • Marketing Vision
  • Your Ideal Customer
  • Remarkable Difference (How are you different from your competitors?)
  • Marketing Strategy
  • Value Proposition
  • Marketing Materials
  • Lead Generation Plan (motivating your target market to have interest for your product)
  • Lead Conversion Plan (effectively turning new seller leads into buyers)
  • Customer Service Experience (monitoring your customer support services)
  • Marketing Calendar
  • Sales Forecast
  • Marketing Budget
  • Marketing Training

Budget (startup costs)

Budget (startup costs)

It is an estimation of the startup costs which are those expenses incurred before the business is running. It ensures that you will always have enough money for the things you need and the things that are important to you. Following a budget or spending plan will also keep you out of debt or help you work your way out of debt if you are currently in debt.

Ask yourself these questions

  • How much can be sold in Year 1?
  • How much will sales grow in the following years?
  • How will the products and/or services you are selling be priced?
  • How much will it cost to produce your product? How much inventory will you need?
  • What will your operating expenses be?
  • How many employees will you need? How much will you pay them? How much will you pay yourself? What benefits will you offer? What will your payroll and unemployment taxes be?
  • What will the income tax rate be?
  • What will your facilities needs be? How much will it cost you in rent or debt service for these facilities?
  • What furniture and equipment will be needed to start the business? How much will it cost? Will there be additional equipment needs in subsequent years?
  • What payment terms will you offer customers if you sell on credit? What payment terms will your suppliers give you?
  • How much will you need to borrow?
  • What will the collateral be? What will the interest rate be?

Do you need a business coach to help you with the planning stage?

Our friendly business consultants can help you come up with a plan for your business.