Posted by Hansie Britz on 21 January 2019

IMPORTANCE OF TAM,SAM & SOM IN YOUR BUSINESS PLAN

                         

A common but very important item missing from most business plans is a breakdown of the business/company’s TAM, SAM & SOM in the marketing section of their plan. Wondering what these acronyms means? Well, you’re not alone – many entrepreneurs are not familiar with these terms.

Here’s a quick explanation of what they mean:

TAM 

Your “Total Available or Addressable Market” – everyone you wish to reach with your product.

SAM 

Your “Segmented Addressable Market or Served Available Market” – the portion of TAM you will target.

SOM 

Your “Share of the Market” – the subset of your SAM that you will realistically reach – particularly in the first few years of your business – this is your target market.

Identifying your TAM, SAM, and SOM requires some market research – levels of research vary depending on your product and market potential – but once you gather the research through your market analysis, you’ll have a better idea of the percentages that coincide with each area. Identifying your SOM, or your target market, is an important step because building a marketing plan around your TAM – in other words, everyone, is a huge waste of resources. Figuring out who exactly you think will actually buy your product or use your services will help you focus.

SOME EXAMPLES

You’re starting a concierge service in your city that focuses on doing tasks/running errands for busy people, and people who need additional assistance (the elderly, individuals who are handicapped, and so on).

Your TAM (total available market) would be all busy people, elderly, and handicapped people in your city. If your town has 150 000 people, you may find (through market research) that total possible demand for business in your city is 15% – or 22,500 people.If you have a competitor in your market, your TAM would be smaller, since you will be sharing the market with another company.

Your SAM (segmented addressable market) would be the portion of that 22,500 whom your current business model is targeting – this will be outlined in your business plan. For example, your business model is being set up to service 7,500 people a year who are ages 35 – 55, with small children and disposable income who live or work within a 2km radius of downtown, this means your SAM would be 33% of your TAM (or 5% of your total city’s population).

Your SOM (share of the market) would be the portion of your SAM that your business model can currently realistically serve. For example, you may only have three employees (yourself and two others), so realistically what percentage of your SAM (7500) can you reach in the first 2 to 3 years? Let’s assume your company can effectively provide concierge services to 100 people a month or 1200 a year. This means your SOM is about 16% of your SAM – or around 5 percent of your TAM, or a little under 1% of your total city’s population.

If you’re seeking funding, savvy investors will ask you for these items in your business plan, and they’ll want you to be able to back up your numbers. This is why conducting some market research up front is important – and even advisable before you begin writing your business plan. It gives you the validation of your market potential.

IF YOU NEED HELP IN ANY OF THESE AREAS OR WITH A PROFESSIONAL BUSINESS PLAN OR MARKETING PLAN CONTACT US NOW AT – money@global.co.za or 084 583 3143

                                       

 

Posted by Hansie Britz on 13 January 2019

STARTING A BUSINESS? – HOW TO GET FUNDING

                                           

 

BUSINESS PLANS 

Your business plan is an essential piece of the funding puzzle, explaining exactly how much money you need, where it’s going to, and how you will pay it back as well as how long it is going to take for you to earn it back.

Investors will first look for a summary or investors pitch; and if you get through that screening, they’ll want to see a business plan for the process of due diligence. Everyone you talk to is going to expect you to have a business plan available.

WHERE TO FIND FUNDING 

The process of finding the money you looking for should match the needs of your company or business. When you look for money will depend a lot on your business or company and the kind of money you need.There is a big difference between a high- growth internet – related company looking for venture funding and a local retail store looking to finance a second location or a new startup business.

TYPES OF FUNDING AVAILABLE 

1. Venture Capital 

Venture Capital is frequently misunderstood. Many start up companies complain about venture capital companies for failing to invest in new ventures or risky ventures. This is not the case. The people we call venture capitalists are business people who are trusted with investing other people’s money. They have a professional responsibility to reduce risk as much as possible. They should not take more risk than is absolutely necessary to produce the risk/return ratios that the sources of their capital risk of them.

Venture Capital professionals look for businesses that they believe could produce a huge increase in business value within just a few years. They know that most high-risk ventures fail, so the winners have to win big enough to pay for all the losers.

2. Angel Investment 

Although angel investment is a lot like venture capital, there are important distinctions. First, angel investors are groups or individuals who invest their own money. Second, angel investors tend to invest in companies at earlier stages of growth, while venture capital typically waits until after a few years of growth, after startups have more history. Like venture capitalists, angel investors normally focus on high-growth companies at early stages of development. Don’t think of them for funding established , stable, low-growth businesses.

3. Commercial Lenders

Banks are even less likely than venture capitalists to invest in, or loan money to, start up businesses. They are, however, the most likely source of financing for established small businesses. A business that has been around for a few years generates enough stability and assets to serve as collateral. Banks commonly make loans to small businesses backed by the company’s inventory or accounts receivable. Normally there are formulas that determine how much can be loaned, depending on how much is in inventory and in accounts receivable.

A great deal of small business funding is accomplished through bank loans based on the business owners personal collateral such as home ownership.

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4. Other Lenders 

Aside from standard bank loans, an established small business can also turn to accounts receivable specialists to borrow against its accounts receivable. The most common accounts receivable financing is used to support cash flow when working capital is hung up in accounts receivable.

Another related business practice is called “factoring”. So-called factors actually purchase obligations, so if a customer owes you R100 000 you can sell the related paperwork to the factor for some percentage of the total amount.

Various other private investors or government lenders are also available for small business funding, each one with their own criteria and documentation required.

5. Friends/ Family Funding 

f your parents, siblings, good friends, cousins, and in-laws will invest in your business, they have paid you an enormous compliment. In that case, make sure you understand how easily this money can be lost, and that you make them understand this as well. Although you don’t want to rule out starting your business with investments from friends and family, don’t ignore some of the disadvantages. Go into this relationships with your eyes wide open.

Maybe, your idea and your situation is a better fit for “crowdfunding” – that is, creating a profile and pitching your business idea or product on a site like “Kick starter”. In fact, this method of raising money has become so popular that there are dozens of crowdfunding sites to choose from, all offering different terms and benefits.

IF YOU NEED HELP IN ANY OF THE ABOVE AREAS OR WITH A WELL – STRUCTURED, BANKABLE BUSINESS PLAN CONTACT US NOW AT – 084 583 3143 OR money@global.co.za AND GET A PROFESSIONAL SERVICE

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Posted by Hansie Britz on 11 January 2019

HOW TO START A NURSERY OR COTTAGE SCHOOL

            

Nursery schools provide preschool education services for children aged 3-5 years, combined with day care. Most businesses in the nursery school industry are private but may get funding from a variety of sources, including state grants.

Getting affordable, quality child care, especially for children under the age of 5, is a major concern for many parents, particularly in recent years with the rise in families with two working parents. As the need for child day care has increased, the child day care services industry began to fill the need for non-relative child care.

CHOOSING THE RIGHT LOCATION

If you are going to open your business on a commercial site, it should either be close to where parents work or where they live. This could be in a residential neighborhood near a school , a concentration of office parks or sharing a facility with another community organization.

OPERATING FROM YOUR HOME

There are may role-players that must be consulted if you decide to operate your business from home. First and foremost will be your own family who will have a business operating around them and possible encroaching on their space. The neighbors will also have to be consulted about the potential noise and extra traffic. Its important to explain how you will keep the inconvenience and disruptions to a minimum. You may also have to find out from your local municipality whether your home needs to be zoned for business rights or special concessions.

RULES & REGULATIONS

If you are going to accommodate six or more children , you have to register your business with your local municipality, who follows the rules set out by the Department of Social Development.

Your application must contain the following:

Your particulars – identity number, address and telephone numbers.

The physical and postal address of the operation.

The number of children that will be accommodated.

Your qualifications, skills and experience.

A description of the programs and services to be offered, including the aims and objectives.

You must also submit:

1. A business plan containing:

– the business hours of the facility;

– the fee structure;

– the day-care plan;

– the staff composition; and

– the disciplinary policy.

2. The constitution containing the:

– name of the care facility;

– composition, powers and duties of the management.

3. An original copy of the approved building plans.

4. An emergency plan.

5. A tax clearance certificate.

6. A health certificate from the municipality.

OTHER REQUIREMENTS

A safe playground that meets the requirements of your municipality.

Insurance – At the very least, you should have public liability insurance, accident and equipment liability insurance.

Compliance – Once you are set-up, the local authority will come assess the premises and the playground.

To serve food you will need a Certificate of Compliance for Food Preparation.

                     

STARTING AND RUNNING A COTTAGE SCHOOL.

Unlike home schooling, a cottage school is where a group of children gathers at a venue and receives education together from one or more teachers. Contrary to popular belief, these are not the same as home schools. “Cottage Schooling” – often called “cooperative schooling” – is an alternative form of education in which children are taught by one or more teachers at a location outside the home for a limited time during the week. Cottage schools can be started by a group of parents or by a teacher.

If you are considering a cottage school but are unsure where to begin, here are some tips to help you get started:

1. Figure out all the legalities – just as public school curriculum vary from state to state, so too do the rules about cottage schools;

2. Decide on an approach.;

3. Tap into your school community;

4. Be patient.

CONTACT US NOW IF YOU NEED HELP IN THIS AREA OR WITH A PROFESSIONAL BANKABLE BUSINESS PLAN – 084 583 3143 OR EMAIL: money@global.co.za

                           

 

Posted by Hansie Britz on 5 January 2019

USING DRONE TECHNOLOGY IN AGRICULTURE

                        

Agriculture is one of the fastest growing markets in the commercial drone industry today. Technology is changing at a radical and continuous rate in agriculture as much as in any sector. Drones  are quickly becoming an indispensable tool to help farmers become more efficient in the field, and make more informed crop management decisions.

In the South African agriculture sector, drones are not yet as fully utilized as in other countries like Argentina, Brazil, Colombia, USA, Spain and Russia. In these countries, drones are used mainly in crop farming, although the opportunities for use on livestock, wine, fruit, vegetables and solar farms are endless.

Today’s drone solutions let farmers detect crop health issues in real time, accurately assess losses after a major weather event, and even generate variable rate prescriptions that can save some serious cash buy limiting labor and resources.

Drones present vast opportunities when it comes to the irrigation side of agriculture, allowing for irrigation systems to be accurately planned and monitored. If a standard camera and infrared camera combination is used, leakages and faulty applications can quickly be identified and corrected. It is also easy to determine and adjust optimum irrigation time by monitoring the temperature of the plants.

                         

Drones have a number of uses on livestock farms. Specific software is available that can identify and count animals. Drones with infrared cameras can give an indication of animal health by monitoring animals temperature and timeously informing the producer of any changes in health status.

Various companies market drones for security purposes. The drones are installed outside the house and are controlled from inside. In this way, a farmer can easily inspect the yard/property without having to leave the house if suspicious behavior is observed.

Drones also have another interesting use: to inspect solar panels for dead or damaged cells. The difference in temperature is immediately noticeable if an infrared camera is used and the necessary attention can be given quickly to the specific panel.

In the world of agriculture, timing is everything. Diseases and invasive species spread fast, but in the days – and in some cases weeks – it takes to schedule and process imagery taken from a manned aircraft or satellite, what begin as a small problem can spread to something much larger.

Drones, on the other hand, give you a high-resolution map of your field in a matter of minutes. Powerful plant health tools, allow you to visualize issues and make decisions on the spot. No more guesswork or costly waiting periods. Just actionable data on plant health and crop stress in real time.

NEED TO KNOW MORE OR NEED HELP WITH A PROFESSIONAL FARM BUSINESS PLAN? – CONTACT US NOW AT: (27) 84 583 3143 or Email: money@global.co.za FOR PROFESSIONAL ASSISTANCE AND SUPPORT.

         

Posted by Hansie Britz on 24 December 2018

HOW TO CHOOSE THE RIGHT INVESTOR

              

How can you find investors who have passion for your business and what you and your products/services are about? This is one of the keys to taking on investors who will support you with much needed growth capital, as well as (and often more importantly) all kinds of other support.

There are many types of investors, each with their own unique requirements. These requirements include things like how much risk they are willing to take, what form of repayment they are willing to accept, and what sort of qualifications your business needs to meet before they will consider your application.

Also, be aware that when you seek funding, you may not be able to find the entire amount in one place. You may prefer to spread out your investment between several investors. Some investors cannot handle the total amount, and some investors prefer not to be your sole source of funds.

For your business to succeed, you need to know where you’re going and how you’ll get there. Creating a business plan enables you to set goals, determine the resources you will need to carry out your plan, and foresee problems that might otherwise broadside you. Therefore, even if you do not need funding you will still need a well-structured business plan. People write business plans for a number of reasons. Perhaps the one most important, but usually left unstated, is to be taken seriously. Whatever the ultimate purpose of your business plan, if your business is not taken seriously, you won’t achieve your purpose.

The most common stated reason for writing a business plan is to obtain funding.Funding, of course, is money that someone loans, invests in, or gives you because they believe you are going to be successful, and they want to share in that success. If you thought that funding only comes from banks, well, that is but one of probably several hundred sources of funding.

If you want to empower your people to do more and make good decisions, a business plan can serve as a comprehensive instruction manual enabling everyone working with you to know what’s going on and to take appropriate steps to further the action in the right direction.

WHAT ARE INVESTORS LOOKING FOR IN A BUSINESS PLAN?

Don’t expect every person you will send your business plan to, to read it thoroughly. In fact, you really can only count on them to skim it. Investors know what they’re looking for in a business plan – they want to see a business that will grow rapidly and someday return a handsome profit.

Keep in mind that investors rarely put money into a “product” – they invest in a business. Many great products have floundered because the investors did not understand how to get people to buy them. So be sure to show that you understand how to market your product or service. Ad build a company around your invention(s).

Some investors go straight to the description of the management team – they want to see if anyone involved with the company has had experience with successful start-ups, and has relevant experience in the industry. Others may go to the financials section to see when and how you plan to attain long-term profitability.

DO YOU NEED MORE INFORMATION OR ANY HELP WITH A PROFESSIONAL WELL-STRUCTURED BUSINESS PLAN CONTACT US NOW – www.money@global.co.za or call us (27) 84 583 3143.

ALSO SEE OUR MAIN PAGE – BOTTOM – FOR SOME TESTIMONIALS OF SATISFIED AND HAPPY CUSTOMERS.

                                

 

 

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