6 Simple Answers Your Business Plan Should Provide

As I finish the editing on my upcoming book – How to Successfully Startup a Small Bakery Business, I cannot help but realize the importance of planning before starting any business venture. Here in Kenya, there is a particularly disturbing belief or perhaps I should say a kind of ignorance on the importance of a business plan. As I meet startup entrepreneurs and train individuals on starting up small bakery businesses; I continue to stress the importance of a business plan – even a basic one just to get you started.
Now you might wonder why I stress this point and I’ve decided to share it in a different way today. I want to give you six questions that your basic business plan can and should have answers to regarding your small startup. These answers will provide clarity and direction to your business as you start and continue growing. As I always point out, your business plan will change as your business grows and adapts; however, it’s important to have a basic plan as you start. You can then go changing it and adapting it to any business model or market changes you encounter as you progress.

It's very important!

It’s very important!

What?
The first question your basic business plan should answer is ‘what is your business?’ This is the part where you write your business name and the products and/or services it offers. Today I will use an example of a service business start-up that provides food delivery services. The ‘what’ of this business would be: Fresh Delivery Services provides food delivery services to its clients in Nairobi County.

What are you selling?

What are you selling?

Why?
The second question your plan answers is ‘Why your business offers the products and/or services?’ This is a very important question for your business since it should highlight what sets your business apart from any other businesses in that industry. To give an example of the ‘why’ using Fresh Delivery Services.
We realized that most delivery or errand service companies in the market offer delivery for many items but not for food. Those that do are not always effective or careful with the food contents and do not ensure customer satisfaction. Our errand services are targeted to only food and baked goods deliveries and we are well-equipped to assist in packaging, transporting and effective delivery of those goods.
Who?
Another important aspect of your business is who you’re selling to; your target customers. It is very important to know the types of customers you want to sell to in order to ensure the products and/or services are well suited to their needs as well as your marketing strategy. An example:
We offer our delivery services to home-based bakeries and catering businesses who deliver their food and baked products to their clients. We also make deliveries for restaurants and bakery shops who offer home or office delivery options to their clients as well.

Who is your target customer?

Who is your target customer?

Where?
Your basic business plan should state the location of your business as well as the location of your target customers who you are serving. This applies for both types of businesses who have brick and mortar locations such as shops, stores or warehouses. As well as any home-based businesses who deliver to their target customers. As we stated above, an example of our featured business is:
Fresh Delivery Services provides food delivery services to its clients anywhere in the Nairobi County area.
When?
This refers to the daily operations of your startup business. State the time schedules for both your in-house operational hours for employees; as well as for your clients’ delivery times.
Fresh Delivery Services is open from Monday to Saturday. Delivery hours are from 7 a.m. to 5 p.m. We are closed on Sundays.
Employee hours are as follows: Monday to Saturday 6.30 a.m. to 6 p.m. Closed on Sundays.
How?
Your business plan should state how you will sell products and/or services and how you will execute your daily operations. For your daily operations; it is important to have a simple system setup on daily tasks to be completed by your employees and yourself as well. You can create a basic operations manual based on the nature of your business. You should also have a marketing plan section in your business plan that describes the various marketing activities you will execute to attract your customers and therefore lead to sales for your business.
I hope these simple questions will help you while writing your basic business plan and answering them while doing so ^_^!
If you would like to get a free Basic Business Plan template, click on this link to get one.
Any questions on writing a basic business plan for your small business startup? Stuck on a specific section in your basic business plan writing? Feel free to ask below.
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3 Signs You Need To Change Your Business Model

I hope your New Years was great, mine most definitely was. I have been reviewing my business plan and model to see if I needed to change it for this new year. I feel that this has been a long time coming due to certain results in business actions that I took and therefore; I decided to sit down and see how to make necessary changes.

I’m sure as a start-up entrepreneur or even if you are a seasoned entrepreneur, you’ve made certain changes in your business model over time. This happens especially if you realize that you’re not getting desired results in your business or for other reasons. Today I want to share three signs that show you need to change your business model for the better in this new year.

1. Your sales have reduced drastically

If you realize that your sales have reduced a lot and you’re still doing the same things you’ve been doing in your business then you have to change your business model. You may be trying very hard to market to the same customers and you still don’t get higher sales; if anything, they continue dropping. This is a very big sign that you need to change the direction of your business (like big flashing red light kind of sign ^_^). If you can’t sell, then your business can’t survive. Find a way to change your business for the better.

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If your sales keep going down – something’s gotta change

2. Your market industry has changed

Customers sometimes change their preferences and tastes; what used to be a trending product or service stops being popular. As an entrepreneur, you have to continually observe these trends in your industry and your business may have to adjust as they change. As a start-up entrepreneur, you may notice these changes late and that may affect your business. Start-up entrepreneurs have to learn to keep their ear to the ground when market trends shift or change so as not to get left out and start losing out in sales. This means you have to keep getting feedback from your customers, keep reading about your industry and any new changes or trends. Always stay informed and keep in touch with your customers by taking surveys and ensuring they are satisfied; as well as improving your products or services to suite their ever-changing needs.

Markets change often - keep an eye out

Markets change often – keep an eye out

3. You, as an entrepreneur, have changed

As an individual sometimes changes can occur in your life that change you in different ways. This can happen due to certain situations, environments or even changes within you as a person. These changes can affect you in a positive or a negative way. If you’re a start-up entrepreneur; if these changes affect you negatively, it can affect your start-up business negatively. This can manifest in different ways such as neglecting your employees or customers; which would result in lower productivity and sales. It’s best if you feel that you’ve changed as an entrepreneur; make the changes work for you in a positive way – even if it means changing your business model. This is especially necessary if your priorities have changed and they don’t go hand in hand with what your business is doing.

Image Credit: essentiallifeskills.net

Image Credit: essentiallifeskills.net

If you are experiencing any of the signs above or even all of them (yup, this can all happen at the same time ^_^), make sure you sit down and have a serious review of your current business model/plan and see what you have to change. Make changes that are necessary and positive to you and your business in the long run.

Have you ever had to change your business model as an entrepreneur? How did it go? Please feel free to share below.

If you found this post helpful, please share it with your network. Sharing is caring ^_^

Interview with Pauline Twala of Affordable Eats, Kisumu

I’ve recently been meeting great people and also connecting with amazing people online. I’ve decided to start a segment where I’ll be sharing some interviews with inspiring entrepreneurs who have built a successful business or are in the process of doing so. I will have them share their insight on what they do and a bit of entrepreneurial advice for all of us start up entrepreneurs out there.

Pauline Twala of Affordable Eats

Pauline Twala of Affordable Eats

I recently connected online with an amazing lady (we bakers gravitate towards each other ^_^) called Pauline Twala; she’s the owner of Affordable Eats – Kisumu’s Boutique Catering. Affordable Eats is a catering business that serves events as well as a bakery that makes cakes for occasions and weddings. Pauline is also a baking instructor who teaches students how to bake and decorate amazing cake creations in Kisumu. Pauline is not originally a pastry chef or culinary artist; she has a background of political science and public administration. She is however a self-taught baker and cake decorator who followed her passion and started her own business about two years ago in Kisumu. To learn more about her story, please click on this link.

Pauline in the Daily Nation - she's the next big thing!

Pauline in the Daily Nation – she’s the next big thing!

Here is our online interview; very insightful responses.

1.) Why did you start a business? Why in this industry?

My passion for baking and cooking developed when I was very young. I remember I was a member of the cooking club back when I was in St.Georges’ Primary School – Nairobi at the age of 9 and I’d always go back home to try out recipes we had learnt. Then life took over I did a degree in Political Science and Public Administration at Moi University. I have worked as a market researcher and an office administrator with a number of organizations but I just couldn’t settle and felt so unfulfilled. After my contract ended with Italian Embassy – development co-operation in December 2011, I thought it was about time I change careers and do something that I enjoyed doing.Initially when I started in 2012, my main focus was outside catering but the demand for catering services tends to fluctuate primarily because catering services reach peak demand for special occasions i.e. wedding and end year corporate parties. I later added the cake section in the same year in response to market demands and after a lot of research. You don’t need an occasion to celebrate cake and it was the best decision I made. I have fallen in love more with cakes as I really love the creative elements of cake designing.

 2.) What’s your niche in your business? What problem do you solve?

A niche is basically “find a hole and fill it” So the hole I fill is creating a cake that tells a story as well as push limits with cake and create things that look so real that someone may have to ask “is that cake”

3.) How do you market your business? Is it effective?

I figured early online the importance of having an online presence and took a DIY approach to build my website as well as a Facebook page to grow the business and drive customer growth and this has greatly opened doors for us not only with clients but with media coverage as well.

 4.) What is your motivation? How do you get inspired?

Cakes make people smile. I get delighted when I make others excited with unbelievable cakes and it keeps me motivated to get better at what am doing.

5.) Favorite inspirational quote?

My favourite quote and one that I also live by is “Never give up” This quote has kept me going. I am where I am right now because I believe in my dreams and I am inspired to make them a reality. God has blessed me with a talent so I will be acting ungrateful if I didn’t use it. So sometimes when things get hard and I want to stop, I remind myself that He would not have given it to me if I could not bear it so “never give up”

6.) What is your morning routine? When do you wake up?

Every day is different and since I’m a “night owl” my mornings do not all begin at the same time. However currently am in between routines, trying to come up with something I could fit in an hour or less that still has all the elements that nourish me on the physical, mental and emotional level.

7.) How do you de-stress? Relieve business stress?

In no apparent order: I take deep breaths, take a walk, listen to my favourite music and sing it out loud, laugh out loud, watch a movie, call a friend or family to vent out if need be

8.) Top 3 favorite websites? and why?

I bookmark any site that has great decorating advice and tutorials as well as forums to connect with others to talk about baking and decorating

9.) Any advice for any youth who have started a business in Kenya & facing challenges?

I would just say this – if you have the desire and inspiration and eagerness then do it and never despair the rest will happen along the way. There are many people out there who will tell you that you can’t. What you’ve got to do is turn around and say ‘Watch me.’”  It is also so important that you have fun and treat it as a joyful experience. Also make sure you have a good support system around you, whether it be a spouse, family or friends.

10.) Your current favorite song?

I have loved still love and will always love “so close I believe” by Hillsong this song is so inspirational and will get me into tears just being amazed at God’s faithfulness.

11.) What’s the best part of your business? Worst/Annoying part?

My highlights: Firstly it’s finding myself through this journey of cakes. Now I can’t imagine my life without Affordable Eats. I live it, talk about it and most times bake and decorate cakes in my dreams. Secondly without a doubt, seeing the smiles on my client’s face, the feeling of satisfaction and accomplishment. When they take the time to write feedback and say thank you for the inspiration or for a great cake. That for me is the most rewarding feeling. The same applies to my students whom I teach cake baking and decorating it’s so nice to see a student’s face when they realize they can and giving them skills at a shot at making it a career…Lastly I have made so many virtual friends through Affordable Eats although I’ve never met them in real life, I do consider them friends, bound by a common interest. It’s Amazing the kind of support I have received from fellow “cakers”! Who knew cake could do that?!

For challenges: Firstly there’s no universal cake language – you can refrigerate fondant covered cake/you cannot refrigerate fondant covered cake, fondant should be used up immediately it’s made/fondant should rest at least 8 hours or overnight before use, you should use straws to dowel/only use wooden dowels………….it’s a long list of this is the way/that is not the way. Secondly the time investment can be pretty tough and I mean REALLY TOUGH. Most of the cakes take 20 to 30 hours each.  I’ve had some that took more than 50 hours and all this in between meeting clients, making deliveries, book keeping, social media marketing and advertising, answering calls and emails, classes etc. It’s physically demanding. Cake decorators are really a special breed – to make cakes we can stay up until wee hours of the morning and then still manage to function during the day, as if we were sleeping well all night long.

12.) Who are your key influences/ role models?

You can learn so many things from so many people around you but my favourite role model has to be my late mother. No word can encompass her but she was simply the best

13.) Five words that describe you?

Determined, Fighter,Spontaneous,Generous,Reliable

14.) How do you deal with financial crisis in your business? or any other crisis?

By taking actions that will cut on spending as much as possible and focusing on increasing cash flow or generating more income and saving that income even if it means extra hours.

Amazing cake by Affordable Eats.

Amazing cake by Affordable Eats.

Great interview! Amazing Kenyan female entrepreneur to watch out for, I wish her all the best!

Make sure you check out her business website as well as her Facebook page for Affordable Eats – Kisumu’s Boutique Catering. If you’re in Kisumu please order some cake for any occasion as well as catering services ^_^

5 Important Lessons Learned At The AITEC Mobile Money Conference

About a month ago, I discovered a gold mine of information from a business blog; the best thing about this blog was that it was a Kenyan blog. Now it’s not that I didn’t exactly know about this site, I’ve heard of it and seen some links online about it – but I had never really checked it out. I’m always on the look out for information I can always share about business start-ups these days, so I decided to really see what information the site offers. I meant to spend about five minutes on the blog but I ended up reading different blog posts for almost an hour! The content was just amazing and insightful – both the blog posts and the videos. Which site you wonder? Kuza Biashara blog.

Fast forwarding to my main point; I was able to win VIP tickets to the AITEC Mobile Money conference from them and it was a very unbelievable opportunity that I am very grateful to have had thanks to the great team at Kuza Biashara. I met them and they are awesome! (yup – that’s the best word that can describe this team of amazing individuals that work there.) Their founder and chief mentor Mr. Sriram Bharatam is an amazing individual as well as a great speaker and listener. Mr. Karthi Raj, the vice president is easy to talk to and very engaging; it was an honor to meet them.

With the Kuza Biashara team at AITEC

With the Kuza Biashara team at AITEC

The theme of AITEC mobile money conference held at the Kenya School of Monetary Studies in Kenya this year was – ‘Finance SMEs and fire up the economy’. AITEC is the region’s leading banking forum and this is its eighth year in existence. Now you may wonder what a small business owner such as myself would benefit from attending such a conference; however, it was an invaluable experience that led to a lot of great insight on my part. I can honestly say that true to Kuza Biashara’s motto; I learned, connected and will grow after attending the conference. I want to share five very important lessons I learned at the conference and I hope it will give you insight into your business start-up as well.

1. Small businesses should start using mobile money payment platforms for their businesses if they don’t already
A major point of discussion in the conference was the adaptation and success of mobile money in Kenya. Banks in the region have realized the potential of the mobile money platform in the region and have started using the platform to offer more solutions for their customers. They are also continuing to discover ways in which they can start serving SMEs better using the same platforms in the near future. A very interesting way that one particular company, G-analytix based in Zimbabwe, is using mobile money usage & other small business analytics input to benefit small business owners is by creating a ratings programme or if you may – credit history. The point that Mr. Alan Goodrich the company’s MD was making, is to be able to build a credit history that can be used in lending money to small business owners based on their mobile money history and other small business operations inputs.
A perfect example of a company that is putting the mobile money credit history usage to great use is Kopo Kopo Inc who created the ‘Lipa na MPESA’ platform used by businesses in Kenya.

Lipa Na Mpesa by KopoKopo

Lipa Na Mpesa by KopoKopo

It’s a great platform especially for small business owners like myself; I can say that with great confidence since my bakery uses it to receive payments. Kopo Kopo has now introduced Grow, which is an alternative lending option for their already existing customers. They use the mobile money history in the business account to determine the amount of money they can lend to the business. Another great feature of their payment system is that they recently added a feature where an account holder can make payments to other accounts – bank or MPESA lines. This is a great feature because it gives a small business owner the convenience of being able to pay an employee or vendor directly from their Kopo Kopo account. This in time will build a history of business transactions in and out of the business – which is literally a more detailed credit history of the business.

Kopo Kopo is making mobile payment easy for SMEs

Kopo Kopo is making mobile payment easy for SMEs

Bottom line: If your small business does not already have a mobile money payment system; you need to get one right away. Not only is it convenient for your customers; but very useful to your business as well and possibly for future bank lending purposes.
2. You should have a strong and solid social media strategy in place for your business
An interesting point that was made in the conference by Mr. Amarnath Chowdary, CEO of ModeFinServer, India; was that social media banking is the next big thing after mobile money. Most banks have recognized the fact that a very high percentage of their customers are constantly on social media. Banks therefore want to provide even more convenience by tapping into social media just like most businesses have done and start providing banking services to their customers. I believe that this integration of banking into social media will benefit businesses as well; therefore, businesses should ensure they are also on social media. If your business has a strong social media presence; it will make it easy to benefit from the social media banking experience and in turn your customers as well. This may turn out to be another payment platform for businesses to take advantage of.

Ensure you have a great social media strategy

Ensure you have a great social media strategy

Bottom line: Make sure your small business has an effective social media strategy in place so that when banking hits the social media platform; you’re ready to integrate it into your payment systems efficiently.
3. Market research is very important for your small business
At the conference, Ms. Debbie Watkins – MD Africa and Asia Regions of Fern Software; shared her experience of doing market research in different parts of the world on how small business owners run their daily financial operations. Banks in the past believed that small business payment operations are simple; however, due to the nature of a small business, it has been discovered that their operations are even more complex than believed. As banks research the habits of small business owners even more, they discover that in order to survive; business owners have to apply complex strategies due to their limited financial resources. This kind of discovery through market research should apply to every small business out there. No matter how simple; small businesses should always conduct market research in their specific industries in order to find out what their customers really need and serve them better.
Bottom line: If you’re not constantly researching what your customer needs to better understand them and innovating your products & services to suite them; someone else will start solving their problems and you will lose your customers.
4. Small business start-ups don’t always need funding, they need capacity building.
A point that was made by Mr. Habil Olaka, CEO of the Kenya Bankers’ Association was that start-ups don’t always need debt finance which banks offer. Start-ups may actually be in need of capacity building instead of financing. They may also be in need of a different kind of funding instead of bank loans; funding such as angel or venture capital funding. It is necessary to point out that Kenya does not have a lot of options when it comes to angel or venture capital investors; most of the ones available are not even Kenyan-based but foreign investors.

Kuza Biashara help SMEs be the best they can be

Kuza Biashara help SMEs be the best they can be

Bottom line: If your start-up is constantly having cash flow issues and you keep looking for different ways to get funding; you may not necessarily require debt financing since your small business may not be able to handle it. It may be a lack of information and a need for resources that will help you to run your small business better.
5. Small business owners in Kenya need to use capacity building resources available such as Kuza Biashara in order to learn.
In reference to the point made above; start-ups don’t always require funding, sometimes they need capacity building. This is true of a lot of small business owners in Kenya, including myself. Like the founder of Kuza Biashara, Mr. Sriram Bharatam, says: “A lot of small business owners don’t know what they don’t know.” That was true for me especially last year as my business went through a challenging time. I realized that I required knowledge in order to deal with the challenges the business was facing and not necessarily funding; since that was not really solving my problems. I have been learning since and have gained a lot of insight on how to focus and run my small business better through the methods that I have learned. I am continuously finding more resources that help me learn and grow as a business owner and Kuza Biashara is one of those resources that I believe will help in that journey.
Bottom line: If you are a small business owner in Kenya, you need to make sure you tap into the resources that Kuza Biashara offers and you will learn, connect and grow as an entrepreneur.

It was a privilege to be able to attend the AITEC mobile money conference and it was a great to meet the Kuza Biashara team; they should keep up the great work they are doing.

Keep learning, work hard and most importantly work smart.

7 Reasons Why Small Businesses Fail Within The First Year

We hear many statistics about small businesses often, especially about their failure rate within the first three years. Those statistics have become very personal to me due to the fact that my small business struggled a lot last year and almost closed. I have also encountered at least three young entrepreneurs that I know, who have closed their businesses over the last year – and their businesses were less than a year old. Today I want to focus on seven main reasons why small businesses fail within the first year. I believe that knowing the reason why, will help small business owners avoid most of these pitfalls and keep their small businesses going, and it time, successful.Business closed sign

1.Underestimating capital requirements

A lot of small business start-ups don’t think that having a business plan is necessary, however; it’s imperative to write one, especially when starting your small business. A business plan not only helps you put down your business idea on paper and how it will be executed; it also helps you know the capital requirements required to start and run your business for at least six months. Some start-up owners get so excited about starting their small business that they don’t sit down to write the actual required cost of starting their business. They tend to find out when it’s too late and the business is failing already. Make sure you have a business plan for your small business if you don’t already have one or if you want to start your business.

Budget for your start-up accurately

Budget for your start-up accurately

2. Poor business store location

This is one reason I can testify to personally; especially when it comes to researching whether a specific location will match the products or services that you offer. It can be a great high traffic area, but your business may not do well because you do not offer what the customers in that area want or require. It’s necessary to always do product and market research in the area you want to start your business to see if your business has a fighting chance. If it does not, don’t start your business in that location; no matter how good the shop or area looks. Just be patient and keep looking for a better location for your business.

3. Poor Management of Business

This is a major cause of small business closure in Kenya; a small business owner may be very motivated and have qualities of an entrepreneur; however, you also need to have management skills to run your business as well. The day to day operations of a small business require knowledge on how to manage different aspects of your business e.g. cash flow management, how to hire employees, how to choose vendors, etc. It’s necessary for small business owners to either acquire basic management skills or to either partner or hire a  person who has the management skills required. This might not seem necessary to a start-up owner at the beginning; but trust me, it’s very necessary for your business to stay open in the long run. A great website for resources on running your small business is Kuza Biashara, they have blog posts and ‘How-To’ videos that assist small business owners in Kenya.

4. Lack of Creativity and Innovation

Whatever product or service your business offers, make sure you’re always innovating it. Every successful company has gotten there because they are constantly being creative and innovating in their business. A great example of innovation and creativity is a Kenyan company that manufactures energy saving jikos – Cookswell. They originally just sold jikos and charcoal ovens; but in time, they added barbeques to their product list. They then started creating barbeques in animal shapes such as boars or ostriches. This kind of creativity and innovation keeps your customers coming back and loyal to your brand since they’re curious as to what you will do next.

The Cookswell Animal BBQs - Great creativity & innovation!

The Cookswell Animal BBQs – Great creativity & innovation!

5. Poor Control of Expenditure

This is another major reason for small business closure, especially in Kenya. A small business could be bringing in revenue but if the owner does not have control over the expenditure of the business cash; the business could close in time. A major problem for the small businesses is also the mixing up of personal and business finances. It’s good to ensure that as a small business owner you separate your personal finances from your business finances. It’s also necessary for a small business owner to ensure that they are tracking all their business expenditures by keeping all the necessary accounting records necessary.

6. Theft, Fraud, Fire and Natural Disasters

Unfortunately for a small business other factors that may be beyond your control can lead to the closure of your business. The best way to avoid such factors or at least to survive them is by getting small business insurance. Insurance can cover you when either theft, fraud, fire and natural disaster strikes. Make sure you understand your small business insurance policy very well, get the insurance agent to explain to you what it really covers and what it doesn’t to avoid any misunderstanding. Small business owners tend to think that they don’t need insurance since they have small business; however, since there are things you cannot have control over; it’s better to be prepared instead.

Theft can occur in your small busines (Image: uca.org)

Theft can occur in your small business (Image: uca.org)

7. Poor or no marketing plan

This may seem obvious but I have noticed some small business owners seem to ignore this aspect of their business. Marketing is an activity that never stops as long as your business is open – I mean, look at Coca Cola, they have never stopped marketing and they are such a large international company. Marketing is what brings in sales into your small business; therefore, you should always ensure you have a marketing plan in place. Other small businesses also have a marketing plan, but it’s either very weak or not effective. In this day and age of social media and online search; you need to make sure that your business’ presence is felt. It is a very competitive business market out there in any industry and your competitor is probably still marketing to your target market whether you are or not.

Baking Class Poster - Never stop marketing your biz

Baking Class Poster – Never stop marketing your biz

I hope this seven points have helped you, as a small business owner, realize where your problem points could be and avoid business closure or failure in the future. If you have any other points you would like to share that can also cause business failure; please feel free to comment below.

If you like this post and found it helpful, please share it to your social networks below so you can help someone else. Sharing is caring ^_^