Start-Up Concept Guide: Part 2

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Part 1 of the Start-Up Concept Guide covered the General Information section of the 2020 Competitions entry form including stage of start-up life cycle and type of business model of your start-up.
In the second edition of this Start-Up Concept Guide, we explore the Growth Potential & Industry Experience of a start-up. The information provided below wil help you think through your business plan, its scalability and the current status of your business.
Click on the icons below for more information.

COMPREHENSIVE BUSINESS PLAN

A written document outlining the business, what you plan to do and how – the strategy for your business. This includes company description, market analysis, company and management structure, product/service offering, marketing and sales plan, funding required and financial projections.

A business plan allows you to outline the goals for your company, how you plan to achieve them and in what time frame. It enables you to strategise comprehensively for the success of your business.

Potential investors will require this document to provide them with a better understanding of your business and assess the return on their investment (ROI).

A BUSINESS FORECAST STRATEGY

BUSINESS FORECAST:   allows investors to see that you considered the growth of your company and its viability. Additionally, they can note how or if their investment will grow based on your proposed plan, projected sales and expenses.

How will your business look in 5 years? – expenses and sales projections, business growth.

 

FORECAST  STRATEGY:   includes key elements of the business model canvas that will help you achieve your 5-year projection:

  • Distribution Channels – optimising how you reach your customers
  • Customer Relationships – how you will interact with the customer, attract and retain them
  • Key Resources – what is required to ensure the product/service is delivered efficiently and effectively.
  • Key Activities – what needs to be done to ensure you deliver according to the value proposition
  • Key Partnerships – who will help you deliver some of your business activities

What strategies are in place to reach your business forecast? Investors want to know how you’ll grow your business and their investment. What resources, activities, partnerships are needed to achieve this?

More information on Business Forecasting.

REVENUE vs TURNOVER

REVENUE

Income generated by a company through the selling of a product/service to its consumers. This is the total value of products sold by a business and is important in understanding the potential growth of the company, and profitability of the business.

TURNOVER

The annual turnover refers to the number of times the business earns revenue using the assets it has purchased or generated in the business per year. It is the income that business generates through trading goods and services i.e. number of products sold. The annual turnover takes into account the business’ costing structure (fixed and variable costs, activities that drive your cost). This differs from revenue which is just the income generated by selling products and services.

CURRENT RATIO OF OPERATION

Liquidity ratio used to measure a company’s ability to pay monthly operational costs. This enables investors to analyse how a business makes use of its current assets to cover the operational costs and any debt incurred.

More information on Current Ratio of Operation.

INTELLECTUAL PROPERTY

This is the creations of the mind: inventions, prototypes, designs, literary and artistic works. If you have a design or prototype, it is essential to consider obtaining IP protection as there may be value in having it for your business. The law protects your prototype or design and prevents others from replicating it without your permission.

  • Patent – exclusive right given for an invention
  • Design Registration – protection of shape/design of product
  • Trademark – sign that distinguishes products/services of an enterprise
  • Copyright – right given to creators over their literary and artistic work
  • Trade Secret – rights on confidential information which can be sold or licensed
We hope this information will help guide you when submitting your application for any one of the SAIS2020 Competitions. The Competitions Team is always available to help. Feel free to contact us at: competitions@innovationsummit.co.za or give us a call: +27 78 630 2589.
For more information on the 2020 Competitions, CLICK HERE.
If you missed Part 1, you can read about it HERE.

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