Business 101: do you have a good business plan? (Part 1)


Entrepreneurs are some of the bravest people there are – traversing challenging landscapes to introduce new ideas and start their own businesses. Here’s how to make sure you have what it takes to do it right the first time.


A recent view of the state of entrepreneurship in South Africa showed that 70% of start-ups fail within the first 18 months of operating. This indicates that start-ups and entrepreneurs face many risks and challenges that can stunt business growth before they’ve even started.

To grow their business, start-ups need to consider business plan guidelines as well as the operational and legal pitfalls that may cross their paths.

Advice for business owners: having a clear business plan

Discovery Insure CEO Anton Ossip says a good business plan asks the following fundamental questions:

  • Do you have the right product?
  • Is there a market for this product?
  • How will you distribute the product?
  • How does this product differ from competing products?
  • Do you have the rights skills to run your business?
  • What does your revenue and operating model look like?

When drawing up or reviewing a business plan, business owners should also include specific details of their financial plan (with possible hidden costs and forecasts) and their marketing plan. Some of the sources that businesses can turn to for help include the internet, industry experts, other competitors and industry publications.
“It is also important for businesses to tailor their existing plan according to who it is that needs the information,” Ossip says. For example, if an entrepreneur needs to show a business plan to a bank to procure start-up or additional funding, they should ask the bank what information they need to include in the plan.

Businesses also have to consider and plan for operational and legal pitfalls that can disrupt their work and stunt their growth.

Operational pitfalls plaguing SMEs

Ossip says small and medium enterprises face a number of operational risks, for example:

  • The loss of key services such as electricity
  • Failure in IT services
  • Loss of employees
  • Supply chain disruption, and
  • Damage to property.

“You need to have a contingency plan for all of these occurrences so that your business operations are not disturbed,” he says. This means doing thorough research and finding the right business insurance to meet your needs.

“Cash flow is probably one of the biggest risks that most SMEs face,” Ossip explains. “Even the smallest interruption to cash flow can have devastating consequences.” He advises businesses to manage debtors properly and to ensure that they have access to credit when they need it.

Legal pitfalls that could topple your business

Ossip’s advice to SMEs is to consult a professional legal expert during all phases of your business, from starting the business or drawing up a business plan to preparing for expansion.

The costs of a lawsuit due to not meeting all legal or financial requirements could topple SMEs, so it’s best to be aware of the common legal issues that businesses face at every stage. Some of the legal pitfalls that business face include:

  • Not having the right contracts of employment,
  • Not being protected against debtors,
  • Not protecting your company’s intellectual property, and
  • Not protecting your customers’ data.

In any of these cases, the cost of legal action could be disastrous for a small business.

“We have considered these aspects and, at Discovery Business Insurance, we have a network of partners that provide services to help owners of small businesses to respond to these requirements. For example, we automatically give all our clients cover for legal support to help them manage possible legal issues. Clients get access to online services managed by Origin Systems that provide legal support, including drafting services for various different contracts such as employment, acknowledgement of debt and non-disclosure agreements”, says Ossip.

“We’ve also partnered with experts at AVeS Cyber Security to offer businesses cyber protection packages to protect their computers against cyber-attacks, and so protect their customers’ data,” says Ossip.

Your insurer is a valued partner in your business and additional services you qualify for can save your business money. When reviewing your business plan, make sure to address all the aspects that could make or break your good business idea.

About business insurance from Discovery

We understand that different businesses have different needs. That's why we give you comprehensive, yet flexible, insurance cover that is tailored to your business and considers the business risks you face in a modern, fast-paced world. You'll get business insurance that is driven by technology and built on a model that shares value for managing your business well. Through our partnership with Endeavor South Africa you'll have access to a diagnostic tool that will help you identify key areas of development so that you can grow your business. In addition, you will get access to service providers, at a preferential rate, who can help your business develop in the right direction. To find out more, speak to your broker or contact us and we will help you.

Discovery Insure's Impact Alert sends help when you need it most

Wish you had the technology to call for help when you most need it? Discovery Insure's Impact Alert feature can detect when you've been in an accident. If we can't get hold of you immediately, we'll send emergency assistance to your location, while our Vehicle panic button can be used to alert emergency services when you're in your car and need help.

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