Part 4 of 15 · Writing every section
Part 4: Marketing, Sales, Business Model, Operations and Technology
This is where plans separate into two piles. One pile explains how revenue will be produced, unit by unit, rand by rand. The other pile contains the word ‘marketing’ and a social media budget. Only the first pile gets funded.
A funder reading this half of the plan is testing one thing: does this person understand how their own business actually makes money, or have they only imagined it?
Chapter 21Marketing Strategy
Purpose and what funders expect
The marketing section must convert your market analysis into a costed, measurable plan to acquire customers. The output funders look for is a customer acquisition cost that reconciles to the marketing line in your income statement.
The only marketing arithmetic that matters
Customer Acquisition Cost (CAC)
= Total sales & marketing spend / New customers acquired
Customer Lifetime Value (LTV)
= Average gross profit per customer per month
x Average retention in months
Health test: LTV / CAC >= 3.0x
Payback test: CAC / monthly gross profit <= 12 months
WORKED EXAMPLE (B2B cleaning contract)
Monthly marketing spend R 18,000
Sales salary + commission (allocated) R 22,000
Total monthly acquisition spend R 40,000
New contracts won per month 2.5
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CAC R 16,000
Average contract gross profit per month R 4,640
Average contract life (months) 28
LTV R 129,920
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LTV / CAC 8.1x PASS
Payback period 3.4 months PASS
If you cannot produce this calculation, you do not yet have a marketing strategy — you have a marketing wish. Estimate it from your pilot, your competitors’ known spend, or industry benchmarks, and state the basis.
Channel selection for the South African market
| Channel | Best for | Typical CAC profile | Watch out for |
|---|---|---|---|
| Direct sales / tenders | B2B, government, corporates | High CAC, high LTV | Long cycles — 6–18 months to first revenue |
| Referral and word of mouth | Services, trades, professional | Lowest CAC | Unscalable alone; cannot be forecast reliably |
| WhatsApp Business + community groups | Township retail, services, food | Very low CAC | Labour intensive; needs process to scale |
| Google Search / Performance Max | High-intent purchases | Medium | Competitive keywords in finance/legal are expensive |
| Meta (Facebook/Instagram) | Consumer, local, visual | Low-medium | Creative fatigue; attribution is unreliable |
| Trade shows and industry bodies | Manufacturing, agriculture, mining supply | High but concentrated | Cost per lead only justifies for large-ticket sales |
| ESD and corporate supplier portals | B2B suppliers to large corporates | Low cash cost, high time cost | Registration is not a pipeline; you must still sell |
| Radio (community and regional) | Regional consumer, FMCG | Medium | Hard to measure; demand a promo-code mechanism |
Chapter 22Sales Strategy
Marketing creates awareness; sales converts it. This section must describe a repeatable process, not the founder’s personal charisma.
What a funder wants to see in a sales section
- 1The pipeline stages, named and defined — e.g. lead, qualified, site visit, quoted, negotiated, signed.
- 2Conversion rates between stages, from your own history or a stated benchmark. If 100 leads produce 4 contracts, say so.
- 3Sales cycle length in days, because it drives your working capital and your revenue ramp.
- 4Who sells, what they cost, what they are targeted on, and how they are incentivised.
- 5The current pipeline, named and valued — the most persuasive item in the entire section.
| Prospect | Value p.a. | Stage | Probability | Weighted | Expected start |
|---|---|---|---|---|---|
| Netcare facility (Benoni) | R2,376,000 | Quoted | 50% | R1,188,000 | Oct 2026 |
| Municipal depot contract | R1,140,000 | Tender submitted | 25% | R285,000 | Jan 2027 |
| Retail park (3 sites) | R864,000 | Site visit done | 40% | R345,600 | Nov 2026 |
| Existing client expansion | R432,000 | Verbal agreement | 80% | R345,600 | Sep 2026 |
| Total | R4,812,000 | — | — | R2,164,200 | — |
Chapter 23Business Model
The business model section answers: how does value convert into cash, and when? The distinction between a good and a poor model is usually timing, not margin.
| Model | Cash characteristics | Funder view |
|---|---|---|
| Cash-on-delivery retail / food | Cash in before or at delivery; stock funded upfront | Attractive — short cycle; focus shifts to stock funding and shrinkage |
| Contract services (monthly) | Recurring, invoiced in arrears at 30–60 days | Highly bankable if contracts are long and clients are creditworthy |
| Project / contracting | Lumpy, milestone-based, retention held | Working capital heavy; requires contract finance or guarantees |
| Wholesale / distribution | Stock-heavy, thin margins, volume-driven | Financeable against stock and debtors; margin discipline is everything |
| Subscription / SaaS | Recurring, prepaid, negative cash at acquisition | Equity territory unless MRR is proven; banks struggle with it |
| Manufacturing | Long conversion cycle, capex intensive | Asset finance plus working capital; DFI and dtic incentive territory |
| Marketplace / commission | Cash-positive if you hold float | Needs scale and network effects; VC territory |
Chapter 24Operations Plan
Operations is where credit analysts hunt for the practical holes: the licence you don’t have, the site you haven’t secured, the supplier who hasn’t quoted, the electricity you can’t get. Be exhaustive and be honest about status.
| Component | What to state | Evidence to attach |
|---|---|---|
| Location and premises | Address, size, zoning, lease term, escalation, renewal option | Signed lease or offer to lease; zoning certificate |
| Facilities and layout | Floor plan, capacity, expansion headroom | Layout drawing; capacity calculation |
| Plant and equipment | Item, specification, supplier, cost, lead time, condition | Three dated quotes per major item |
| Utilities | Electricity supply and capacity (kVA), water, backup power, connectivity | Municipal supply confirmation; generator/solar spec and cost |
| Supply chain | Key inputs, suppliers, terms, alternatives, import exposure | Supplier agreements or quotes; pricing history |
| Production/service process | Step-by-step flow, cycle time, throughput, quality control | Process map; SOP index |
| Licensing and compliance | Every permit required, current status, cost, renewal date | Copies of certificates; application receipts |
| Capacity vs. forecast | Maximum output at current setup vs. year-3 forecast volume | Explicit reconciliation table |
Energy planning is now a standard section
South African funders expect an explicit energy plan for any operation with production, cold chain or trading hours. State your load profile in kW, your grid tariff and escalation assumption, your backup solution and its cost per kWh, and the revenue at risk per hour of outage. For energy-intensive businesses, a solar or hybrid case with a payback calculation strengthens the plan considerably — and may open green finance lines discussed in Part 8.
Chapter 25Technology Plan
Even a non-technology business needs a short technology section, because systems determine whether the business can scale without the owner. Keep it to one or two pages unless technology is the product.
- Core systems: accounting (Xero, Sage, QuickBooks), POS, payroll, CRM, inventory — named, with monthly cost
- Data and reporting: what management information is produced, how often, and who reviews it
- Payments and cash control: card acquiring, EFT, mobile payments, cash handling controls
- Compliance: POPIA obligations if you hold personal data — information officer registered, consent basis, retention policy
- Cybersecurity and continuity: backups, access control, insurance
- Automation roadmap: what you will automate as volume grows, and the cost saved
Part 4 quality control
- CAC and LTV are calculated, stated, and consistent with the marketing budget in the model
- Two channels are properly resourced rather than seven under-resourced
- Sales conversion rates and cycle length are stated with a basis
- The weighted pipeline reconciles to year-one revenue, or the gap is explained
- Cash conversion cycle is stated in days
- Every major equipment item has three dated quotes attached
- Capacity at full utilisation exceeds year-three forecast volume, or the expansion capex is in the model
- Every licence required is listed with its current status, not just its name
