Naledi Threads Business Plan — Trigger Points and Management Response
The specific thresholds at which the owner must act, and what each response is — stated in advance rather than improvised.
Trigger Points and Management Response
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- Overview & contents
- i. Important Notice and Basis of Preparation
- 1. Executive Summary
- 2. The Business
- 3. Market Analysis
- 4. Location Strategy
- 5. Products and Merchandise Strategy
- 6. SWOT and Competitive Position
- 7. Marketing and Sales
- 8. Operations
- 9. People, Compliance and Controls
- 10. Implementation Plan
- 11. Financial Plan
- 12. Break-Even
- 13. Working Capital and Debt Service
- 14. Returns
- 15. Sensitivity and Scenarios
- 16. Risk Management
- 17. Trigger Points and Management Response
- 18. Key Performance Indicators
- 19. Key Assumptions
- 20. Conclusion
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Capital and Pre-Opening Schedules
- C. Appendix C: Funding and Debt Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Glossary
The trigger points below convert the risks in Section 16 into decisions with dates attached. Each is measured monthly from the management accounts, and each carries a pre-agreed response so that the decision is taken on the evidence rather than in the moment.
|
Trigger |
Measured |
Response |
|---|---|---|
|
Trading density below R28 000 per m² annualised |
Month 6 |
Range and window review within two weeks. The position is wrong, not the price — do not discount to buy traffic |
|
Gross margin below 46% on completed months |
Month 6 onward |
Full markdown audit. Enforce the week-six rule on every style; suspend all reorders outside the top decile |
|
Creditor days below 26 |
Month 9 |
Escalate supplier terms negotiation. Every four days missed deepens the cash trough by roughly R11 700 |
|
Cash below R100 000 at any month end |
Continuous |
Draw the standby overdraft immediately. Do not fund the gap by reducing the November stock buy |
|
Shrinkage above 1.5% in any month |
Monthly |
Immediate full stock count; review fitting-room control and tag compliance before concluding it is theft |
|
EBITDA after owner remuneration negative at Month 18 |
Month 18 |
The Year 2 case does not hold. Defer the Year 3 hire, defer owner remuneration increases, and approach the lender before a covenant breach |
|
Debt service cover below 1.15x |
Quarterly from Year 2 |
Approach the lender with a proposal before the breach, not after. A restructured amortisation is available to a borrower who asks early |
|
Equity below R250 000 |
Continuous |
Stop. Take advice on whether to trade on, restructure or close. Trading a store into insolvency destroys more value than closing it |