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WRITING AN EFFECTIVE BUSINESS PLAN - PART 4

by: Cary Christian

 

In previous articles we discussed the following sections of your business plan:

Executive Summary
Business Description
Industry Analysis
Market Analysis

We're going to finish up this series on writing an effective business plan between this week and next. This week we discuss your products and services and your specific plans for marketing them.

PRODUCTS AND SERVICES

This section appears to be fairly straightforward at first glance. You are going to provide a write-up on the products and services you offer, in detail. But you should also provide information about any significant advantages you have with respect to each product or service.

Do you have exclusive distribution rights to your service area? If not, how many other distributors of your products are there in your target market? If you sell a product that thousands of other resell in your area it is not going to be as impressive. Look for other factors that might provide advantages. For example, are you the largest distributor and does this distinction put you in a different pricing category that allows you to beat your competition?

If you manufacture your own product you will need to provide some product comparison information. How do your products stack up against the industry leaders you will have identified in your "Industry Analysis" section? What sets your products apart? Are you aiming at a well-defined niche market that nobody else seems to care about? If so, what makes your product appeal to this niche market?

You will also want to address why customers need your products and the demand for them. Do you sell brands that are highly regarded in the market and effectively sell themselves? Do you have market information that backs up your claims? How do customers typically use your products? Do they buy them once and then they're out of the market or are they consumables that the customer must buy several times per year?

Be creative in describing your products and services. Resist the urge to simply provide canned descriptions of what you sell. Make the reader of your business plan get excited about your products and the sales potential for them.


MARKETING AND SALES STRATEGY

Readers of your business plan are going to be very interested in this section, particularly if you are a new enterprise. You can have the greatest products on earth, but if you do not know how to market them properly, you will fail. Venture capitalists, in particular, will probably know a lot about what it takes to sell your products, so you want to impress them by not only showing your knowledge of all the "normal" channels but by presenting several unique ideas for making sales.

You will need to perform a lot of research for this section. You'll need to know how other companies market products that are similar to yours and how well each type of advertising works for these products. You should be able to find this information in trade journals that deal with your industry. Use this information as the basis for your basic marketing infrastructure and then analyze ways you can create your own unique angles.

Just as important as advertising sources is your sales methodology. Many companies forget about this and concentrate solely on advertising and marketing. Sales is a process, not a one-time event. Marketing and advertising need to feed your sales process to be most effective. Your sales process is also the area where you can set yourself apart from your competitors most easily. You can nail down the particulars of your sales methodology by answering the questions in the following paragraphs.

What happens when a potential customer requests more information by mail, by telephone, through your website, or by email? Who handles the request? How quickly does your sales infrastructure respond? What types of materials do you supply? What type of system do you have set up to follow up with these potential customers? Do you have a methodology in place that allows you to continue contacting potential customers without upsetting them? Does the process result in the customer being added to your mailing list by his or her own request?

Are all methods of communication from your customer integrated? In other words, if a customer calls for information and then later requests information from your website, do you have a methodology in place to know these two requests came from the same customer?

Describe your sales methodology in great detail. If you find holes in your existing methodology as a result of this exercise, resolve to fix them and incorporate that into your business plan. It is perfectly okay to tell the reader what you are GOING to do as well as what you are already doing. No business is perfect. He or she will respect and like the idea that you are finding new ways to do things and are committed to putting them into action. If you are attempting to raise money with your business plan, include money for this type of upgrade in your use of funds section. Most venture capitalists and bankers will think it is money well spent.


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