WRITING AN EFFECTIVE BUSINESS PLAN
- PART 4
In previous articles we
discussed the following sections of your business plan:
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
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
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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