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Define Strategies, Service & Product Line – How to Write a Business Plan: Part 4 of 8
MARKETING & SALES MANAGEMENT
Without marketing your business and your product/service, customers have no way of knowing that you’re out there. While the information regarding the organization of your business is important to investors, knowing your marketing plans is equally as important, since the marketing you do will generate revenue.
You need to define your marketing strategy. Granted, your marketing strategy will often change, as you evaluate its effectiveness and changes in your business require changes in your advertising. But you do need to have a basic strategy in mind, which includes the following elements:
1. Market Penetration
In order to obtain customers, you have to make yourself known in the market. While you need advertising to do this, you also need to have a means. In other words, you need to continually develop new products and innovations to keep the customers interested. Market penetration requires using new products in existing markets and new markets using existing products. Explain in your business plan how you intend to penetrate the market.
2. Business Growth
The basis of any good marketing strategy is to grow your business. What ways do you plan to make your business grow right now and over the next few years? Will you buy another business? Do you want to spread your business over a larger area by franchising?
Identify the channels of distribution that you will use for your product. Some possibilities are the original manufacturers, an internal sales force, distributors and retailers. Explain which your business will use and why it more beneficial to your potential customers than the other options.
And finally, and most important to your marketing strategy, explain how you’re going to advertise your business to the public. The obvious choices are television, radio, newspaper and magazine ads, as well as fliers, billboards and signs. If you already have printed marketing materials, include them in your Appendix.
But don’t limit yourself. You’re business can also get involved in the community through charitable events and organizations. And each individual involved in your business has the opportunity to advertise the business through their daily activities. Explain how each of the strategies you plan to use will help to get the word out.
Marketing is essential, but it can’t be done without the sales portion of your business. The deal has to be closed somehow. First describe your sales force — will you have internal or independent sales representatives. Identify how many sales people you will have, how you will obtain and train them, and how much they will be paid (commission or salary, etc.). Also, show what each salespersons’ sales quota will be for a given amount of time and what strategies will be taken if that quota is not met (i.e. retrain, let go, etc.).
Also, explain how the sale will be carried out. For example, if you intend to have your sales force make cold calls, your sales activities would be as follows:
• Make a list of potential prospects and prioritize
• Calculate the average number of sales calls it takes to make a sale
• Calculate the average dollar amount made per sale and per vendor
• Calculate how many sales calls should be made over a certain period of time to come out on top
SERVICE OR PRODUCT LINE
For this portion of your Business Plan, describe the service or product your business provides and what needs it resolves for customers. The following information needs to be included:
1. A detailed description of your product/service, which should be from the customer’s perspective, including specific benefits and how it meets the customer’s needs.
2. The “life cycle” of your product (where it was and where it’s heading) and its present stage of development (i.e. idea, prototype, patent pending, etc.).
3. Information regarding your product/service that may be copyrighted, trademarked or patented and any legal agreements with other individuals or businesses.
4. Research and development activities for your product/service that your business is, or will be, involved in.
We’re half way through this massive store of information for developing your Business Plan. Hang in there! I will start off next week’s posts by covering the Funding Request and Financial Information sections of a Business Plan.
Business Plan – Part 1: Overview
Business Plan – Part 2: The Market Analysis
Business Plan – Part 3: Define Organizational Structure & Management
Business Plan – Part 4: Define Strategies, Service & Product Line
Business Plan – Part 5: Funding Request & Financial Information
Business Plan – Part 6: Executive Summary, Table of Contents and Appendix
Business Plan – Part 7: Common Business Plan Mistakes
Business Plan – Part 8: Obtaining a Business Loan
Related Small Business Buzz Posts:
Knowing Your Customers
Overview – How to Write a Business Plan : Part 1 of 8
Market Analysis – How to Write a Business Plan : Part 2 of 8
Starting Your Own Business, Part 4 of 4
Investigate the Competition