When you're making a business plan for your new family-owned or small business, you need to explain to your potential investors - whether they're family members, friends or banks - a key ingredient to the business' success. Namely, how exactly are you going to advertise and distribute your goods and services.
Your marketing plan - your strategy for getting your product out to the public - should include strategies and blueprints for:
- Marketing your product. This includes things like who will buy your product, how it will be packaged and how you'll let the public know about you and the product, and
- Sales and distribution of the product. Here you'll explain how much your product costs and how your going to sell it
Some of the information you need here is contained in your market analysis, such as what exactly you're company's selling, why customers want to buy it, and who your target market is. Your marketing strategies, though, need to include much more, such as:
- Price. How much are you charging customers for the product, are you selling it at a reasonable profit, and is your price higher, lower or the same as your competition?
- Packaging, or appearance of the product. Does it come in a box or a bag? What color? Does it grab a customer's attention, and will he remember it?
- Do you have anything else to sell with or in addition to the product, like extra parts or accessories? Do you plan to expand with more products in the future?
- Advertising and promotions. How are you going to let the public know about you and your company? Newspaper, television or online ads? Direct mailing?
Sales and Distribution
These are the keys to getting customers to buy your product. This part of the marketing plan should explain:
- How your goods are getting to your customers. Can they order online, or is there a mail-order catalog? If so you need a plan for shipping, such as the US Postal Service
- Do customers buy directly from your store? Then you may need sales staff or employees. You need sales representatives if you're taking your product to the customers. Another option is to sell your goods to merchants or retailers who do the actual sales to the public
- How much are delivery costs, and do they eat into your profits?
- What types of payment do you accept? Cash, credit and personal checks? What's the turn around time from the dates of shipment and delivery to the time you're paid?
- How much inventory do you need to make sure you don't lose sales because you're out-of-stock or on "backorder?"
- Closely related to advertising and pricing, you need to know how to deal with your competition and bargain shoppers. Will you offer a "guaranteed low price" or offer to match any competitor's price?
- How do you stand behind your product? Do you give buyers a warranty? What's your return policy if there's something wrong with the product or the customer doesn't like it?
Why It's Important
You may have the greatest, newest idea or product to sell. But if you can't get your customers to buy it, the business will fail.
That's why this part of your business plan is important. It does two things. First, if you're like many entrepreneurs, you need some financing to get the business up and running. Except for perhaps loving family and loyal friends, no one wants to invest in something that can't or won't succeed. The marketing plan shows how you plan to succeed. If done properly, it convinces investors you're a good investment.
Second, the marketing plan gives you path to follow to success, and a way of measuring progress. Once you're business is running, don't forget about this part of the plan. Take it off the shelf and read over it once a month, or at least once a quarter. Put your monthly sales and other reports in there so you can see which parts of the plan are working and which aren't.
Whether it's a corporation or a sole proprietorship, you'd have a hard time finding a successful business that doesn't have and follow a marketing plan. It is, quite simply, the plan for making the business go.
Questions For Your Attorney
- Are there any legal problems to worry about if I offer a "low price guarantee" to my customers?
- Is there anyway I can prevent my employees and staff from sharing my business plan if they leave my business for another job?
- If I show my business plan to banks and other lenders, they can't share my information and strategies with other entrepreneurs, can they?