Financial Tips | Debt Management

Cashspeak! Financial Tips | Debt Management
Custom Search

10/31/06

BUSINESS PLAN FORMATION PART 2

After your ES, there are two different places you can take your plan. If you are pitching an idea, concept, or something intangible, then your next section should be your Marketing Plan. However, if you are pitching a product, clothing line, or something tangible, then your next section should be your Product Presentation. (NOTE: You can get creative with your section titles, but I caution you not to stray too far from the norm. For example, instead of “Marketing Plan,” you can title your section “Marketing Campaign,” “Customer Marketing,” etc...)

I will discuss the Marketing Plan first. The Marketing Plan is the section of your business plan that discusses how you are going to make the public aware of your idea/concept/product in order to accomplish your objective. Your objective can be whatever you want, as long as it pertains to the Marketing Plan. For example, if you are pitching a restaurant idea, your objective may be to achieve 100% occupancy every night with a 3.5 time turnover rate. Once you have defined your objective, you can then formulate a plan to accomplish that objective.

As you write the Marketing Plan section, be aware that financial figures are not needed for this section. The Marketing Plan is just discussion on what you plan to do to create sales, revenue, and money! For example, let’s say you are pitching a clothing line. Your idea may be “time-frame” orientated, meaning that you plan is broken down by dates. So, you might write something like:

This plan will be broken down into a three year effort to raise both local and national awareness of X clothing line. During the first year, X clothing line will be introduced to the public through BRAND Y store. At first, X clothing line will only be in 5 BRAND Y stores to test the public response. Throughout the year, approximately every two months, X clothing line will be introduced into 5 more BRAND Y stores. By the end of year one, X clothing line will be available for sale in 35 BRAND Y stores. During year two, X clothing line will continue its expansion. BRAND W and BRAND Z stores will be the next targets of X clothing line. However, because X clothing line will have already been introduced to the public, year two expansion will be far more aggressive. Instead of starting in only five stores, X clothing line will be introduced into 15 stores each of BRAND W and BRAND Z. 15 new stores will be added at the same rate of approximately 15 stores every two months for the rest of the year....

You get the idea. Make your plan easy to read and easy to follow, but make it creative and feasible enough to be attainable. For example, do not state that you are going to expand to different stores without having reached such an agreement with the stores you plan to expand in. Instead, you may want to start small with a Marketing Plan that incorporates the internet, direct marketing, and print media advertising. Remember, you do not have to worry about putting actual financial figures in this section, so be creative with you plan. However, also remember that the cost of marketing will be incorporated in your plan later on, so do not go crazy with you advertising/marketing ideas.

I will now discuss the Product Presentation section. For people who want to pitch an actual, tangible product, this section is necessary. Please note that a Marketing Plan is still necessary for you people that have a tangible product to pitch. The only difference is that the Product Presentation section is also needed in addition to the Marketing Plan. Getting back to the point, like I stated before, your ES should be something dramatic that captures the attention of the investor and therefore, little is said about your product. The Product Presentation section is where you get to lay it all out. Just as the title of this section suggests, this section is where you present your product to your investor. Writing styles vary, so I will not try to tell you how to write this section, but just make sure that this section includes:

1. What the product is. You would be very surprised how many times people describe their product without specifically stating what it is. Make sure you write, “This product is a _____.”;

2. The description of your product, including size, dimensions, weight, etc...(if applicable); and
3. Materials used in making your product. This does not mean that you state that you used a sewing machine to make your clothing line. This means that you say that your clothing is made of cotton, rayon, nylon, etc., and that you point out specific “quality points,” such as hand stitching or expensive fabrics.

At the end of this section, the investor should know what the product is and everything relevant about the product. Some people add pictures to this section. I feel that this is okay, but if I were an investor, I would much rather have an actual prototype in my hands to explore. Once again, this comes down to a matter of style, so I leave that decision up to you.


Look for more to come in the next installment when I discuss the Market Analysis section...

ss_blog_claim=d4b8d84b7cd435a046138bf77aefb499