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Preparing a Business and Marketing Plan
T his guide is designed to help you put together a comprehensive,
strategic and effective blueprint for your business a foundation for your
success!
Your business plan is one of your most important tools in planning for
the future of your business. It outlines your vision, what you want to
achieve and how you plan to get there. The process of putting this plan
together helps you set the course for your business preparing for
obstacles, allocating resources and planning for opportunities. Its also a
living document that should be updated as your business evolves over
time.
A good business plan, which includes an effective marketing plan, also
presents your business case to the outside world. It is a key factor in
attracting and retaining investors and is often the first document lending
organizations ask to see.
So, how do you develop an effective business and marketing plan?
You begin the process by focusing on a few key elements first,
establish your basic business goals. Then, based on sound research,
determine what challenges and opportunities your business may face.
Next, clearly identify your target markets and competition. And finally,
consider and plan all the operational and financial requirements you need
to achieve your goals.
Effective business and marketing plans are very thorough, anticipating and
answering readers questions before they are asked. Thats why
developing a good plan can help you better define your goals, ideas and
plans in your own mind before you put pen to paper.
There are many steps and details involved in fleshing out a
comprehensive and compelling business and marketing plan, so here are
some general guidelines to think about as you get started:
Involve all of your management team in the process, as well as
any legal, accounting, financial or special advisors;
Engage the best writer from your management team and
stay directly involved yourself in preparing the plan;
YOUR GUIDE TO PREPARING A BUSINESS AND
MARKETING PLAN
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Emphasize your extensive market research, your vigorous
financial analysis, and your management teams strengths;
Keep in mind that you are writing your plan for two audiences:
financial partners who will use it as a guide to investing in your
business, and you, who will use the plan as a blueprint to
launch / grow your business;
Be comprehensive, but concise, in describing your business and
its potential the plan should ideally be between 10 to 40
pages in length; and
Use the third person (not I) when writing your business plan.
YOUR GUIDE TO PREPARING A BUSINESS AND
MARKETING PLAN
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There are 9 key sections in a standard business plan:
1. Cover Page
2. Table of Contents
3. Executive Summary
4. Industry Description
5. Business Description
6. Opportunities
7. Production Plan
8. Marketing Plan
9. Financials
Cover Page
Your cover page introduces your company and your business idea. It
should include the following:
The legal name of your business;
Your business and marketing plan title, e.g. Business and
Marketing plan for Smith and Smith, Inc.;
The date your plan was prepared or modified;
Contact information of the person who prepared the plan
name, address, phone number, fax number and e-mail address;
Any necessary notices, e.g. advising that the plan is confidential,
as well as a copy number of the business plan to control
distribution;
Your business official trademark or logo; and
Your business website address.
Table of Contents
Your business and marketing plan should be clearly laid out and easy to
use, so its a good idea to include a full table of contents listing all key
sections, and number all document pages. That makes it fast and easy
for readers to access the sections they want.
Executive Summary
While the Executive Summary is the first part of any business and
marketing plan a reader sees, you may want to write it last. Leaving it
until the end will allow you to better focus, refine and polish your key
messages after youve finished the bulk of the work.
The Summary is ideally just one page long two pages maximum as
it is only intended to provide an overview. While concise, it should also
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pique the readers interest enough to read the rest of the plan with an
even keener eye. If your Executive Summary has done its job, the reader
will continue reading and get the full story of your business idea.
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Here are some areas that should be addressed in your Executive Summary:
Introduce your business what it is, what it does, how it does
it, who manages it, location, its markets and competition.
Provide a mission statement and vision statement which outline
what your goals are and where you want to be in five years.
For potential investors:
o State if the business is a sole proprietorship, partnership,
or corporation;
o Indicate the business opportunity, expected growth rate
and potential for good return on investment (details will be
in the main document);
o Declare the total financial requirements of the business,
funding sources and indicate repayment schedules
(again, details in the main document); and
o Give brief outlines of your operational and marketing plans.
Its a good idea to use strong, positive language, ending with a declarative
sentence that answers the question, Why should I invest in this
business?
Industry Description
This is where your in-depth research and understanding of your industry
will be showcased. Within the detailed description of what your industry
looks like right now, you should include the following:
The size of your industry and how many sectors it includes;
Key information on industry markets, demographics and niche areas;
Who the major players are in your industry your competition;
The suppliers and/or distributors in your industry, if applicable;
Key industry and economic trends affecting your industry;
Any social, cultural, environmental or geographical factors
that impact your industry;
What certifications (e.g. ISO), insurance and industry
regulations are required;
An outline of government regulations affecting your industry; and
The overall growth potential of your industry.
Now you can demonstrate that youve analyzed the risks and know where
your business fits in this industry. Points to include here should include:
What sector of the industry you plan to enter or expand into;
What will distinguish you from any competition in this area,
i.e. whats your competitive edge;
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Who your direct and indirect competitors are and their
anticipated reactions to your new enterprise; and
A detailed analysis of any other potential obstacles/risks.
You may also want to identify weak links and/or difficult issues, and
include any appropriate contingency plans in your industry description.
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Business Description
In this section of your business and marketing plan, you describe
your business and explain why investors and lenders should be
interested in getting involved in your business idea. Here are some
suggestions:
Briefly reiterate your business introduction from the
Executive Summary with more details about:
o Your products and/or services;
o Your facilities and assets;
o The history of why and how your business came to
be, including any milestones;
o Your success factors (what you do really well) and your
niche in the industry;
o Your sales volume (existing and projected); and
o Any innovative products, services, processes and/or
ideas being developed.
Go into detail about your management team, your staff and
key advisors, including:
o Owners and managers: who they are and what
strengths they bring to the business in terms of
experience and expertise;
o Staff: how many, what skill sets and experience
they possess;
o The positions and responsibilities of each of the above;
o Plans for training and expanding staff as your
business grows;
o Your professional advisors: lawyers, accountants,
bankers, consultants, mentors; and
o Your Board of Directors or Advisory Board (if applicable)
and what business experience they offer.
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Opportunities
This is the part of your business and marketing plan where you promote
your business concept, your vision for the future and why your
enterprise will succeed.
In a clear, concise and positive manner, base your statements on facts
and address areas of interest to potential investors, such as:
Why the market will buy your product and/or service;
How large the market is and how much you expect to capture; and
What the future prospects are for your product and/or service.
When addressing these issues, do not hesitate to use as much research
and data as possible to describe and promote your product or service,
including:
Why your targeted market wants or needs your product
and/or service;
What innovative features and compelling value your product
and/or service offers;
How your offering is better than that of your competition;
If you are selling something new, whether it is protected by
patent, copyright, or other legal means;
How your product and/or service will have longevity in
the marketplace (will it soon become obsolete); and
What your plans are for modifying or updating it in the future.
Production Plan
Regardless of which industry you are in, it is essential that you
demonstrate a thorough grasp of how to manage business operations in
a cost-effective manner. You are offering a product / service to a target
market and it takes careful planning to deliver quality on time and on
budget.
This part of your business and marketing plan should include information
about:
Facilities and assets:
o The location and size of your facility, including floor plans;
o Your facilitys capacity for materials and
equipment, percentage being used and how long
that will last;
o Whether you lease or own the facility and equipment;
o Your proximity to suppliers, if applicable;
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o The quality of your machinery and equipment (is it the
best available technology and does it meet industry
standards);
o Your access to transportation;
o Any future considerations for expansion or moving; and
o Any renovation considerations and associated costs.
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Materials and supplies:
o The number and reliability of your suppliers;
o Whether you have adequate storage facilities for materials;
o Any regulations or permits for supplies / materials; and
o Any risks associated with materials and supplies, i.e.
customs regulations, transportation concerns,
environmental issues.
Personnel:
o Your number of employees, including past, present
and future projections;
o An organizational chart showing how your staff is organized;
o The skills, training and experience required of
your employees, including the cost of training;
and
o What compensation and benefits you provide each position,
including all salaries, wages, overtime, and/or fringe
benefits.
Operations:
o The industry standards for production, e.g. ISO
requirements, environmental, health and safety
standards, etc.;
o Any relevant government regulations, e.g.
environmental safety, hazardous material handling,
insurance etc.; and
o If you are starting a new business, how long it will take
to acquire facilities, equipment and personnel before
setting up your operations and completing your first
production run.
Marketing Plan
Your marketing plan is a crucial component of the larger business plan.
Here you describe your product and/or service in detail, emphasizing its
unique or innovative features. Then you outline your strategic plan for
selling your offering within your target market.
Here is a list of elements you should look to cover in this section:
The market
Describe your potential market and your target customers.
With all forecasts, remember to include assumptions (interest
rates, economic trends, inflation, etc.) that support your
estimates.
Estimate your total potential market (i.e. your number of
potential customers and your immediate target market),
supporting these estimates with factual data.
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Define your competitive advantage and how your offering
satisfies the needs of this market.
Estimate the growth potential of your immediate market and
possible future markets, including national and international
markets.
Include your estimated market share (see sample chart, page 9).
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Competition
Identify your major competitors: who they are, where they
are located and their market share.
Identify any indirect competition.
Compare your product and/or service with that of your
major competitors, e.g. brand name, quality, image, price,
etc.
Compare your company to major competitors, e.g. reputation,
size, distribution channels, locations, etc.
Assess the degree of difficulty for your competition to enter
your target market.
Describe what you have learned from watching your competition.
Determine whether competitors sales are increasing, decreasing
or remaining steady, and why.
Technology
Describe how technology impacts your product and/or service.
Consider how new and emerging technologies will impact your
product and/or service, and when investment in new technology
may be required.
Describe how your company can adapt quickly to change.
Socio-political environment
Describe changing attitudes and trends.
Assess how flexible and responsive your firm can be.
Consider laws and regulations that may affect your business,
and what the financial impact might be.
Other
Include other situational factors that will affect your marketing
plan, such as regulatory changes, access to venture capital, trade
barriers, world economic issues.
You should also:
Define problems and opportunities:
o Identify problems or potential problems, as well as
opportunities, that affect your business idea, and state
what you will do about them.
Define objectives:
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o Outline your business objectives in precise,
measurable terms. Make sure you can quantify your
targets.
Define strategies:
o Outline how you will reach your objectives steps you
will take in planning, production and marketing to meet
your targets.
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o Ensure that you have taken into account the previously-
mentioned problems and opportunities, and have
considered potential reactions of your competitors.
Your action plan
Here is where you address the four Ps of marketing: product, price,
promotion and placement (distribution). Be prepared to explain:
Your product or services describe the quality, branding,
packaging, modification, servicing of your product and the location
of your service;
Your prices describe how you will price your product or service
so that it will be competitive, yet profitable;
Your promotion plans describe how, where, when you
will advertise and promote your offerings; and
Your placement/distribution methods describe where people will
buy your product or have access to your service. Outline your
selling methods and sales force: personal selling, mail-order,
online. Include the number of salespersons and training required,
etc.
Sales projections for the next five years (including optimistic, pessimistic
and realistic projections, as well as assumptions) should also be included.
Financials
The financial section of your business and marketing plan is all about the
numbers. Investors are looking for accurate and understandable
information that will clearly show them the bottom line.
With this in mind, you want to present your business idea as an attractive
investment opportunity, so the following are some suggestions for items
that should be listed in this section:
The total amount of required funding for your business;
Your use of funds, e.g. equipment, renovations, inventory,
working capital;
Your sources of funds, e.g. owners investment, mortgage
and/or term loans;
The projected date when lenders can expect repayment;
Any liability limits and insurance coverage necessary to
handle environmental and other risks;
Your projected return on investment;
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Economic assumptions (inflation, economic trends, interest
rates) that affect your estimates and forecasts; and
An approximate timeline for return on investment.
