How to Write Your Business Plan: The Complete Series (2 of 3)
Welcome back to the Brixx ‘writing a business plan’ guide. We’re about to start Part 2 so be sure to check out Part 1 if you missed it.
So far in your business plan, you’ve demonstrated that you’ve thoroughly researched the market and your competition. You’ve also explained the unique aspects of your product or service that your customers will value and that will help you to break into the market. Make sure you go back over those sections to ensure it’s convincing, well explained and backed up at every step. You’re off to a great start though.
What topics we’ve covered so far:
- Section 1: Executive Summary
- Section 2: Products and Services
- Section 3: Market Research
- Section 4: Competitor Analysis
- Section 5: Objectives
What will you learn in Part 2?
- Section 6: Pricing Strategy
- What will your pricing be, and why?
- Section 7: Marketing & Sales Plan
- How will you market your products or services?
- What is involved in the sales process, from start to finish?
- Section 8: Operations Plan
- What does your business need in order to run?
- Who are your team and what are their skills?
These three sections are all about how we are going to go about executing our plan. What do we actually need to do to launch, run and grow our business? What methods are we going to use to achieve all the exciting goals we’ve outlined so far? It’s time to write about the practical side of your plan. Let’s get to it.
Section 6: Pricing strategy
Here you want to further outline your business model, listing the price points for your products and how you came to that decision. You should be referencing your earlier market research to justify your decisions. Explain where your pricing sits compared to your competitors and whether you are targeting the premium or economy end of the market. Are you matching your competitors or undercutting? What motivated that decision? There are a number of methods for deciding your price point and again you should outline which method you chose and why.
Finally, you should explain your profit margin on each of your products. This is how much money you make from each sale after the direct cost of that sale has been taken off. You’ll need to briefly talk about the financials to show that your chosen price point will provide enough profit to cover your operating costs.
Section 7: Marketing & Sales plan
You could have the most fantastic product in the world but if you don’t have a plan for getting it in front of peoples’ noses (and the right noses too!), you won’t get anywhere. Take your marketing strategy seriously and if you don’t have the skills to properly execute it, you’ll need to explore outsourcing options.
You need to write an overview of each of the marketing activities you plan and how effective each of them should be for your growth. Outline the first 12 months of your marketing in detail and ensure you show the timing of different marketing activities.
You should describe how you’ll physically execute the plan. Marketing is a time-consuming exercise and can involve a lot of content creation (especially if you are trying to promote a website). Who is going to do all the work? You’ll have to identify if there is work you’ll need to outsource and how much that could cost.
- Digital marketing – SEO strategy, content marketing, Google Ads campaigns (PPC/Pay-Per-Click), social media engagement.
- Offline marketing, newspaper, magazine, banner, leafleting, networking and other promotional activities. Outline the cost of each of these activities and which target markets you aim to appeal to with them.
The Sales Plan
A sales plan describes how you complete sales and how your relationship with your customers proceeds from there. It should include every interaction between the business and the customer. Your marketing plan is only half the battle. If your marketing is effective, it’ll bring customers into your shop or onto your website. Now they are here, how do you convince them to buy from you? Here you really need to leverage your knowledge of your target audience and their buying habits.
Again, there are also practical considerations to go through. Will you have a sales team, or is your product/service self-serve? How are customer enquiries handled? How will sales physically happen? Online purchases, door to door sales, telesales, or in-store purchases?
Further questions are raised after a purchase has been made. Will you follow up the sale with further offers or regularly stay in touch in some other way? Is there an ongoing relationship with the customer that follows the initial sale? Are any steps taken to nurture the customer relationship? There is cross-over with your marketing plan here but overall you need to ensure you are painting the complete picture of bringing a customer to your doorstep, nurturing the relationship and convincing them to buy. If you can clearly show this it will be easier to convince investors you’ll actually be able to grow your sales.
Section 8: Operations Plan
Here we are explaining how the business is going to run and operate day to day. You need to cover the less exciting (but just as essential) obligations you have as a business owner, such as taking out the right insurance, managing your staff and meeting legal requirements.
You don’t need to write at length but you do want to be upfront about the significant requirements involved in setting up your chosen business so that nothing comes out of the blue to derail your launch or scare off investors. This is especially true if they have large monetary or legal ramifications. You should have a complete and detailed operations plan in a separate document since there is a huge amount you’ll need to consider when setting up a business.
For now, highlighting the main points demonstrates to investors that you have clearly thought through the practical side of taking on a business and not just the aspirational ‘take over the world with this amazing idea’ side.
A good start is to break your activities down into these areas:
- Production processes
- Delivery methods/logistics
- Payment methods
- Legal obligations
- Permits & certificates
- Staff and management
- Sales processes
For more help check out the operations blogs we wrote during week 7
Part 2: Summary
The focus of this blog has been completing the second part of your business plan. By now you should have completed:
- Section 6: Pricing strategy – your business model, listing the price points for your products and how you came to that decision.
- Section 7: Marketing & sales plan – written an overview of each of the marketing activities you plan and how effective each of them should be for your growth.
- Section 8: Operations plan – the obligations you have as a business owner, such as taking out the right insurance, managing your staff and meeting legal requirements
In the next part, (Week 13) we’ll look at the two remaining parts of your business plan:
- Section 9: Financial Plan (it’s a big one)
- Section 10: Appendix
This blog post forms part of our series on how to start a business in 90 days. For an overview of the series and all the blog posts so far click here.