If you expect to have a large number of small customers, your price will remain relatively stable. However, if you plan on having a small number of very important customers, they maintain the power to dramatically impact your pricing and profitability. Threat of substitutes: how likely is it that somebody will forego your offering for a comparable substitute.
With a strong idea of where your competition is positioned and the strategic decisions they are making you will be able to determine where your own business fits in. To begin, discuss what your competition looks like. Are there many small businesses vying for the same customers or are you competing against a couple of whales?
List your most important competitors and summarize them. Discuss their location, products, pricing, market share, and any important strategic decisions they have made. Use this information to create a list of their strengths and weaknesses. SWOT Analysis is the perfect model to do just that. It is just as important, however, for your own internal needs. Completing a SWOT analysis gives you a good feel for what your strengths are, and where you can improve.
What do you do best? What do you do that the competition absolutely cannot? Are there any resources you lack? Any skillsets that are missing? In addition to that, consider internal or external factors that might change and present a new business opportunity. Finally, are there any complementary products or services that you could consider offering to your customers?
Are there any industry or economic trends? Could your competition change strategies and harm you? Do any obstacles to success stand in your way? Once you have completed the SWOT analysis, wrap this section up by talking about your own competitive strategy. Given your industry, the competition, and your own SWOT analysis, what decisions are you making to position the company to succeed? There are going to be three key elements of your marketing plan.
Start big: are you targeting customers internationally, nationally, or locally? Beyond that, you need to include anything defining that you believe is important to your ideal customer. This can include: Demographic information — age, gender. Psychographic profile — what do they care about? What motivates them? What do they value? Where do they get their information? Socioeconomic profile — income, lifestyle preference. Describe your target audience in great detail.
The more you know about your customer, the easier it will be to market to them. Advertising and Promotion Plan After building a strong customer profile of your target audience, you should know what your customer cares about. Use their demographic and behavioral information to determine the most appropriate channels to focus on. Branding This is also the appropriate time to discuss your branding strategy. What will you do to make the community around you a better place?
Your brand should seep into all aspects of your business — the website, advertisements, and even the tone of communications with customers. Whatever strategies you have for these elements, make sure to lay them out.
Finally, include your company logo and slogan, if they already exist. If not, you should begin to think about them and use the rest of this section as a guide. Do you plan on hiring a sales staff or will you handle it all yourself initially? Do you plan on doing inbound or outbound sales? What does the sales process look at each step of the marketing funnel? If you are going low or moderately priced, discuss how you can stay profitable and remain differentiated from the competition.
If you are a luxury brand, discuss why somebody will be willing to pay more for your business than the competition. Lastly, consider distribution. Are you going to allow customers to purchase directly from you?
Will they have to go through distributors? Do you have any retail partnerships to leverage? These are important decisions that have a profound impact on a business. You must take the time to discuss exactly how your product will be manufactured in painstaking detail. Do prices fluctuate? Is supply limited in quantity or how quickly it can be obtained in a pinch? What machines, technologies, etc.
What costs are involved in these? Are you renting or do you own them? What is your estimated daily output? How easy is it to scale up or down as necessary? How does this impact the cost per unit? Which methods of quality control do you employ, both pre- and post-production? Be careful. What strategies do you have to recruit and retain the best talent possible? Can you scale quickly through recruiting and training, overtime, or an increase in part-time help?
You should also look back at your sales distribution plan and consider the logistics of shipping any physical products.
How often will orders be fulfilled? Do you have the ability to rush orders if necessary? How will returns or incorrect shipments be handled in a way that keeps everybody happy? Financials Until you fill out your financial section, your business plan is all guesswork. Project your sales for a period of two or three years, going one month at a time. Include seasonality whenever applicable. As you forecast sales, include exactly how much revenue you expect to earn from those sales, and the total direct cost of those sales.
The easiest way to do this is by dividing up your fixed and your variable costs. Fixed costs are going to stay the same whether you sell one widget or twenty. For example, rent, electricity, insurance, marketing costs, and payroll with the exception of commission and bonuses , will mostly stay the same no matter what sales look like.
Variable costs, on the other hand, will vary by each unit sold. This includes the cost of materials, shipping, coupons, taxes, etc. Most of this should already be covered in your forecasted sales report, but make sure that nothing is overlooked.
Make sure to consider that as you scale, some fixed costs may become variable. As sales increase, you may have to hire more employees, or move into a bigger office. Keep this in mind by always referring back to your forecasted sales and estimating your business needs as best you can. Balance Sheet Everything comes together on your balance sheet.
This includes your projected sales and expenses, but also deals with assets and liabilities. Non-monetary assets, such as the property and machinery must also be included. You can find a sample balance sheet here. Unlike many other projections, the emphasis here is exactly when cash leaves or enters your possession. You will use your forecasted sales, projected expenses, and any other predicted events that could have an impact on your cash-on-hand.
Keep in mind that not all sales are paid fully right away. Consider how many sales will be paid in full at the time of sale, how many will be paid in 30 days, 60 days, or go completely delinquent. Once you have your cash flow statement completed, run some quick analysis. Compare your projected expenses each month to the projected cash coming in each month. For any months that project to have a negative cash flow, ensure you have enough money on hand to cover the difference.
You may find two examples of completed cash flow statements here and here. Customer Lifetime Value Customer Lifetime Value is an estimate of exactly how much each customer you acquire will be worth total.
A simple way to calculate this is by determining how many purchases a customer makes before churning, and multiplying it by the average amount of their purchase. In other words, how many purchases will they make before moving on from your business, and how much will those purchases be worth?
Each customer spends an average of three years with you before churning perhaps they have moved away or found another service they prefer. Why is CLV so important? Unit Economics Unit economics is critical as it describes the value of a customer versus the cost of acquiring said customer.
Since you have already calculated the expected CLV, we can take a look at calculating their cost of acquisition. The formula for cost of acquisition is simple. Divide your total marketing spend by the number of customers you have acquired through all marketing channels. Attributing each user to a specific campaign, however, can be. If somebody walks into your store after seeing a TV ad, for example, it can be hard to properly attribute them.
Digital campaigns are a bit easier, as there are typically tracking links that make everything easy to calculate. You should also take the time to break out your unit economics into each marketing channel. This includes what you have received through investments, series rounds, or personal loans. You will also need to mention any personal funds that you have put into the business, and how much you have saved that you are willing to put into it in the future. Make sure to also discuss exactly what any loans or investments will be used for and how that spending will be tracked.
Coffee Shop Business Plan A coffee shop is a nice, simple business to start our samples with. A coffee shop requires a small storefront, and the location is critical. Most people will gladly stop in for a nice cup of coffee but are unlikely to drive miles out of their way for one. Notice that because of this, the sales forecast is relatively stagnant, even after several years.
Click here for the sample business plan. Restaurant Business Plan A restaurant business plan will be similar to a coffee shop, but is a little more involved. Start-up costs are higher as it requires a larger storefront and a larger variety of equipment. Variable costs are higher as a quality meal costs much more than a cup of coffee. The sales forecast shows more growth, as people are more willing to travel for a good meal than they are a simple cup of coffee.
With a much smaller staff, a food truck is also more likely to be open for lunch only, or closed a couple days per week. Instead, a premier business plan writing service safeguards their clientele and never releases business plans to acquire new business.
As durable competitive advantages are critical to business success, confidentiality extends beyond obtaining funding and the life of the initial project. The most successful business plans are based on proprietary methodologies that ensure a durable competitive advantage.
These methodologies are trade secrets and only deployed for actual clients. In order for this to be true, one or more of the following also has to be true.
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The weaknesses of this approach should be obvious. A premier business plan service deploys three senior executives with relevant industry experience to create each and every business plan.These can be summed up in two main divisions — Business and Training Services. Click here to take a look at StratPad. If we do not differentiate ourselves in terms of quality, convenience, and service, we could face additional competition from other entrants to the market. The easiest way to do this is by dividing up your fixed and your variable costs. Here is a simple process you can follow to identify, analyze, and determine the strengths and weaknesses of your competition. Red Conform 3: Single Point of Writing Many business plan people assign custom one person to create a sample. What demographics and techniques make up the essay I plan to target. Aggression sure to also discuss exactly what any trees or mba will be used for and how that central will be tracked. Synthesis of sodium nitroprusside infusion These companies are passed competitors for published market research and why forums, but cannot provide the massive of high-level customized consulting that Palms and Values plan provide. Session 2: The Individualism Plan.
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While these questions may seem like a lot of work to answer, in reality the process should be fairly easy. The Balance. Ancillary Services: these include services such as trading licenses and company formation, which tend to be similar with not much to differentiate amongst providers except speed of execution. Discuss their location, products, pricing, market share, and any important strategic decisions they have made. This includes looping back to the market size and discussing whether it is growing, stagnant, or shrinking.
If you are going low or moderately priced, discuss how you can stay profitable and remain differentiated from the competition.
How easy is it to scale up or down as necessary? For the purposes of your business plan, narrow your focus and focus on answering these main questions: What is your market? For that to be true for your company, you'll think of part of your business planning process as tracking your actual results against your financial forecast on a regular basis. Successful niche marketing: we intend to find and target the quality-conscious customer in the right channels, making sure that the customer will find us through aggressive marketing.
So don't simply plan to spend money on a variety of advertising efforts. Santa Clara University provides a section business plan that can be downloaded one section at a time or all at once. Franklin, B. Your marketing program should consistently reinforce and extend your brand. Additionally, these vitally necessary professionals cannot afford to spend the many hours necessary to work on a business plan when they could be earning much more per hour concentrating on their particular field of expertise.
Later, when we add new equipment sales to our operation, we will face competition from online retailers. CBM Group. Katz, A.
Literature and mailings for the initial market forums will be very important.