Writing A Business Plan Series, Week 4: The Marketing

frozen water, a photo by arvindgrover on Flickr.

WIBO describes marketing as the "totality of all the activities involved in developing customers: researching, planning, promoting, prospecting and selling." Garrett Sutton says in his book its "the systematic process that inspires targeted customers to take action and buy your product and/or service." Your first page of this section should be an overview of your entire marketing plan.

Markets

"Start with a description of your overall potential (or real) market, then work your way into a more manageable discussion of your target markets. Include their demographics, psychographics - their needs, interests, attitudes, and lifestyles - and industrial demographics." 

Competition

I'm going to enjoy writing this section. Sutton's example is to "think of it as a novel or movie: both need conflict and dramatic tension to succeed. Challenge the hero/heroine to overcome... with knowledge and determination to prevail... Find stories on the internet about the entrepreneurs in your industry who became successful and study their strategies."

Distribution & Sales

WIBO states that "selling is helping people buy wisely what they need to satisfy their wants, overcome their problems and achieve their objectives." Sutton states "this is about understanding the purchasing patterns of target customers and setting your business up to make use of those patterns. Prepare month-by-month spreadsheets for each product/service you have with explanations. Describe any changes in pricing or volume and any strategies you have for physical locations and the web."

Marketing Design & Research 

The marketing campaign, essentially. Both WIBO and Sutton show how businesses exist in ever-expanding spheres of influence. Show how your business interacts within these spheres. Include information about your business, the competition, the market, the industry, the government, international affairs and other market factors; and consider which marketing vehicles will best suit your business.

Product Design & Packaging

WIBO stressed that everything with our business name on it needs to be of high quality and well thought out. Sutton states "to know the taste preferences of your target market and the psychology behind them." What he calls "positioning", WIBO calls "differential advantage". 

Pricing Strategy

You'll need to "create a pricing plan for every product/service you offer. Base it on careful analysis of product costs, overhead, competition, and target markets; include discounts, return policy, and warranties. Back this up with statistics and research."

I like Sutton's notes on how to enter the market: when ought "be more about your customers than you". 

Writing a Business Plan Series, Week 3: The Business, Part 2

Bluebell Woods, a photo by TheGirlsNY on Flickr.
I know this isn't a picture of water, but it is a sea of periwinkle from one of my favorite places: bbg.org.

Going back to Garrett Sutton's Writing Winning Business Plans, he states that while location is not "a critical factor for all businesses, it should be discussed in all business plans... Begin with the basics - [address, zoning, why this site was chosen, what facilities are at this location] - then expand on each." Then add the site's history, a physical description, and contact numbers." He wants us to ask ourselves many tough questions about business climate, so it's much more than place of business. "Allow for [either expansion or downsizing], and address all the factors that accompany them: personnel, buildings, land, parking, traffic, zoning, lease agreements, and the like."

Management and personnel fall under his chapter on logistics. According to his The Rich Dad Tip, this is "one of the most... read sections of [a] business plan... Write it according to a "'People Magazine/gossip style nature' because people want to read about what others are doing." Team is a crucial part to a B-I Triangle business' foundation. Sutton has an in-depth way of sorting out personnel needs with index cards. With one skill/task per card, include time estimates and the cyclical nature, then rate myself on how well I perform it. Balance this with how much time will be spent on the business, and then prioritize by importance or cost. Complete this and I'll begin to have a "good idea of my personnel needs and start-up costs as well as for the future." 

WIBO'S coverage of bookkeeping and accounting (Records) influenced me so much, I went out and bought some ledgers and Angie Mohr's Bookkeeping Boot Camp. I know some of my weaknesses lie in this area. Sutton states to "add record keeping and/or accounting systems and why they were chosen. I need to "understand [my] system, show that [I] can handle the load" and show how they will help "improve [my] business".

Insurance and security are a huge deal for businesses and is part of my and my customers' protection. Sutton wants his readers to consider their goals to:  

1. keep liabilities to a minimum 
2. prove to potential investors that I recognize the realities of product and personal liability in my industry

The latter shows investors I'm not a "high risk" and ensures they "see a return on their investment. It also shows I'm "ready, willing and able to reduce the risks of my business". The insurance list is very long. I need to know the standards for real estate so I don't get too much coverage and "plan for my security needs now". I'll need to sit down with an insurance agent soon to make sure I have everything my business needs in these two areas. 

I so like Sutton's Litigation section, that I'll quote a most important paragraph:

"But litigation and lawyers are now a permanent part of the business landscape. Some entrepreneurs, companies, and even real estate investors focus on their legal strategy as much as they do on marketing. Sophisticated investors understand this and will not be deterred by the presence of litigation that occurs in the ordinary course of business. That said, investors could have second thoughts about investing if the result of the litigation could snuff out the company's survivability, such as an environmental or hazardous waste claim, or the inability to use a key proprietary process. But also know that failing to disclose such a material matter as litigation can give those same investors a claim against you personally for misrepresentation and fraud. When in doubt, disclose."

Writing my business plan is exciting and there are many more questions I must ask myself. It's a first draft, so I'm going to have to push myself to completion, but so far, so good. Until next week...

Writing a Business Plan Series, Week 2: The Business

Week 33 NYC Skyline from Brooklyn Promenade, a photo by KimCarpenter NJ on Flickr.

For the next two weeks, I'll discuss The Business section of the business plan. This week I'll concentrate on Strengths and Weaknesses, Legal Structure, Business Description, Product Description, and Intellectual Property Description, using structure and templates from WIBO and Garrett Sutton's "Writing Winning Business Plans".

Strengths
According to Sutton, two types of strengths exist: common and competitive. "Common strengths are what I do well. Competitive strengths are what I do better than anyone in my field." WIBO considers the latter to be "your differential advantage".

I need to ask myself some serious questions: "are my strengths currently underutilized? What might I do to take advantage of my unique attributes? Knowing the difference is important because a business can improve through common strengths, but can dominate through competitive strengths. In what part of my business do my strengths lie? In my product? My operational logistics? Sales and distribution? Unique leadership skills or corporate vision? Which of my personal strengths can help my business?" I know I can be a bit of a dreamer, so  I "need to think creatively to highlight strengths that will realistically apply to my business". I also need to "understand the whys and hows of my strengths".

Weaknesses
These also come in two forms: common and catastrophic. "Common weaknesses are those shared with other businesses, like start-up hurdles. Catastrophic ones will consistently put me at the bottom of the pile. Common ones can be overcome, catastrophic ones can't or won't be overcome. Maybe one of my weaknesses happens to be a competitor's strength." 

Legal Structure

For my legal structure, I like the freedom an LLC gives me. I'm considering a Wyoming LLC because Flow Properties will invest throughout the country. They act as umbrellas over smaller LLCs which many of the properties will be structured as. 

Intellectual Property Description

WIBO gives great advice on how to protect your business' property - with trademarks, copyrights and patents. They state "the best way to ensure the fruits of your creative labor is to completely develop and market the finished product to the widest consumer base possible while excluding your competition using" the above mentioned protective devices. Sutton adds domain names and trade secrets to the mix.
One of the Rich Dad Tips listed in his book "strongly suggests filing for all available rights before distributing your plan." I consider that to be one of the best tips as I've learned that lesson firsthand.

Well, I have plenty of work to do, if the process of getting this blog post out is any indicator. Where are you in completing your business plan?