Share

Rating: 0.0 (0 votes)

Real Small Business: Building Your Business

V. Sales and Marketing

From the Editors of Real Small Business

This section of your business plan describes both the strategy and tactics you will use to get customers to buy your products or services. Sales and marketing is the weak link in many business plans, so take your time with this section. A strong sales and marketing section can serve as a roadmap for you, or as assurance to potential investors that you have a workable plan and the resources for promoting and selling your products and services. The three components of your sales and marketing section include: Strategy Method of Sales Advertising and Promotion

Strategy
Once you've defined your product, positioning, pricing, target customer, market, and competition, you need to wrap up all those assumptions into a cogent sales and marketing strategy. Think of this statement as an action plan for how you will get customers to buy your products.
Your strategy may be only a few sentences in length, or it can be a couple of paragraphs. Important elements for a sales and marketing strategy include who you are targeting with your initial push and what customers you have designated for follow-up phases. Other elements of a sales and marketing strategy are: How will you find your prospects, and once you find them, how you plan to educate them about your product. For instance, if you are using direct mail, you might want to talk about what kinds of mailing lists you plan to purchase.
What features of your product or service you emphasize to get customers to notice your product.
Any sort of innovative marketing or sales techniques you will employ. For example, you may sell your product by mail order when your competitors use only traditional retail channels. Or you may be the first in your industry to offer leasing.
Will you focus your efforts locally, regionally, nationally or internationally? Do you plan to extend your efforts beyond your initial region? Why?

Method of Sales
Describe available distribution channels and how you plan to use them.

Many entrepreneurs fail to give adequate thought to method of sales. How you get the products to the end user - your method of distribution and sales - is one of the most important elements of your plan. In this section you demonstrate the ability and knowledge to get your products into the hands of your target customers.

Will you be selling directly to your customers? Will you be using sales representatives, distributors, or brokers? Do you plan to have a direct sales force in place? See the list of definitions for some help in determining what method of sales to use.

You must also elucidate your plan for reaching your distribution channels. Will you be selling directly to your customers? Will you be using sales representatives, distributors, or brokers? Do you plan to have a direct sales force in place? See the list of definitions for some help in determining what method of sales to use. Will you use a "ground service" like UPS? Will you use a next-day delivery service? Parcel post? A trucking company? Make sure to include these costs when you calculate your financials later in the plan.

Tips Don't make the mistake of confusing sales with marketing. Sales focuses on how you get your products into the hands of your customers. Marketing is concerned with how you educate your potential customers about your product.
If you're using an outside or indirect sales force - like sales reps or distributors - be sure to describe the companies that will be carrying your products. What are the benefits of using these specific firms? What unique talents do they bring to the table?
Many small businesses assume that a sales effort can be set up with minimal timing, effort and expense. This is not the case. It can take as long as a year for a sales person to become acquainted with a product and territory. Even if you use sales reps who are intimate with a territory and market, expect there to be ramp-up time.
Don't assume a distribution network will give your products or services equal sales time. You may need to create an incentive structure that will encourage your network to push your products/services.

Advertising and Promotion
Your advertising and promotion campaign is how you communicate information about your product or service. This section should include a description of all advertising vehicles you plan to use - newspapers, magazines, radio & TV, Yellow Pages, etc. - as well as your public relations program, sales/promotional materials (such as brochures and product sheets), package design, trade show efforts, and the like. If you're using an advertising and/or a PR agency, be sure to discuss their talents and what efforts they are contracted to make on your behalf.

Tips Make sure that your advertising and promotion tactics support your sales tactics. For example, if you use sales reps, you will probably need to discuss with them what kinds of promotional materials you will supply. If you use direct mail sales, what kind of direct mail packages will you be producing?
Think about using examples or samples to support your discussion of promotional tactics. If you have a copy of an ad you've run, or a mock-up of an ad you plan on running in the future, include it in your business plan. You can place these samples in a separate "Exhibits" section at the end of the plan.
Unique product packaging is also a key promotional tactic. You probably will want to discuss the benefits of your package design, and include a sample in your business plan.
If you have a public relations plan in place, include a copy of your press kit, and a list of targeted media in your business plan. This will further demonstrate that you know exactly how you plan to reach your target audience.
If trade shows will be an integral part of your marketing strategy, be sure to include a trade show schedule outlining at which expos you'll be exhibiting. And don't forget to explain why you've chosen those shows.
If you are providing a business-to-business service, some areas to cover in this section include: trade shows, trade magazine advertising, publicity, direct mailings, product sheets, and other promotional materials. For consumer products, you should also discuss the types of advertising and promotion you will do to introduce the product and what kinds of sales aids will be provided to dealers.
If advertising or promotion is a critical expense, you should include an exhibit showing how and when these costs will be incurred.