A business plan is a crucial document that sees you outlining your vision for the future and detailing the strategies that will enable you to achieve this. Simply put, it is a roadmap towards success. You’ll be forced to clarify your ideas and understand the financial demands associated with launching your start-up – turning it into a viable reality.
But, where do sales and marketing feature within the document? Sales and marketing are crucial components that address four main topics within a business plan: product, price, promotion, placements and people, otherwise known as the 5 Ps. To successfully launch a new venture, you need to be able to reach and sell to your target audience effectively. Having a fantastic product or exceptional customer service is of no use if you can’t attract your buyers.
So, in today’s Knowledge Hub article, I’m taking you through the sales and marketing aspects of a business plan, allowing you to fully understand the essential role it plays in crafting an effective outline that will serve your start-up. Ultimately, this will secure you with a solid foundation, increasing the likelihood that your endeavour will thrive.
Why do you need a business plan?
We tend to focus on start-ups when speaking about business frameworks and plans, but the truth is, regardless of size, a business can benefit from the creation of such a document. Whilst you may not be looking to attract potential investors, this plan can also help you:
- Determine where you are now in relation to where you want to go in your business
- Identify needed resources to start and run your business
- Develop clarity and focus on what needs to be done
- Gain insight and understanding into your industry and market
- Calculate start-up costs and what you need to charge to build a profitable business
- Hone in on your offer, how its different from your competitors, and how it benefits your potential client/customer
- Obtain financing
- Decide if you need to hire or contract outside help
Why is a sales and marketing strategy so essential?
At a basic level, sales and marketing have to do with knowing your market and competitors, and designing your brand – the messaging, pricing and how you’ll then market across each channel to maximise sales. We’ve already touched upon the 5 Ps you’ll need to cover, but how do you address each topic within your business plan?
- Product. Describe the product or service you are offering – what does it do, what are the benefits and how does it differ from your competitors?
- Price. Outline your pricing strategy – how will you price your product so that you make a good margin but remain competitive? How can you justify this?
- Promotion. Provide insight into your marketing strategy – what promotional methods will you use to communicate the features and benefits of your products or services to your target customers?
- Placement. Determine where a buyer will go to purchase your product – how will you get your products to your consumers?
- People. The sales and marketing team – who are they and how do you plan to measure customer satisfaction?
Together, these form the foundations of the sales and marketing aspect of your business plan. Be sure to stress what is unique about your business when drafting this to attract potential investors. Remember to concentrate on how you can make your customers care about what you are offering.
You also need to highlight that you’ve conducted invaluable, thorough research before launching a new start-up and this should be detailed within your plan. There are three main areas you need to cover to portray an in-depth understanding…
How do you determine if there are enough people in your market willing to purchase what you have to offer at the price you need to charge to make a profit? The most effective way is to conduct a methodical analysis of the market you plan to reach, taking into consideration all external factors. Ultimately, you want to build a ‘full picture’ of the business environment you plan to enter.
Much of this information will come from a SWOT analysis; a strategic planning technique used to help a person or organization identify strengths, weaknesses, opportunities, and threats related to business competition or project planning. Topics addressed in this segment include the existence and type of competitors, the characteristics of your target customers, market size, distribution costs, trends in your industry, and the market in general. This sets the stage for your marketing strategy, highlighting that you have carefully considered the most effective methods.
As you may have already guessed, the marketing strategy portion of your business plan presents the approach you want to take to promote your product or services to your buyer. At a detailed level, it explains how you will get your customers to purchase the desired quantities. If someone reads your plan with no prior knowledge, they should be able to walk away with the ‘full picture’ of how your business plans to positions itself in the market. Within this segment, you should also address the strengths and potential risks of your chosen marketing strategy. You should be including:
- Identification of your target buyers – a detailed buyer persona (this could be for more than one!)
- The market segment in which you’ll compete – you need to become an expert within this area.
- The reasons why the product or service you offer is unique – the niche, the benefits on offer.
- Your pricing philosophy – are you a luxury brand reaching an exclusive market or more affordable?
- Your plans for market research – where you currently lie in the market and where you are headed.
- Your ongoing product or service development plans – how will you continue to grow?
When writing this porting, it’s important you keep in mind the 5 Ps as they’ll help you define your marketing strategy successfully.
Marketing and sales plan
Your marketing and sales plan should explain how you will reach your target audience and how you will effectively market your product or service to those customers. In essence, the marketing plan takes the marketing strategy that you developed to a tactical level as you begin creating an actionable course of action. It specifically lays out the steps you will take and builds a timetable to implement each strategy.
The marketing and sales plan usually includes a calendar that ties marketing and sales activities to specific operational events. For example, a campaign may begin months prior and lead up to the release of a new product – a countdown to build anticipation. Once the new product launches, these ads would be ramped up to increase sales conversions and hit specific targets.
It can be difficult identifying which sales channel is most effective for your business, but part of this is recognising who your buyer is and performing an in-depth analysis of where they are most likely to view your products or services. It’s important your sales and marketing divisions understand what is expected of them and how you want them to approach this crucial aspect of your business. Remember, this aspect is essential to your business ultimately thriving and should not be overlooked as an optional add-on when writing a business plan. Instead, it should have a dedicated portion within the document.
You can clearly see the important role sales and marketing play within a business, and therefore the crucial inclusion of this aspect within a plan. To successful thrive in the ever-changing and competitive marketplace, you must be visible to your target audience. Failure to do so could see you lose motivation and ultimately see your new venture miss the mark. It can, however, be difficult to know where to begin. One of the most difficult aspects of a business plan is clarifying your ideas and understanding what channels your desired buyer utilises day-to-day and, of course, identifying how you can get them to pay attention to you. You need to specify your niche and creating a detailed document forces you to do so.
With over 30 years in the industry, I’ve successfully worked with a range of businesses to develop effective business plans, incorporating innovative sales and marketing features that provide the right results. And, I can help you too. Together, we can transform your organisation and unlock its true potential. Contact me today at email@example.com or complete the contact form here and I’ll get back to your shortly to discuss your individual requirements.