The business plan, also commonly known as a marketing plan, is one of the most important documents to an entrepreneur. Having a well laid out and correctly formatted marketing plan can help the company to attain its goals. Here are four things that every business plan ought to have.
Adequate planning and preparation is the key to making any project smooth and successful. Any successful entrepreneur plans every step of his startup from the infancy stage. While starting up your own business, you will be very much confused about what you should do first to give a start to your business. You have no clue about what you should do or when you should do it. You may also think about software for writing a business plan but not just now in the initial time of your business you have some basics to be understood so that you can understand how you need to write a good business plan for your business.
A company needs a marketing plan just as it needs a business plan. Here’s how to write a five-part marketing plan that works as hard as you do:
Section 1: Situation Analysis
This introductory section contains an overview of your situation as it exists today and will provide a useful benchmark as you adapt and refine your plan in the coming months. Begin with a short description of your current product or service offering, the marketing advantages and challenges you face, and a look at the threats posed by your competitors. Describe any outside forces that will affect your business in the coming year–this can be anything from diminished traffic levels due to construction if you’re a retailer or a change in the law that could affect a new product introduction if you’re an investor, for example.
Section 2: Target Audience
All that’s needed here is a simple, bulleted description of your target audiences. If you’re marketing to consumers, write a target-audience profile based on demographics, including age, gender, and any other important characteristics. B2B marketers should list their target audiences by category (such as lawyers, doctors, shopping malls) and include any qualifying criteria for each.
Section 3: Goals
In one page or less, list your company’s marketing goals for the coming year. The key is to make your goals realistic and measurable so that you can easily evaluate your performance. “Increase sales of peripherals” is an example of an ineffective goal. You’d be in a much better position to gauge your marketing progress with a goal such as, “Increase sales of peripherals 10 percent in the first quarter, 15 percent in the second quarter, 15 percent in the third quarter, and 10 percent in the fourth quarter.”
Section 4: Strategies and Tactics
This section will make up the bulk of your plan, and you should take as much space as you need to give an overview of your marketing strategies and list each of the corresponding tactics you’ll employ to execute them. Here’s an example: A client of mine markets videotape and equipment. One of her goals is to increase sales to large ministries in three states by 20 percent. Together we’ve developed a strategy that includes making a special offer each month to this prospect group, and one of her tactics is to use monthly e-mails to market to an in-house list.
Your tactics section should include all the actionable steps you plan to take for advertising, public relations, direct mail, trade shows, and special promotions. You can use a paper calendar to schedule your tactics or use a contact manager or spreadsheet program–what matters most is that you stick to your schedule and follow through. A plan on paper is only useful if it’s put into action.
Section 5: Budget Breakdown
The final section of your plan includes a brief breakdown of the costs associated with each of your tactics. So if you plan to exhibit at three trade shows per year, for example, you’ll include the costs to participate in the shows and prepare your booth and marketing materials. If you find the tactics you’ve selected are too costly, you can go back and make revisions before you arrive at a final budget.
You can adapt this plan as your business grows and your marketing programs evolve. You’ll find it’s a simple tool you can’t afford to be without.
Importance of Marketing Plan to an Entrepreneur
1. Target Your Problems
The importance of a business plan to an entrepreneur begins by helping you to identify your possible problems and challenges. It’s one thing to aim for a goal of being profitable in the first year of operation, but how will you achieve that? A business plan forces you to get realistic and look at your numbers. This document often helps people to see where their real challenges and obstacles lie, making for a more pragmatic approach as the hard facts make their way into the plan.
2. Get Better Advice
The importance of a business plan to entrepreneurship can also be in the way it crystallizes just what kind of help you need. Merely telling a friend or potential business mentor you’re aiming to start with ten employees, for example, is not an exceptionally detailed statement. Showing a business plan that outlines the exact duties, salaries, and expectations you have for employees gives far more information for people to provide advice about.
3. Organize Your Resources
A business plan is also essential as the primary guide for how you will structure and allocate your resources. It’s here that you will see just how feasible it is to open an office, hire employees, and look at operating costs. The business plan can quickly show you whether you will be making a profit or running at a loss, and it shows how much those losses maybe every month.
4. Approach Investors
For some, this may be critical. Investors want to know that you know what you’re doing. A business plan can often be the single most important document you can present to your investors that will provide the structure and confidence that they need to make decisions about funding and supporting your company.
5. Create Milestones
A business plan is also a plan of action. By laying out milestones, you now have targets to shoot for in the short, mid, and long term. These goals also mean that you can “course correct” with greater agility if you have targets and realize that you may need to make some changes to meet them.
The importance of a business plan can be critical for entrepreneurs. The business may have some artistry to it, but real success comes from having a vision and being organized in the way you strive towards that vision. A business plan will help you immensely and in so many ways!
IMPORTANCE OF THE ENTREPRENEURSHIP AND MARKETING INTERFACE
The entrepreneurship and marketing interface is an important issue for several reasons (Hisrich, 1992). First, many studies on entrepreneurs and entrepreneurship around the world reveal that the greatest problem areas are marketing and finance. Finance problems are related to obtaining capital to start a new business, financing growth, cash flow management, and financial control, where obtaining the initial capital needed to build a prototype or start initial production seem to be the most difficult. Marketing problems often reflect the lack of a marketing plan, inaccurate determination of market size, and unreliable sales forecasts. Sound marketing is a necessary component for developing a new product/service for the market, as well as successfully selling, nurturing, and growing the company.
Second, many entrepreneurs have limited knowledge about marketing and believe that all they need is an innovative product/service and that all consumers will buy this product/service. This misguided belief is often caused by the so-called “bag mentality” of entrepreneurs, where entrepreneurs are so afraid that someone will steal their idea, they put it in a “bag” and do not obtain any market feedback. Without market feedback, entrepreneurs may provide unsuccessful products and still expect unrealistic sales. To be successful, entrepreneurs need to have information to determine the appropriate market segment, price, distribution, and communication.
Third, many entrepreneurs can be bad marketing managers. Very often, entrepreneurs underestimate the time and effort needed to accomplish a certain marketing task and overestimate the sales that will result. This results in poor marketing plans. A poor marketing plan may even cause the loss of the business when the entrepreneur is tied to a specific sales objective and performance by the funding source.
Entrepreneurship and marketing also have many similarities. First, the consumer is a focal point of both concepts, which means that the two should be based on consumer orientation. Second, both entrepreneurship and marketing have a “deal” mentality – the deal is a central factor in conceiving and developing a new business for the entrepreneur and closing a sale for the marketer. Finally, both concepts involve the development of distinctive competence; both are affected by environmental turbulence; and both are all-encompassing – entrepreneurship in terms of developing an entirely new business and marketing in terms of its models.
Why a business plan is important for entrepreneurs
There are many reasons why entrepreneurs need to have a business plan. A few of these reasons include:
It puts a plan in place when starting a new business
A lot goes into starting a new business. In addition to coming up with a business idea, you also need to solidify the specifics of the business, like what services or products you will sell, where you will do business, and who will work for the company. A business plan can help provide guidance in this process, which can also help avoid mistakes along the way. It can offer you insight into the steps you need to take to open your business, as well as the resources you will need to obtain.
To conduct the necessary research
You might create a business plan before even deciding to open a business. Writing a business plan requires that you conduct the necessary research, which can help decide if starting a business makes sense. You might also create a business plan if you intend to take your existing business in a new direction. By writing out the details and finances of the new plan, you can determine if a shift will be profitable. This includes defining your market, pinpointing who your customers are and how you will reach them.
Related: How To Conduct Market Research
To evaluate competitors and find your audience
Another part of creating a business plan is researching the current companies in the industry in which you want to work. By identifying competitors and where they are not currently reaching customers, you can better predict how you will reach them. It can also help you choose your target audience.
Sets objectives for employees and managers
Setting and measuring objectives will ensure that employees and managers are clear on their duties. This can also help you choose the right staff for your business by setting clear expectations and objectives. You might also use this information to help with training new employees and managers. A business plan sets the expectations of the business from the beginning. If you change or update your goals, a business plan can help share these new objectives, providing structure and accountability.
Sets goals for you as an entrepreneur
Setting clear goals is also helpful for you as an entrepreneur. You can use a business plan to list specific goals that you want to achieve, along with target dates. This can provide you with a guide to structure your daily responsibilities, while also providing you with accountability as an entrepreneur.
To determine when new employees are needed
As you expand your business and increase your revenue, you will need additional employees to assist with the daily tasks. But, hiring people before you’re ready to expand can reduce your profits. A business plan can help you evaluate the right time to bring on additional staff. It can also help with setting clear duties and expectations for each position. You can also use your plan to determine what skills to look for when hiring.
Assists you in making important business decisions
Decision-making is an important task as an entrepreneur. Some decisions, like when to rent a new space or expand the business, are not always easy to make. With a clear business plan in place, you can determine the specific times or goals you must meet to make these important decisions.
To know when to sell your business
You may decide to sell your business and move on to other ideas. But, deciding when to sell can be a difficult decision. Setting clear guidelines for what goals and achievements you would like to reach with your business can help you set a timeline, knowing when it is the right time to sell. The information in your business plan can also be helpful when selling, as it lays out the achievements, as well as the plans for the business, which can contribute to its value.
To determine how you will find funding
You may decide to take out a business loan or invite investors to be a part of your business. New businesses often require funds and a business plan can help you present your ideas to potential investors. If you apply for a business loan, you may need a thorough business plan to demonstrate your business idea to the bank lender too. A business plan can also help you decide how much money you will need to start, and operate, your business.
To understand when/how you will profit
Salary is not always clear as an entrepreneur. But, whether you are providing investors with an estimate of when they can expect a return on profit, or you want to know how long until you will profit, you will need a business plan. A business plan lists the expected costs of the business, as well as the revenue. As long as you meet the financial goals listed in the business plan, you can predict when and how you will make a profit.
Help you predict problems
A business plan can also help you predict potential problems, like slow seasons or changing customer trends or habits. You may be able to prepare and overcome these challenges ahead of time with a business plan.
Provides a valuation for the business
Placing value on a small business can be difficult, but it is sometimes necessary. Whether you want to include it in your estate, list it for sale, or need a value for taxes, a business plan can be a valuable resource. Providing your business plan to an accountant can also help them calculate an accurate value for your business.
13. To share your business plans with coworkers and family
When you open a business, you will likely get a lot of questions about what you do from previous coworkers and family members. Drafting a business plan can help you answer these questions, sharing your goals and plans with them.
To provide you with guidance during difficult situations
As an entrepreneur, you may have to deal with things like employee conflict or even legal difficulties. A clear business plan can help you deal with these issues, identifying the purpose of your business and what you hope to achieve.
To create an effective marketing strategy
Once you have a business, you will need to reach customers through marketing. Setting clear goals for the business can help you pinpoint not only who your customers are, but also the best way to reach them. This can help you maximize your marketing budget and increase your revenue.
To give you the best chance of success
The goal of entrepreneurship is to own a successful business. While no business idea is guaranteed, having a clear business plan in place increases your chances of success. Returning to the business plan from time to time can also help remind you of why you became an entrepreneur and can help you refocus on the mission statement of the business.
Manage cash flow for the business
Once profits begin coming in, you will need to decide how to spend them. You may use profits to take a salary, reinvest in the business or find new products or services to sell. Listing your cash flow plans in your business plan can make this decision easier.
To determine the success of the business
A business plan sets clear goals, which can help you measure success. Including key performance indicators allows you to know how to measure your progress toward your goals. You can use this information to determine what areas of the business are doing well, versus which areas need improvement. You can also use it to help identify the need for new goals or plans.
A business plan, whether for an individual or an organization, is the key to ensuring that the venture succeeds. There are many key parts and essentials to a business plan, but you must consider each one and make sure you have all of them included in your business plan. If a business plan doesn’t include all of the important elements – such as researching the competition and outlining the steps to take in order to achieve your goals – then it can be detrimental to your chances of succeeding with your venture.