How to write a business plan ... 5

Sales and Marketing

This section is crucial. It often gives a good indication of the business’ chances of success.

How will your product or services meet your customers’ specific needs?

How will you position your product?

·        This is where you show how your price, quality, response time and after-sales service will compare with competitors.

·        Quote minimum order figures, if appropriate.

How will you sell to customers?

·        For example, by phone, through your website, face-to-face or through an agent.

·        Show how long you predict each sale will take. Many new businesses underestimate the time involved in winning each order. In year one, you may spend up to 80% of your time making contacts and selling.

·        Will you be able to make repeat sales? If not, it will be hard to build up volume.

Who will be your first customers be?

·        Show which customers have expressed an interest or promised to buy from you and the sales they represent.

·        How will you identify potential customers

Unless you demonstrate that you have a clearly defined pool of potential customers, starting your business is likely to be a struggle.

How will you promote your product? For example: using advertising, PR, direct mail or via emails and a website.

What contribution to profit will each part of your business make?

·        Most businesses more than one product, more than one type of customer and more than one distribution channels.

·        Look at each in turn. Examine your likely sales, gross profit margins and costs.

·        Identify where you expect to make your profits and where there may be scope to increase either margins or sales.

Services and intangible product (e.g. computer software) are more difficult to market.

Start-ups in these areas must pay special attention to marketing in their business plans.