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Business Plan Section 4: Products and Services

Key questions to answer:

❶Your executive summary will serve as an introduction to your business plan.

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Target Markets
How do you write the Products and Services section of a business plan?
What to Keep in Mind when Writing the Products and Services Description

The nice thing about writing the Products and Services chapter is that this is the subject you probably know the best: While you may need to do some research about your competitors, you should be doing this research anyway in order to determine how you can come out on top. Assume your reader knows nothing about your industry. Your reader is probably not as familiar with your type of business as you are, so give them the information they need to understand what you do.

If you must use jargon, be sure to define unfamiliar words. Sketch out a plan to organize your information before you begin writing. Some people make the mistake of sitting down to write without a plan, and they end up with a meandering, disorganized list of facts and interesting tidbits of information all run together.

This jumble of information makes it difficult for the reader to put together a clear picture of your business in their head. As the name suggests, this section of Products and Services Description explains all the products you sell.

What makes your product unique and special? If yours is a service company, here is where you will describe what you do for your customers. Just like with Product Offerings, be sure to explain how your services are different from, and better than, other companies just like yours. Talk about what goes into your decision of how to set your prices and how you will be making a profit. Is there a viable market for the product or service you want to sell? How old are your potential customers? What do they do for a living?

Is your product or service attractive to a particular ethnic or economic population? Will only wealthy people be able to afford it? Does your ideal customer live in a certain type of neighborhood or area? Establish the size of your potential market. From there, you can analyze demographic information more specifically: How many car mechanics are in need of soap in any given community?

How many children in the United States are currently under the age of eight? How much soap will they use in a month or a year?

How many other soap manufacturers already have a share of the market? How big are your potential competitors? What will you require to get started?

Some may be tangible, such as five hundred file folders and a large cabinet in which to store them all. Other requirements may be intangible, such as time to create a product design or to do market research on potential customers. What exactly will your mousetrap look like? What materials will you need? Do you require money for research and development to improve on your original toothpaste tube and paper clip construction? Do you need to hire an engineer to draw up accurate manufacturing designs?

Should you patent your invention? Will you need to investigate federal safety standards for mousetraps? Research possible locations for your business. Make a chart of the most expensive and least expensive sites by location and square footage. Determine your start-up cost. Make a list of all the tangible and intangible resources you need to get your business going. Be honest and conservative in your estimates, but also be optimistic.

You can forgo the expensive trimmings of an office of a more well-established company and stick to the basics at the beginning. Put yourself in the shoes of potential investors. Depending on your product, you may need to search long and hard for relevant information.

Can you still do a better job or provide a better widget than your competitors? In other cases, it may be a case of focusing more narrowly or more broadly than your competitors are doing. They follow specific guidelines, such as the Risk Management Association R.

A database, which are designed to ensure that they will make money by investing in or lending to your business. What will you accomplish for others? What products and services will you produce or provide? Write down all the specific needs your company will satisfy. Potential investors need to know that your business will be meaningful and marketable to people who can use your product or service.

So concentrate on the external needs your company will meet. What will your product or service enable people to do better, more cheaply, more safely, or more efficiently? Will your new mousetrap help people capture mice without feeling sick to their stomachs? Will your new bubblegum scented bubble bath revolutionize the way children agree to take nightly baths? Choose a winning strategy. How will you distinguish your product or service from others?

Although there are millions of types of businesses, there are actually only a few basic strategies that can be applied to make any enterprise successful. The first step in selecting an effective strategy is to identify a competitive advantage for your product or service. Your competitive advantage may include designing special features not found in rival products.

It may entail superior service characteristics such as speedier delivery, a lower price, or more attentive sales people——these are never to be sniffed at as possible winning ways, as many companies grow complacent and can be overtaken by giving customers experiences that are better than the average expectations. Consider how will you hire and organize your workforce.

Keep in mind that your initial plans will undoubtedly change as your business grows. You may need to hire more managers to supervise your expanding staff or to set up new departments to meet new customer demands. For now, you want to secure help in getting started and convince your funding sources that you will become profitable.

Consider the practical issues of running a business. Think about your role as leader or boss of the business. As you think about hiring personnel and organizing your workforce, you must also confront your desire and ability to be a good boss. For example, salaries and wages, their insurance and retirement benefits, as well as analyzing the extent of your knowledge of tax related issues.

Do you need to bring in experienced managers right away? Will you keep some of the existing employees or hire all new people? And where do you find these potential employees? Funding sources will also want to know if any of your partners expect to work alongside you or if their obligations are only financial. Your plan will need to specify the key management jobs and roles. Positions such as president, vice presidents, chief financial officer, and managers of departments will need to be defined along with stating who reports to whom.

Decide on a marketing plan. Consider how will you reach your customers. What will you say to persuade and convince customers that your product or service is better value, more timely, more useful, etc. What advertising and promotional efforts will you employ? For example, two for the price of one specials or free coupons inside those same kid-oriented cereal boxes? Where can you locate lists of the greatest concentrations of children under the age of eight or whatever group constitutes your market?

Build a dynamic sales effort. In a nutshell, this part of your business plan is about how you will attract customers or clients for your product or services.

What will your basic sales philosophy be? Building long-term relationships with a few major clients or developing a clientele of many short-term customers? Organize all the relevant information about your business. Begin creating section headings and putting the appropriate information under the appropriate headings.

Write the executive summary last. It should be less about the nitty-gritty details of operations and more about your grand vision for the company and where it is headed. Gather all the information together and prepare multiple drafts.

At first, do not worry about capitalization, punctuation, and grammar. All you need to worry about is putting your ideas down on paper. Once you have a general form, you can spend time proofreading your plan and correcting mistakes. Have someone else read over it for you and take heed of their comments. Sell yourself and your business. The idea of the business plan is to present yourself in the best light. The talents, experience and enthusiasm you bring to your enterprise are unique.

They provide some of the most compelling reasons for others to finance your concept. Keep in mind that investors invest in people more than ideas. Even if your potential business has many competitors or is not on the cutting edge of an industry, the qualifications and commitment you demonstrate in your plan can convince others to proffer their support.

Focus on group experiences, leadership opportunities, and successes at all levels. Present and explain your financial data. How will you convince others to invest in your endeavor? The accuracy of your financial figures and projections is absolutely critical in convincing investors, loan sources, and partners that your business concept is worthy of support. The data must also be scrupulously honest and extremely clear.

Since banks and many other funding sources will compare your projections to industry averages in the R. A data, in the United States you can use the R. A figures to test your projections before the bank does. Sample Small Business Business Plan. Specify the product, source of it, and people in need of the product.

List capital, handy or loan. List whether you have sales reps, your availability for outreach on demand, and your source of mobility.

How to Structure the Products and Services Section of a Business Plan

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In the Products and Services section of your business plan, you will clearly describe--yep--the products and services your business will provide. Keep in mind that highly detailed or technical descriptions are not necessary and definitely not recommended.

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The products or services section of your business plan should clearly describe what products and/or services you're selling with emphasis on the value you're providing to your customers or clients.

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The product and services section of your business plan is more than just a list of what your business is going to provide. Especially if you plan to use your business plan to get funding or find partners, your products, and services section needs to showcase the quality, value, and benefits your business offers. Business Plan Section 4: Products and Services This is the part of your business plan where you will describe the specific products or services you’re going to offer. You’ll fully explain the concept for your business, along with all aspects of purchasing, manufacturing, packaging, and distribution.

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The strategy element of the business plan describes how your products or services will be sold, the target markets you will sell to, the marketing message you intend to use to convince customers to purchase from you, and the methods you will use to . Jul 11,  · How to Write a Business Plan for a Small Business. Three Parts: Preparing To Write Your Business Plan Writing Your Business Plan Finalizing Your Business Plan Community Q&A. A business plan refers to a written document that comprehensively outlines what your business is, where it is going, and how it will get 89%().