A Poorly Written Business Plan – The Marketing Plan

Today, I will show you the wrong way to write a “Market” section of your business plan.  The italics will be the plan, while the plain text will be my comments.  Since this is the first installment of my business plan series, shall we begin with the basics?

Step 1: Make product
Step 2: Promote product
Step 3: Profit

As much as I would love to say this is a business plan I just made up, it isn’t.  The first mistake many young entrepreneurs make is NOT MAKING a business plan.  Without a business plan, people will simply assume you don’t have a direction.  Does this represent your business?  Saying “trust me, this will work” will not appeal to venture capitalists!  In fact, they will probably laugh at you, spit in your face, show you the door, kick you out, tell the secretary to never let you back in, call your family and tell you how funny it was, tell your friends, then send you a nasty letter in the mail.  The next time you go out with your friends, you will be terribly embarrassed. We want to avoid that, don’t we?  Well, keep reading.

A market section of a business plan explains WHO will be buying your product (or service), WHY they will be buying your product,  HOW they will buy your product, and every other facet of fun that is pulled in the wagon of marketing.
Market
The market we are targeting is a multi-billion dollar industry relating to the market of online sales.

Whoa, hold on a second!  Let’s look things over.  Online sales?  We might as well rewrite this part of your business plan as:

The market we are targeting has to do with people… and sales.

I think you could get a bit more vague, but generalizing half of the planet is a pretty good start.  What are you going to accomplish?  What, specifically, is your industry?  Online sales is not good enough… But it is an acceptable starting point.
What if you put something like this:

Market
With the sales of skis exponentially increasing each year, the expected growth will exceed 50% over last years growth. 

That’s a pretty decent start.  You still haven’t defined who will buy it, why they will buy it, where they will buy it, and (specifically) how many are expected to buy it.  You also haven’t covered how you will market it, how much it will cost to market, the expected return, and oodles of other fun and detailed stuff!

NOTE: BossHatch.com is not here to put the reader to sleep.  The following examples of business plans are incredibly condensed.  Please understand that the purpose is to give you an -idea- of how you are supposed to do this.  BossHatch.com is also not liable for any friends laughing and pointing because you gave an impatient venture capitalist a one-sentence Marketing section.

Business plans are long.  They are terribly long.  The marketing section is especially long.  In fact, here is an ACTUAL example of a marketing section.  This comes from AudioRush.com.

On with the show.

So you have your audience defined.  You have your finances listed out.  You have listed the opinions of the audience.  Now you need proof.  Here’s how you shouldn’t do it:

After several in-depth observations, people who look to be between the ages of 14 and 87 enjoy skiing.  This represents a gigantic portion of the world.

Here’s how you should do it:

After receiving thousands of survey responses, it has been observed that 75% of skiers between the ages of 16 and 25 will shop online for skis this year.  The survey also shows that 50% of skiers between the ages of 25 and 45 will purchase skis online this year, and 35% over the age of 45 are planning on purchasing skis online, as well.  These measurements are taken with an error margin of +/- 3%.

50% of all of those surveyed are willing to pay $400 for custom skis, while 35% would pay $300…

Horray surveys!  Expect a followup post explaining how to make effective surveys, too.  They are easy to screw up… trust me.

For those who just skimmed to the bottom, here’s a list of items you want to bring up for your marketing plan:

• Target market
• Pricing
• Distribution
• Advertising/Marketing

So we have gone over the basics.  The main point you want to remember is this: BE THOROUGH.  This theme will be brought up in every future installment.