Continuing with your business plan – the story about your business:
Step Three – What are we going to do it with?
Typically called – “The Marketing Summary” – this section/chapter identifies the products/services that the company offers, and their plans for each during this business plan period.
The format for this section is:
- A description of the product/service, and the market(s) that it competes in.
- Where the product is in its product life cycle (E,G,M,A).
- How much it contributes to the profitability of the company.
- The specific marketing strategies for this product/service.
- Any plans for modifying this product/service to meet changing customer requirements, and by when.
- Any concerns about competitive threats.
When completed this section should present a clear picture of where the company is in its life cycle and the individual products/services positions in their life cycles that support and contribute to the overall company life cycle position.
Ideally, this should be summarized in a table-like presentation:
Product Life cycle position Projected sales Profit contribution
A G Yr 1 Yr 2 Yr 3 Yr 1 Yr 2 Yr 3
As you can see this simple presentation gives the reader a complete picture of how each product/service contributes to the total projected sales and profits of the company for each year of the business plan period, as well as where each is in their product life cycles, and the company as a whole.
In combination with the narrative for each product/service you have a complete presentation of “what we are going to do it with”.
Stay tuned for Step 4!
As always, send us your questions for Dr. Business to firstname.lastname@example.org.
In this week’s question, we ask Dr. Business “Are mentors important for entrepreneurs?”
Dr. Business says:
“Entrepreneurs are techies of one sort or another, and typically have never taken any courses on the fundamentals of running a business. As a result they need help and mentors are the ideal individuals to guide them during the critical start-up of their new business. They can help right from the beginning by sharing their feelings about the commercial viability of the entrepreneurs idea. Many entrepreneurs have great ideas that just will not fly either because there just aren’t enough customers, the cost are prohibitive, the technology too complex for the current market, or the competition too great.
If the mentor feels the idea has merit then the best that they can do for the entrepreneur is to guide them through the development of a business plan, and most importantly the break-even analysis for their first year of operations. The business plan is critical for two reasons (1) as a much needed education for the entrepreneur, and (2) as the basis for explaining and justifying the value proposition for potential investors. The break-even analysis lends even more credibility to the presentation to prospective investors.
Other types of mentors are accountants who can also help entrepreneurs understand the value of developing timely financial statements and budgeting. And, lawyers are essential to any business, and especially start-up’s who need help with a variety of contracts. Lastly, mentors who are experts at marketing can be very helpful in the current era of social media and mobile marketing.
The best advice I have for any entrepreneur is to establish an Advisory Board of mentors as soon as possible before launching your new business. They will save you from yourself.”
Thanks, Dr. Business. As always, if you’ve got a specific question you want Dr. Business to address, email it to us.
In this week’s post, Dr. Business answers the question about the need for an MBA to start a business.
Here’s what Dr. Business had to say on the topic.
The more education in business that anyone can get before starting a business is always a good thing. However, getting an MBA is not a prerequisite for young professional entrepreneurs who want to start a business. While all the courses they would take would help them with one aspect of their new business or another, MBA courses are really designed for those middle managers who want to continue to climb the corporate ladder, not start an entrepreneurial new business.
The exception to that is the MBA course on Entrepreneurship & Innovation that I teach. It is an elective and as such attracts MBA students who have an interest in starting a business, or at least getting to know more about all that is involved in the process. The primary deliverable in the course is the development of a business plan for an idea that they have had for a business for a long time. The value of the course for these MBA’s is that it gives them an opportunity to see if their idea for a business is commercially viable, or not. More importantly, they get to see how all the other MBA courses that they have taken contribute to managing a successful business in one way or another. Every year several of my MBA students in this course actually use the business plan they developed in the course to start a business.
There are a multitude of sources for young professional entrepreneurs to get advice and support. One of the best sources is the multitude of incubators and accelerators that are available now at many colleges, or affiliated with universities in one way or another. Colleges and universities also have successful alums volunteering to be mentors for would-be entrepreneurs. Lastly, there are a multitude of books that have been published and continue to be published on entrepreneurship and how to start and manage a profitable business. Success stories are also published almost every day in the business press.
The best advice I have for young professionals is to watch ABC’s TV show “SharkTank” to get a first hand view of how NOT to do it!
Join us next week when Dr. Business breaks down another burning question in the mind of the startup entrepreneur.
This week’s question: What classes can I take on entrepreneurship?
Dr. Business: Many colleges and universities have courses on entrepreneurship. They are good to gain a fundamental understanding of entrepreneurship, but they need to be supplemented with some hands-on practical experience to achieve a better understanding of what it means to be an entrepreneur.
In my MBA course on “Entrepreneurship & Innovation”, since I am the epitome of an entrepreneur I share with my students what I have done and I am still doing of an entrepreneurial nature to give them a real life flavor for what’s involved. In addition to that I have selected three course deliverables: (1) develop a paper on an entrepreneur outlining what problem they identified, the solution they developed, and how they raised enough money to implement the strategy that has made their business what it is today, (2) select a relatively new website created by an entrepreneur that they currently use and get value from, and present it to the class explaining how it has evolved, and (3) take an idea that they have for a business and develop a business plan to determine whether or not it can be a viable, profitable enterprise. This project is an invaluable learning experience for any would-be entrepreneur.
As a result of taking my course, on average, several of my students have started their own businesses every semester. This blending of my actual experiences as an entrepreneur, the study of other entrepreneurs, and the actual exercise of constructing a business plan on their own idea, has proven to be a model for success in terms of teaching the concept of entrepreneurship.
What’s your question for Dr. Business?