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1. Define your target market – Who is your ideal client? What are their characteristics? Where can you find them? How can you best approach them? What is the most catchy offer you can develop for your audience? These are some of the questions you need to answer before planning your marketing strategies.

2. Set your Budget – Before planning the actual marketing strategies, make sure you set yourself a budget for marketing. Many businesses spend an average of approximately 20% of their revenues on their marketing efforts. Of key improtance here is that you feel ok with the money you want to spend on marketing and stick to your budget!

3. Set your Strategies – Now, that you know your target market and your budget, you can start planning out your strategies. Do you want to do some advertising, spend your time on networking, implement a direct mail campaign, or focus on web-based marketing? You may want to do some market research and see what other successful businesses in your industry do to market themselves. Pick a handful of strategies you feel good about and want to implement.

4. Determine your break even for EACH strategy – It is one thing to develop an overall budget, but a very different thing to know the cost for each marketing strategy. In order to know your marketing effectiveness you need to figure out how much each strategy will cost you. This will be your break even point for this strategy. The goal then becomes to generate enough clients from each strategy to pass break even.

5. Plan your action items – You need to break down each marketing strategy into action items and steps you need to take. Then you write each action item on a calendar, telling you exactly what you need to do each day to follow your marketing plan. This is probably THE most important part of any marketing plan.

6. Track your success – Now that you have developed your action item list for your marketing efforts it is time to put the plan into action. As you roll out your marketing strategies make sure you are tracking your response to your marketing strategies. You should know which prospect came from which marketing strategy. This will tell you which marketing strategies are successful and which are not.

 The same is true with your business. If you don’t know where you want to take your business, any path will get you there. It is important you determine goals in your business. Are you going to be the #1 in your industry in 5 years? Are you trying to achieve $xx by year 3? What is it you want to achieve with your company?

 When formulating your goals keep the SMART rule handy. SMART is an acronym that stands for:

 S – Specific: Your goal needs to be specific. There shouldn’t be any gray area or question when you ask yourself if you achieved it or not.

 M – Measurable: Attach some numbers to your goal. This will make it possible to determine with objectivity whether you achieve your goal.

 A – Achievable: You goal should be realistic. If you are a one person company and you are shooting to have 3,000 employees in three months time, chances are you are setting yourself up for failure.

 R – Results Oriented: When you set your goal for the business, ask yourself the question “What are you really after?” If the answer to the question is the same as what you listed in your goal, you have set yourself a realistic goal. If your answer is different, chances are you simply listed an action item as a goal. Your goal should be different.

 T – Time Bound: Give your goal a time frame to be completed by or it will not happen.

1. Figure out who your target market is. This step may seem very easy and simple, but is more complex than you first may imagine. Let’s assume for example you are a carpet cleaning business. At first you may think your target market is any home owner or renter in your area. This is correct. However, by looking at this in more depth you may realize that a large percentage of your clients are actually families with young children or pet owners, since they have a need to get their carpets cleaned more frequently. Also, you may discover that most frequently, a female will make the call to hire a carpet cleaning company. In other words, while your target market consists of all home owners and/or renters in your area, you have several segments (young families and pet owners) to cater to with your marketing. Your marketing material can contain language and pictures that are especially appealing to those segments. Insert a picture of a cute baby or a guilty looking pet in your material and you catch the attention of your two segments.

2. Learn how big your target market is. This part of your research can be a little tricky but is crucial if you want to get a good idea about what your market potential really is. There are a lot of businesses and resources out there that can help you determine how big your target market is. For local businesses, we recommend checking with the local Chamber of Commerce for some information. Also your County offices may have some information on the local economy. The US Census Bureau publishes statistical data on the US and its regions on an annual basis. Try to find out how big your market potential really is and attach a dollar value to it. You may find it is significantly bigger than you originally thought, or that your segment is too small for your business to survive.

3. Research your competition. Next you need to know who your competition really is. First, list all the competitors that come to mind. Then do some research on the Web to see who else serves your target market with a competitive product or service. It also helps to ask your friends and family who else they think off when they think of your company. Once you have the list developed the real work starts. Try to find out as much about your competitors as possible. Here is a partial list of questions you may want to get answered: – How long have they been in business? – What are they best known for? – What are their price points? – How do they market? – What market share do they have? – What are their other products that don’t compete with you? – What are their weak points? – What are their strengths?

4. Develop a SWOT Analysis. All the research you have done about the market and the competition will be summed up in a SWOT Analysis (SWOT = Strengths, Weaknesses, Opportunities, Threats). For your own business list these four areas in a grid:

Strengths - List all the strengths your business/product/service has compared to the competition 

Opportunities – List the opportunities you see for your business/product/service

Weaknesses – List all the weaknesses you business/product/service has compared to the competition 

Threats – List all the threats you can see facing you in your company/product/service

After you are done with your SWOT analysis, you should have a very clear picture of your own opportunity. List ways you can take advantage of your strengths and opportunities. And most importantly list ways you plan to overcome weaknesses of your company and the threats it faces in the market place.

You have a lot of freedom in the development of a business plan. I have seen business plans without financial documents, business plans without a marketing plan, and business plans that go into every business aspect possible. The content of the plan depends on your needs and what the recipient of the document is looking for. I suggest the following layout of a plan to start out with.

 1          EXECUTIVE SUMMARY

2          COMPANY OVERVIEW

2.1       BUSINESS HISTORY

2.2       LEGAL STRUCTURE AND OWNERSHIP

2.3       MANAGEMENT TEAM

2.4       COMPANY LOCATION AND FACILITIES

2.5       GOALS AND FINANCIAL OBJECTIVES

2.6       FINANCING BUSINESS GROWTH

3          PRODUCT AND SERVICES OVERVIEW

3.1       PRODUCTS

3.2       SERVICES

4          MARKETING PLAN AND ANALYSIS

4.1       TARGET MARKET AND OPPORTUNITY

4.2       COMPETITOR OVERVIEW

4.3       SWOT ANALYSIS

4.4       UNIQUE SELLING PROPOSITION AND MESSAGES

4.5       LEAD GENERATION STRATEGIES

4.6       1 YEAR REVENUE FORECAST AND MARKETING PLAN

5          FINANCIAL PLAN AND ANALYSIS

5.1       START-UP COSTS (APPENDIX 2)

5.2       FINANCIAL HIGHLIGHTS (APPENDIX 3)

5.3       FIVE-YEAR PROFIT AND LOSS STATEMENT (APPENDIX 4)

5.4       FIVE-YEAR BALANCE SHEET (APPENDIX 5)

5.5       CASH BUDGETS (APPENDIX 6)

5.6       BREAK-EVEN ANALYSIS (APPENDIX 7)

6          APPENDIX/TABLES

If you want to dive into more detail than the above outline, I suggest downloading the Business Plan template from www.joergsieber.com, which provides more detailed guidance on how to write each section of a plan.

One word of caution: Don’t write the Executive Summary of the document until you have written all the other parts of your business plan. The purpose of the Executive Summary is to provide someone with a short and precise summary of the entire document. You simply cannot write this section until all the other sections have been researched and written.

2. Research, Research, Research

Now that you have develop your outline, it is time to start researching so you don’t write your plan without much needed data.

The first section you need to research is your own business. This research will come natural to you, depending on how many pieces of your business you already have in place. You need to be able to answer questions like What are the key historical milestones of your business? What is the legal structure of your business? What are the key strengths of your management team and why did you choose them? You should also provide a short overview of the company’s facilities as well as the products and services you offer.

The second section of your plan will by significantly harder to research. Here we are dealing with your Market, Competition and Market Opportunity. Answer questions like: Who is my target market? How big is the target market and the opportunity for my company? Who are the key competitors? What are their strengths and weaknesses? What are the key opportunities for and weaknesses of my business? How will I generate leads and new business? And finally, how will I be able to generate the leads I need to get the revenue I want?

Once you have done all this research, you should be able to generate the marketing section of your business plan.

Finally, you will move on to your Financial Section, which includes Profit and Loss Statements, Cash Flow Forecasts, Balance Sheets, and a section on key financial indicators. Here it becomes very important that you understand all the expenses associated with your Marketing Strategies. Please refer to the Step called “The Financial Section” to get a better understanding of this part of your business plan.

3. Be clear where you want to take your business

When Alice was lost in Wonderland she came to a fork in the road. At the fork was a tree and in the tree the Cheshire Cat. Alice asked the cat, which way she should turn. The cast asked “Where do you want to go?” Alice responded: “I don’t know.” The cat responded “Then any path will get you there.”

The same is true with your business. If you don’t know where you want to take your business, any path will get you there. It is important you determine the goals in your business when writing your business plan. Are you going to be the #1 in your industry in 5 years? Are you trying to achieve $xx by year 3? What is it you want to achieve with your company? If you write the plan for third party investors, let them know why it is important to you that you get the money from them.

4. Be realistic with your goals

I have witnessed many business owners who have set goals that were too lofty for their current situation. While investors want to see enthusiasm in you and your plan, they don’t want to see an unrealistic picture painted in front of them. As you develop the goals for your business, make sure you believe in them and have the back-up needed to eliminate most doubts with your investors.

There is no guarantee in business, and most certainly no guarantee that you will achieve your goals, but if you set goals that are believable you will increase your chances of success significantly. Keep in mind that what is “believable” to one person, may be completely outrageous to another. You will be walking in a gray area as you develop your goals for your business plan. It will be extremely beneficial if you can find out the comfort level your investor has towards risks.

5. The financial section

This section will look different depending on whether you have a startup business or an existing business. In general, investors will be very interested in past performance of existing businesses to see trends in their financial performance. With a start-up company it becomes very important to show solid forecasts that are based on reality and not “pie in the sky”.

In general, all business plans should include the following:

-         1 Year Cash Flow Forecast

-         1 Year and 5 Year Profit and Loss Forecast

-         5 Year Balance Sheet Forecast

-         Break Even Calculation

Existing businesses also should include the following information on past performance:

-         up to 5 years of Profit and Loss Statements

-         up to 5 years of Balance Sheets

It is of extreme importance to not only show the numbers in the tables to investors, but also to point out the key trends, milestones and financial ratios to them. Usually, this is achieved by attaching the actual forecast and financial reports in the appendix of the business plan and then summarizing the key data in the Financial Section of the actual business plan.

6. Back up your numbers

As you develop your financial forecasts, it is key to be able to back up each revenue number with a way to generate the revenue. It is for this reason that we usually recommend developing a “Leads and Revenue Forecast” for a 12 month period.

This leads and revenue forecast describes to investors how many clients you will need to generate your planned revenue. It then takes the next step and tells them how many lead generation or marketing strategies you will deploy to generate these clients. It is also a good indicator for yourself if your forecast is based on reality or not.

 7. Know your audience

If you write your business plan for a potential investor to raise capital it is very beneficial to know beforehand what this person is looking for in a business plan. In many interviews with banks and investors, we found that every person is looking for slightly different things when making a decision to loan money or not.

This focus is very often determined by the investors willingness to accept risk with his investment. Some banks are not at all willing to lend money to start-up businesses because of the risks associated with a start up company. Others prefer start-up businesses because of the potentially higher return on their investment.

Some investors limit their loans to a small amount, while others eliminate small loan investments from their portfolio. Some investors are more concerned with past performance and want to see solid profits for at least three years, while other are more concerned about the thoroughness of your market research and market potential.

In other words, it is tough to please everyone with your business plan. If you want to increase your chances for getting accepted by a potential investor, try to find a suitable avenue by simply asking beforehand what they are looking for in a potential client and what they are looking for in a business plan.

8. Have a Killer Executive Summary

The executive summary is the heart and soul of your business plan. It contains all the important information a potential investor needs to make a decision. It should be the last thing you write and contain the most important information from your plan within one or two pages.

Most loan officers or investors have dozens of business plans to read each week and will only glance at a business plan’s executive summary before making a decision to read on. It is therefore extremely important for you to get their interest during these first pages of your plan.

 Keep your sentences short, highlight important facts and numbers, and include the most critical information from each section in the summary.

 9. Be enthusiastic

You are the owner of your business and should be enthusiastic about it. If you don’t believe in your product, service or business, it will come across in your plan. So, be enthusiastic and convincing in the way you write your business plan. Investors will be more likely to provide you with your needed funding if they see your business is your passion.

This enthusiasm is even more important when you present your plan to the investor. Most investors, before making a decision will ask you to present your plan to them face to face. During this meeting you will need to come across believable, professional, and convinced of your ideas and plan.

 10. Prepare a Presentation

After writing your plan, make sure you are preparing a presentation to investors. As mentioned before, most investors want to see you in person before making a decision. This meeting is your chance to show your enthusiasm for your business and answer any additional questions from the investors side.

While it is not necessary to prepare a PowerPoint presentation for such a meeting, PowerPoint slides can provide you with the needed guidance for a presentation. Most business owners are not necessarily used to presenting in front of a group of people. In fact, studies have shown that presenting ranks right next to death on most peoples list of fears.

PowerPoint has the ability to help you get over this fear and give you an outline of your presentation. In your presentation you can use the same outline as you did in your business plan.

You should have some sort of handout for your investors. This could be the set of PowerPoint slides, or a simple list of key points of the business plan. Make sure your outline contains the key points from the business plan in easy to read English.

For more information or help on writing a business plan, please contact us at Sieber Consulting at www.joergsieber.com or e-mail us at joerg@joergsieber.com. We can help you develop the business plan you need for your target audience.

“Despite the ascendancy of social media, customers still prepare for purchase decisions using a combination of old media, new media, and old-fashioned conversations with friends and family. According to a March 2009 survey by Harris Interactive, the most common methods of gathering information prior to making a purchase are using a company website (36%), face-to-face conversation with a salesperson or other company representative (22%), and face-to-face conversation with a person not associated with the company (21%). 18- to 24-year-olds are more likely to use social networking sites than adults of all ages (16% vs. 4%). But they’re also more likely to rely on conversations with friends and family than all adults (33% vs. 21%).”

Source: The Harris Poll

Robert Ochtel Blog

1. The most obvious reason is to obtain funding from a potential investor or lender. Of course, any third party loaning money to or investing in a business wants to get a thorough background of your business and rest assured in the knowledge that you understand the market, the competition as well as the potential for success in the business.

2. The second reason is to write a business plan to help yourself find and maintain the direction you need in your business. There is no better way to fully understand your business, market and competition than by systematically going through the process of writing a business plan.

It is really surprising to me as a consultant to see how many business owners have no idea about who their competition is and how big the potential for their product or service really is. They simply don’t find the time to devote to writing a complete business plan. If that is the case, hire a third party to develop a plan for you, but make sure you play an integral part in the development of the document.

You see, a lot of people have the mindset that a business plan, once written will end up on a shelf collecting dust without ever being looked at again, and is therefore not worth the effort. But this is only one side of the story. The true value of the plan however is not in the plan itself, but in the research, the thoughts and the input the goes into the document. Just imagine how much you will learn about your business potential by developing a thorough, well-researched business plan. Again, I want to stress, that if you want to hire a third party for the development of your plan, make sure you stay involved in the process, so you can get as much out of the research as you possibly can.

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