Once you know what business you are in, it’s time to figure out who’s going to buy from you and why.  You are just someone with an idea until you develop a business plan. In other words, if you haven’t written your plan yet, your business is still in the fantasy stages.  

In Part II, of how to write a business plan, we get to the heart of the matter about your business your marketing analysis and your marketing plan. You will now need to define your target customer, niche, competitive analysis, the secret sauce or differentiator and how you are going to tell the world you are open for business.  Most importantly, you will need to know how much money you’ll need to do that.

Your Marketing Plan should answer the following questions:

• What is/are your product(s) or service(s)?
• Who is the target market customer?
• What is your placement strategy?
• How will your product or service be distributed?
• How will you price your product or service?
• How will you promote your product or service?
• What are your budgetary needs to execute your marketing plan?

This information is a key part of your business plan. In fact, it is the foundation upon which you build your business. Anyone who reads this part of your plan will not only understand who’s buying and why, but also your plan to get sales, your pricing strategy, profitability and projected growth.

Market Analysis   The market analysis starts with a market summary outlining the business opportunity, then drills down what share of the market you believe you can capture. Then determine how much each customer segment is worth to your business in terms of revenue. It should also include a trend analysis which is about your industry and where the market is going. Is it growing or shrinking? The reasoning is that if you are not in a growth industry you need to understand how long you can pursue your business strategy before the market moves or is saturated. Then you need to identify and explain your target customer and the market segments you plan to reach. When identifying your target market, you should make sure you have three things:

a) Meaningful – you need to know the problem you will solve, and be a real solution.

b) Sizable – you need to make sure the piece of the market you want is large enough to turn a profit.

c) Reachable – you must make sure that you have the resources to reach your target audience.  Remember, your network is your net worth when starting a business.

Who’s the Competition?  Your customer’s need is already being met somehow. Describe your top three competitors and discuss their strengths and weaknesses. Then explain why their customer will buy your product or service over theirs.

The Customer Profile  Identify your customer is in painful detail. Your description should enable anyone to see the face of your customer. Based on this information, you can now create a strategy on how you plan to market to each customer segment. Your sales plan should also be a part of this section of the business plan.

The Niche  Webster’s Business Dictionary defines a niche as a “particular market or specialty area where a company finds it profitable to concentrate its selling efforts. Niche marketing offers a concentration of clients in an area of limited competition. You have limited time and resources as a start-up small business, so you need to pick a lane and be disciplined enough to stay in your lane.

So in other words, there are thousands of graphic design firms out there… what specific market will you serve exclusively? Will it be small business, nonprofits, educational institutions, etc?

What Is Your Signature Move?  Michael Jackson was famous before he became a solo artist, but once he did the moonwalk on stage during Motown 25, he became the King of Pop.  What is your moonwalk?  Defining your secret sauce or signature move will enable you to stand out in the market place.  A signature move could be uniforms, an extra free service, how you say thank you, a discount coupon for the next time. Here’s a great example, a funeral home sending a gift clock to a bereaved family with the inscription “Always remember the good times.”  People will always remember how you made them feel while doing business with you.

Marketing Budget  Now that you know who you are selling to, your niche, and signature move, you need develop a budget to execute your marketing plan.  Once you have a 30-day revenue goal, you need to determine how many sales leads you need to generate to hit that number each month. Then you need to figure out how many resources you need to put those leads in your pipeline (website, sales people, call center, tradeshow, facebook ads etc.)  That’s the easiest way to develop your marketing budget.

If you are someone who would like to read further about writing a business plan here’s two books I suggest:  Plan As You Go Business Plan by Tim Berry and The Successful Business Plan by Rhonda Abrams are quite good. 

Next week in Part III, we’ll deal with the operations, budget and financials projections.

How is this series on How to write a business plan working for you? Need a Part I refresher?

Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business experts. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure.  As CEO of MFE Consulting LLC, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. She has been featured in the New York Times, Washington Post, Entrepreneur, Wall Street Journal and Black Enterprise Magazine. She hosts #SmallBizChat weekly on Twitter for emerging entrepreneurs and publishes a resource blog www.succeedasyourownboss.com  Melinda is also the author of the national bestseller Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works. (Adams Media 2010)