Business plan section structure; Market
Customers of business plans who have not watched the recording of our business planning seminar on TV "Success" call our company and ask us to explain the rules for drawing up a sales plan in a business plan.
Consider this issue from the perspective of the theory of constraints. What restrictions will affect the sales plan of the future enterprise?
If a product (product, service) already exists on the market, the base indicator for determining the market capacity is the volume of sales for the previous period. To this must be added the projected consumption dynamics.
If you have new ideas for selling an existing product (for example, selling to new consumer groups), you can also take this into account when calculating the market size. Finally, if the product is not on the market, to calculate the market capacity, you need to assess the market demand for a new product
However, the size of the market will in any case be the most important limitation for drawing up a sales plan when planning a business.
The market capacity calculated in clause 1 will be shared with your business by competitors. You can take your market share by increasing the market capacity (see item 1) or by pushing out your competitors. Many people are interested in the question: how to determine this share? In general, this is not an easy question and requires an analysis of a large number of market factors. A simple example is the calculation of the market share of an online store.
Before drawing up a sales plan for a business plan, test the key queries of your online store in search engines. For each request, you will receive a list of future competitors. With the help of services available on the Internet, you can estimate the advertising budget of each of the competitors. Your advertising budget should be at least as large as the budgets of the competitors you want to get ahead of the search results.
Thus, the activities of competitors is another limitation for drawing up a sales plan, if your financial possibilities are not unlimited.
Amount of funding
Marketing plan (marketing plan, marketing plan) is a document that is the most important component of the company's strategic plan, which sets the company's market goals and suggests methods of achieving them.
A marketing plan, on the one hand, is like a map - it shows where the company is heading and how it is going to get there, on the other hand, a marketing plan is a document that fixes the resources required to achieve marketing goals - the plan is used to describe used marketing resources to achieve marketing goals.
A marketing plan is both an action plan, a cost plan and a written document (source: marketch.u)
An example of a marketing plan for business development A marketing plan for DUPLEX brand, company X
Company X's DUPLEX marketing plan is a strategy to enter the contraceptive market and achieve significant sales of 2 million packs per year. The planned indicator of product sales is $ 2 million. / P>
Means of achieving the planned indicators - a successful pricing policy, principles of product distribution and a completely new concept of an advertising campaign aimed at target groups of consumers and consisting in the formation of awareness of the promoted condom brands, creation, management, positioning and brand promotion.
The condom market is quite active with annual sales of 8 million units. products per year, with a total population of 3572.7 thousand people (2021 data).
Market capacity is practically equal to the volume of sales (Market size = 924556 (number of consumers of this product) * 8.7 (average number of goods consumed by one consumer per year). This is the real number of consumers that firm X can identify, attract and retain profitably.
But with all this, there is a fairly serious level of competition from the currently existing brands that are firmly established in the market and in the minds of consumers, such as, for example: MASCULAN, INNOTEX, DUREX, CONTEX, LIFE STYLES, etc.
Each competitor has a specific strategy and niche in the market. For example, MASCULAN offers at least 10 types of condoms of different series for each target consumer in an acceptable price range.
Today, about 40% of the population use various types of contraceptives, including condoms.
The survey of the population shows that, despite some inconveniences of its use, the majority of the respondents still prefer the use of condoms as a form of contraceptive.
According to a study by Hungarian scientists, 74.3% of the respondents, with an average age of 16 to 35, prefer condoms as a means of protection against HIV infections and premature pregnancy.
Before continuing to get acquainted with the sixth element of the instruction "How to draw up a business plan" according to the Entrepreneur-Pro version, let us remember what we have already prepared. So, we have prepared a "Cover Sheet", "Content and Summary", "About Business and Company", "Product Description" and "Business Model Description". It's time to take advantage of our analytical skills. We come to a very important part of our business plan.
Market and industry analysis will provide a bridge for the practical entry of products and / or services to market. Here we will try to briefly outline the basic scheme for carrying out this analysis.
What should be included in market and industry analysis?
As with any other section of a business plan, it is advisable here to provide an introduction to what will be contained in it.
This subsection should answer the following questions:
- Which industry is the business?
- What is the history of the industry?
- What are the trends in the industry?
- Who are the buyers in industry?
- Who are the competitors in the industry?
- Who are the suppliers in the industry?
- What products and services are offered in the industry?
This is how the execution key for this process looks like.
1. First, you need to determine the industry in which the company and the business itself are located. The all-Russian activity classifier will be useful in this matter.
2. Then you need to give a quick overview of the industry:
When organizing a business, every entrepreneur aims at success, which is based, first of all, on a stable financial income from the activities. However, in order for a private business to be profitable, a novice businessman must know the supply and demand for specific goods and services, the level of competitiveness, and also be able to analyze the existing market, making a correct forecast of its development in the short and long term.
The first thing to do is to draw up a business plan that reflects the characteristics of the market and where you can calculate how profitable the business will be.
A business plan is a document that is drawn up by an entrepreneur independently or ordered from experienced marketers, which reflects the current market situation in a particular trade sector. The importance of a business plan should not be underestimated, since it is on its basis that a private entrepreneur carries out specific actions, therefore, the risks and the ability to competently organize their own business directly depend on the accuracy and objectivity of the information in the business plan.
Important! Correct market assessment is half of the success in business, so research and analysis must be done especially carefully.
Many aspiring entrepreneurs have the question of how to assess the market, where to start research and what financial instruments to use? The first thing to do is to determine the most suitable niche for the future business, that is, to find an area in which a person can actively express himself and organize a business with maximum profitability.
It is not necessary to be limited only to trade, since today the service sector is developing extremely actively. When analyzing the market, special attention should be paid to the following issues:
- Level of competition;
- Target audience - who will use the services or goods ?;
- Location of the outlet;
- Range of products offered;
- Analysis of suppliers from which the entrepreneur will purchase goods;
- Taxation system;
- Representation of goods (shop, stall, rental in a large shopping center).
You need to understand that business plans for the agricultural and construction market will be completely different, so it is important to decide from the very beginning what industry a person wants to work in. For example, for food products, it is important to pay great attention to the issues of delivery, storage and quick sale, since with idle or no demand there is a high risk of product spoilage.
How to draw up a business plan?
Any business plan must be executed correctly and here great attention should be paid to correct presentation and consistency. It is printed on A4 sheets, after which it is necessarily stitched. The document has a clear structure, where there is a title, table of contents, main part, conclusion and annex, where economic miscalculations and justifications are made.
A business plan is drawn up for any type of business: for a coffee shop, bakery, gift shop, grocery store, and so on. At the same time, the description of each of them will be its own, reflecting the specifics of a particular business, which is important to understand for everyone who is going to engage in private entrepreneurship. To study the market in a business plan, the priority is to analyze the following:
- Identification and analysis of potential competitors;
- Seasonality of sale (constant, variable);
- Best points for sale (location of trays) ;
- Target audience (buyers).
Often people have a question, how to identify and highlight the most significant points in the business in terms of? How to carry out all the necessary economic and marketing calculations? This and much more will be discussed in this article.
The correctness of the development of the company's strategy and development potential directly depends on the quality of the analytical study of the external environment, which is a set of partners, competitors and consumers of the products of a business project, which appear in the given geographical limits of the market. For a visual presentation of information about the market capacity and the expected share of consumption, for the entrepreneur himself and potential investors, the marketing (from the English market - market) section of the business plan is used.
Development structure and sequence
The necessary elements for analyzing the consumer perspective of the offered product or service, which characterizes a particular market, are:
- Pricing methodology.
- Demand capacity research.
- Logistic scheme of product sales.
- Ways to promote and popularize the product.
- Methods of motivating buyers.
- Maintenance of the product after implementation.
- Formation of the image of the product and the company - the seller.
How to determine the acceptable selling price
A product or service will be able to enter the market only if their production and sale are at least break-even, in this case the business pays off by continuing to occupy a fixed niche. Ideally, the selling value should not only cover costs, but also be profitable enough to meet investor expectations and increase sales, while meeting the expectations of most consumers and allowing you to compete with other market participants. The price will never be able to satisfy all three requirements, therefore, when pricing, you have to give preference to one of the directions:
- Cost-effective, profit-driven.
- Consumer, demand-driven.
- Competitive, aiming at crowding out other market participants.
There are also synthetic techniques that combine features of two different directions with less effect in each of them.
Cost based price
The most obvious solution to the question of setting a price is to add a premium to the costs that suits the entrepreneur. It is on this principle that all costly pricing methods are based, focused mainly on the intra-firm environment and poorly adapted to market fluctuations. You can research the required price level [P] using one of the following methods:
1. Calculation based on total costs, which consists in adding to the total cost [TC] a share, which is the rate of return [r] and provides a profit based on total costs.
P = TC + TC * r = (1+ r) * TC