Guide to Starting and Operating a Small Business | 2018 Guide to Starting and Operating a Small Business - Page 69

You may want to highlight the following elements within this section: • Market size and trends • Quantify available markets (number of potential customers, how much are they likely to spend in a given year) • Predicted annual growth rate of markets • Define your primary and secondary markets Customers It is important for a company to know exactly who they are targeting with their products/services, where the customers are located, why they are interested in the product/service, and when/how/why they will purchase the product/service. Describe your ideal customer in terms of their attributes or demographics (age, gender and income or business type, size and location) so that your selling approach will make sense to them. You may want to highlight the following elements within this section: • • • • Description of target market (who is your ideal customer?) Geographic area for target market (within 60 mile radius? nationwide?) Problem that company is solving for the market (what do they need?) Buying behavior (how often, how many products?) Decision making process (how much lead time, is it a group decision?) Competition Who is your competition? Competitors include other suppliers who provide similar products (direct competitors) as well as those who provide a product in the same general category (indirect competitors). For example, a retail video rental store competes with other video rental companies, and also with other f orms of entertainment such as movie theatres, HBO, etc.) How much of the market do your competitors hold? Who has the largest share of the market and what are their strengths and weaknesses? What is your competitive advantage against the competition? • You may want to highlight the following elements within this section: • Indirect & direct competitors? Who are they and where are they? • Competition analysis (what they do, how they do it, their strengths and weaknesses, how you might differentiate) • Market share held by competitors (or annual sales volume) Marketing/Sales Plan Your Marketing and Sales Plan needs to focus on the key characteristics of your target customers, their demographics and buying behavior, and their attitudes about your product. Why will a customer buy from you and not a competitor? Set realistic sales goals that recognize the size of your industry, the size of your target market, how strong your competitors may be, and your ability to produce the product. Understanding your customers will also help you determine your sales force and distribution plans. Does your product require a direct sales approach? Will customers feel comfortable ordering online? Do customers need to see the product before purchasing? How many contacts will they need before agreeing to purchase? Once you know your sales targets, you can plan your communications strategy around how many prospects you need to reach. Customers need to be aware of your company; and they have to want your product, have the ability to purchase it, and be satisfied with their purchase so that they will purchase again and also spread your name to others. Your advertising needs to include the media (such as print ads, radio, direct mail, billboards, events, publicity) that best reach your target market. And you will need to get the word out on a regular basis, so draft your communications plan onto a calendar, with regular communications activities throughout the year. Often, partnering with a company that provides a complementary product can open the door to a broad base of potential customers. (For example, a Subway Shop may open next to a gas station.) Pricing is an important part of your marketing mix. Estimate sales at various price levels. Investigate your target customers’ expectations about 67