Include backup suppliers. Although you can order from one, two, or three main sup-
pliers, suppose something goes awry and you can’t get an important component or
a piece of material to complete the production of your product. Show that you’re
prepared to deal with these issues by including the names and contact information
of alternate suppliers.
Remember to add any sourcing documentation
to the Appendix of your plan, including con-
tracts with important suppliers, standard cost
breakdowns, bills of materials, and other infor-
mation.
You should also describe how you would deal
with a sudden increase in orders. It has been
known to happen. You might underestimate
the popularity of your product with consumers.
Or USA Today might have done a story on your
product and you are swamped with orders. This happened to a company of mine.
We were producing and selling our own brand of personal computer. Our tech
department sent it into a very popular computer magazine for review against 20 or
so other brands. To our surprise, not only did we get a good review but our computer
was chosen as a top pick. Orders jumped immediately after the magazine hit the
newsstands. We were lucky our suppliers could meet the sudden demand for parts.
Next to consider and describe in this section of your plan are any technology issues
your business can be confronted with. Mention to the reader what types of technol-
ogy are required to produce your product. Explain whether you have that technol-
ogy in your company and/or whether it is readily available from somewhere else.
Finally, describe the inventory management requirements to produce your product.
Fully explain and describe the technical and physical infrastructure you require to
manage the production and storage of the product and the components or materials
that go into producing it.
70
Write a Business Plan In No Time
As for the sourcing of
existing product from
vendors or distributors, this is an opportu-
nity,if you are writing an internal plan,to
review your sourcing strategy and whether
you can improve your product by changing
the sourcing of your product.
note
\
Things You’ll Need
List of vendors and suppliers
Contracts, cost breakdowns, and other sourcing documentation
Write the Plan!
As you can see, the Product or Service Description section is a very important part of
your plan. The bottom line is that you must sell the reader on your product as well
as sell her on your plans and capability for selling it. As you write this section of
your plan, think hard about the answers to the following questions, as they apply to
your type of plan—startup, full, or internal plan.
Startup Business Plan
Answer these questions to describe what your business sells:
1. What is the name of your product or service?
2. Briefly describe the nature of your product or service in terms the average
reader can understand.
3. How long has your type of product or service existed in the marketplace?
4. What is the target market for your product or service?
5. If you are providing a service, why can you provide it, how do you provide it,
who does the work, and where is the service performed?
6. Are you providing a combined product and service? How do you do this?
Who does each part?
7. What is new, exciting, or different about your product or service?
8. Can you supply any market experience with your product or service?
9. Do you have photos or graphics of your product you can include in your
plan?
10. Does your product require any additional support after the sale? How do you
provide it?
11. Do you see any spin-off or add-on opportunities?
Answer these questions to describe the features and benefits of your product or
service:
1. What are the special features of your product or service?
2. What benefit to the consumer can you deliver?
3. What specific problem does your product or service address and how is that
problem solved?
4. What makes your selling position unique?
5. Do you position your product or service on price, promotion, packaging, or
placement?
6. What can your business provide a consumer that no one else can?
7. Why would a consumer buy your product or service rather than a competi-
tor’s? Does it save time, reduce cost, or offer large savings? Can you deliver it
faster? Do you provide better service? Is it more economical, easier, or simpler
to use?
Answer these questions to describe your customers’ motivations to buy and how your
product/service meets a human need:
1. What is the consumer motivation to purchase your product or service? The
need for information? A quality product? A secure and convenient way to
buy? A great deal? Entertainment? Filling a social need of human interac-
tion?
2. What human need does your product or service fill? Can you describe your
product in terms of physical, safety, belonging, or esteem needs?
CHAPTER 5 Describing Your Product or Service
71

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