Business Plans and Marketing Strategy
Business Plans and Marketing Strategy
Business Plans and Marketing Strategy
strategy
free business planning and marketing
tips, samples, examples and tools -
how to write a business plan,
techniques for writing a marketing
strategy, strategic business plans
and sales plans
Writing business plans and marketing strategy can
be simple.
See the free business plan and marketing plan sample/template.
Here are tips, examples, techniques, tools and a process for writing
a marketing strategy, business and sales plans, to produce effective
results. This free online guide explains how to put together a
marketing strategy, basic business plan, and a sales plan, including
free templates and examples, such as the Ansoff and Boston matrix
tools. New pages are being added soon on advertising, sales
promotion, PR (public relations) and press releases, sales enquiry
lead generation, advertising copy-writing, internet and website
marketing, in the meanwhile see the marketing tips page for free
marketing and advertising techniques and advice.
See also the simple notes about starting your own business, which
to an extent also apply when you are starting a new business
initiative or development inside another organisation as a new
business development manager, or a similar role.
Here's a free profit and loss account spreadsheet template tool (xls)
for incorporating these factors and financials into a more formal
phased business trading plan, which also serves as a business
forecasting and reporting tool too.
Adapt it to suit your purposes. This plan example is also available as
a PDF, see the Profit and Loss Account (P&L) Small Enterprise
Business Plan Example (PDF). The numbers could be anything: ten
times less, ten times more, a hundred times more - the principle is
the same.
Towards the end of this article there is also a simple
template/framework for a feasibility study or justification report,
such as might be required to win funding, authorisation or approval
for starting a project, or the continuation of a project or group, in a
commercial or voluntary situation.
If you are starting a new business you might also find the tips and
information about buying a franchise business to be helpful, since
they cover many basic points about choice of business activity and
early planning.
growing
market problem child (rising) star
mature
market dog cash cow
cash cow - The rather crude metaphor is based on the idea of
'milking' the returns from previous investments which established
good distribution and market share for the product. Products in this
quadrant need maintenance and protection activity, together with
good cost management, not growth effort, because there is little or
no additional growth available.
dog - This is any product or service of yours which has low market
presence in a mature or stagnant market. There is no point in
developing products or services in this quadrant. Many
organizations discontinue products/services that they consider fall
into this category, in which case consider potential impact on
overhead cost recovery. Businesses that have been starved or
denied development find themselves with a high or entire
proportion of their products or services in this quadrant, which is
obviously not very funny at all, except to the competitors.
problem child - These are products which have a big and growing
market potential, but existing low market share, normally because
they are new products, or the application has not been spotted and
acted upon yet. New business development and project
management principles are required here to ensure that these
products' potential can be realised and disasters avoided. This is
likely to be an area of business that is quite competitive, where the
pioneers take the risks in the hope of securing good early
distribution arrangements, image, reputation and market share.
Gross profit margins are likely to be high, but overheads, in the form
of costs of research, development, advertising, market education,
and low economies of scale, are normally high, and can cause initial
business development in this area to be loss-making until the
product moves into the rising star category, which is by no means
assured - many problem children products remain as such.
rising star - Or 'star' products, are those which have good market
share in a strong and growing market. As a product moves into this
category it is commonly known as a 'rising star'. When a market is
strong and still growing, competition is not yet fully established.
Demand is strong; saturation or over-supply do not exists, and so
pricing is relatively unhindered. This all means that these products
produce very good returns and profitability. The market is receptive
and educated, which optimises selling efficiencies and margins.
Production and manufacturing overheads are established and costs
minimised due to high volumes and good economies of scale. These
are great products and worthy of continuing investment provided
good growth potential continues to exist. When it does not these
products are likely to move down to cash cow status, and the
company needs to have the next rising stars developing from its
problem children.
After considering your business in terms of the Ansoff matrix and
Boston matrix (which are thinking aids as much as anything else,
not a magic solution in themselves), on a more detailed level, and
for many businesses just as significant as the Ansoff-type-options,
what is the significance of your major accounts - do they offer better
opportunity for growth and development than your ordinary
business? Do you have a high quality, specialised offering that
delivers better business benefit on a large scale as opposed to small
scale? Are your selling costs and investment similar for large and
small contracts? If so you might do better concentrating on
developing large major accounts business, rather than taking a
sophisticated product or service solution to smaller companies
which do not appreciate or require it, and cost you just as much to
sell to as a large organization.
customer matrix
This customer matrix model is used by many companies to
understand and determine strategies according to customer types.
produc
t1
produc
t2
produc
t3
produc
t4
totals
Do the same for each important aspect of your business, for
example, split by market sector (or segment):
sector
1
sector
2
sector
3
sector
4
totals
total
total
quantit average % gross sales or
sales
y value margin gross
value
margin
distributo
r1
distributo
r2
distributo
r3
distributo
r4
totals
1. You must estimate your tax liabilities and ensure that you set
aside funds to cover these liabilities while you are banking
your payments received into the business. The easiest way to
do this is to identify the taxes applicable to your business, for
example VAT and your own personal income tax and national
insurance. Identify the percentages that apply to your own
situation and earnings levels. You can do this approximately.
It does not need to be very precise. Add these percentages
together, and then set aside this percentage of all your
earnings that you receive into your business. Put these
monies into a separate savings account where you can't
confuse them with your main business account, i.e., your
'working capital' typically held in a current account.
2. Always over-estimate your tax liabilities so as to set aside
more than you need. Having a surplus is not a problem.
Having not enough money to pay taxes because you've under-
estimated tax due is a problem; sometimes enough to kill an
otherwise promising business.
Here's an example to show how quickly and easily you can plan and
set aside a contingency to pay your tax bills, even if you've no
experience or systems to calculate them precisely. This example is
based on a self-employed consultancy-type business, like a training
or coaching business, in which there are no significant costs of sales
(products or services bought in) or overheads, i.e., revenues are
effectively the profits too, since there are minimal costs to offset
against profits:
From this example you can see that setting aside 45.5% of earnings
(yes it's a lot isn't it - which is why you need to anticipate it and set
the money aside) would comfortably cover VAT and income tax
liabilities. To be extra safe and simpler in this example you could
round it up to 50%. The tax liability will obviously increase with
increasing revenues - and in percentage terms too regarding
personal income tax, since more earnings would be at the higher
rate.
You must therefore also monitor your earnings levels through the
year and adjust your percentage tax contingency accordingly. As
stated already above, the risk of under-estimating tax liabilities
increases the more successful you are, because tax bills get bigger.
In truth you will have some costs to offset against the earnings
figures above, but again for the purposes of establishing a very
quick principle of saving a fixed percentage as a tax reserve until
you know and can control these liabilities more accurately, the
above is a very useful simple easy method of initially staying
solvent and on top of your tax affairs, which are for many people the
most serious source of nasty financial surprises in successful start-
up businesses.
The above example is very simple, and is provided mainly for small
start-up businesses which might otherwise neglect to provide for tax
liabilities. The figures and percentages are not appropriate (but the
broad principle of forecasting and providing funds for tax liabilities
is) to apply to retail businesses for example, or businesses in which
staff are employed, since these businesses carry significant costs of
sales and overheads, which should be deducted from revenues
before calculating profits and taxes liabilities. Neither does the
example take account of the various ways to reduce tax liabilities by
reinvesting profits in the business, writing off stock, putting money
into pensions, charitable donations, etc.
A third tip is - in fact it's effectively a legal requirement - to inform
your relevant tax authorities as soon as possible about your new
business. Preferably do this a few weeks before you actually begin
trading. That way you can be fully informed of the tax situation -
and your best methods of dealing with tax, because there are
usually different ways, and sometimes the differences can be worth
quite a lot of money.
I do not go into more detail about tax here because it's a very
complex subject with wide variations depending on your own
situation, for which you should seek relevant information and advice
from a qualified accountant and/or the relevant tax authorities.