Is Your Business Plan Missing Something?
Recently, I was asked to judge a business plan competition sponsored by a local incubator. Because my passion is helping start-ups get up and running successfully, I was happy to take part in the judging and share my viewpoint and experience as a marketing professional with this group of entrepreneurs. Most of the competitors had a technical or scientific background, and while they had developed innovative products or technologies, very few of them included a definitive marketing strategy in the business plans they presented.
That’s a mistake that’s fairly common for start-ups and it can have a big impact on your company’s success in the marketplace. Many entrepreneurs think of marketing only in terms of advertising, but there’s much more to strong strategic marketing plan. Here are some of the key marketing components that should be part of every business plan.
Understand the market. When you’re seeking venture capital or other funding for your start-up, one of the first things investors look at is the potential market for your product or service. You need to assess the size of your target audience, but you also need to discover whether they are likely to purchase what you’re offering. This is where market research is vital. You’re vetting the viability of your product and gathering the data to support your projections about its market potential.
It’s smart to do both qualitative and quantitative market research. Qualitative research provides you customer insights that can help refine your value proposition and provide you with quotes and testimonials that add color to your business plan. Quantitative research, however, is the more important element. It gives you the data to prove that there is market demand for what your company is selling. One way to gather that data is through a survey, but not all surveys are created equal. It’s important that you have a big enough sample size (usually 100 people minimum). If possible, enlist someone with market research experience to help you develop and do the survey to ensure that is objective and not leading.
Build your value proposition. Your value proposition is the strategic framework on which you build your marketing communication plan. You need to develop a clear, concise value proposition that speaks to your target audience in language they can easily understand and relate to. If you’re selling a new medical technology directly to patients, for example, don’t use jargon and a lot of technical language. Your value proposition should explain how your product fills a need or solves a problem for potential customers. It also differentiates your product from everyone else’s. You need to be able to support the claims you make in your value proposition with proof points.