Sections in a Business Venture Plan

Sections in a Business Venture Plan • Executive summary • Market analysis • Resource analysis • Operating strategy • Financial strategy

Section 1: Executive Summary • One or two page summary of the most important points in your plan • Intended to introduce the venture and to capture the attention of the reader • Your chance to make a first impression! • Opens with mission statement and then a description of the business

Executive Summary cont’d… • it appears at the beginning of the plan but cannot be written until all other sections are complete

Section 2: Market Analysis • Will your product satisfy the needs of the market? • Needs assessment/market analysis can help you identify potential customers, analyze your competition, set prices, and plan ways to advertise your venture

Register the Business Name • Make sure that no one else is already using the same name for a similar business • Only you can use it for legal/advertising purposes • Determine what kind of ownership you will adopt for your company

Knowing Your Market • WHO will be buying your products or services?

Knowing your Product or Service • Know it inside out! • Why is your product or service better than what the competition offers? • How easy is it for me to get the product or service? Exactly how much will it cost? • How does your company handle problems with the product or service?

Knowing Your Customers • Who are my customers and how do they fit into various demographic categories? • How did they find out about my business? • Where else have they purchased, or could they purchase products/services like mine?

Forms of Marketing Research • Surveys/questionnaires • Questions to ask • Observation: • sit and watch • Experimentation/product sampling • Try it out with a small group and see how it works

Marketing Research • Provides data about customers, products, services, prices, advertising, and consumer behaviour • Project future sales • Tell entrepreneurs what products or services are in demand, what the main features or characteristics should be, and how the product or service should differ from the competition’s • Help entrepreneurs refine and adapt their products or services to appeal to more customers

Primary Research • Interviewing people directly • Surveys, interviews, questionnaires

Secondary Research • Uses data that has already been collected by someone else. • Books, articles, web sites, etc.

Primary Research • Your questions need to • Motivate people to respond • Be easy to understand but not so simple that the questions lose their significance • Be brief enough to hold the attention of the respondent • Provide complete & accurate data • Give enough room to record answers • Be objective

Designing a Questionnaire for Primary Research • Statement of Purpose • Explain why you are doing the research and establish a positive relationship with the respondent • Questions • Get the perception of the customer on ideas such as price, quality, availability, etc. • Usually answers are given for them to choose from, but a few can be open-ended to get more information from them

Demographic Information • Demographics – M/F, age, income, job, education level, etc. • Thank You

Let’s Review • Explain the difference between primary and secondary research. Give an example of each.

Marketing Strategy • See handout

The Marketing Mix • Every marketing plan needs a target market and a good mixture of marketing elements. • The right combination of these elements helps differentiate your idea from the competition!

The 4 Ps of Marketing • Product • Place • Price • Promotion

Product (or service) • Is the product/service something customers will want to buy? • Will it be of benefit to them? • Will it meet their needs?

Place • How will the product get to the customer? • What channels of distribution are needed? • When should the product be in stock or ready? • Where will the product be made available?

Price • How much are customers willing and able to pay? • What is the best price to charge to earn a maximum profit?

Promotion • How will customers be made aware that the product or service is available? • Which of the following promotional activities will be best for this venture: advertising, personal selling, publicity, sales promotion, or e-marketing?

Confirming your Target Market • WHO will be the best people to sell to? • Target market: those individuals or organizations that are likely to want to use what you can provide

Market Segmentation • The group of people who share common characteristics that your market is targeted toward • Canada: • Different jobs, different access to internet, different lifestyles, needs, wants, behaviours • Range in age, income,culture (beliefs, understandings, morals, values, customs, habits)

People may be grouped in a segment because they: • Belong to the same culture • Have similar tastes and preferences • Share the same values or goals • Have the same socioeconomic background • Respect their group’s norms or rules of conduct

Think about for segmentation: • Demographics: • Sex, age, marital status, family size, family life cycle stage (single, married, divorced, no kids yet, kids, etc.)

Socioeconomic: • People of similar occupation, education, income, social class, or culture

Geographic: • People who live in regions of the country that could be defined by a specific climate, or by provincial/regional boundaries

Psychographic • Lifestyles or personality attributes • Behaviour patterns: • where/how often, when they shop, as well as media habits

Consumption patterns • People who can be identified by their knowledge about, and loyalty to, particular products or brands

What about….. • People who share the same birthday? • People with the same name? • People going to university right now? • People who are single parents and work full-time?

What about this? • Commercial

Where in the product life cycle is yours? • Introduction • Growth • Maturity • decline

PRICE - how much profit do you want to make? Total profit = total revenue – total cost Total revenue=price of each unit x qty sold

PRICE • Sometimes selling a large quantity will be more profitable, but not always • The best price to charge is the one that allows you to earn the maximum profit, not sell the most • Knowing what the customer is willing and able to pay is ESSENTIAL in determining the price

Price – Things to Consider • What does the customer perceive the value of the good or service to be? • Are there any similar products on the market? • What price is the competition asking?

Important to choose your pricing strategy well • See handout

With a small group: • Choose 2 products and 1 service. Determine what might happen if you use penetration pricing for these.

Promotion • Brings the attention of the target market • Market research helps determine the best method to use • Methods include: • Advertising, personal selling, publicity, sales promotion

Advertising • Message paid for by the venture and directed toward the target market • Purpose: to move customers through the AIDA formula

AIDA • Attention • Interest • Desire • Action

Different forms of media: • Newspapers, magazines, radio, TV, internet, direct mail, signs in/on transit vehicles, directories, outdoor billboards, text messages, digital messages, video games, apps and more!

How to choose? • The audience you want to reach • The number of people who will see the ad • The area to be covered • The budget • The suitability of the medium to the product or service and to the target market

Personal Selling • Having salespeople show the features of a product or service to meet the customer’s needs

Publicity • Unpaid message delivered by the media to the target market when the media decide that a product is newsworthy

Sales Promotion • Any activity undertaken to increase sales and support advertising • Coupons, giveaways, rebates, sweepstakes, coordinating with charities, bundled sales

Sections in a Business Venture Plan