Every business requires an inscribed business plan which acts as guideline to the entrepreneur or to attract investors. A business plan is defined as a written document explaining the business nature, marketing and sales strategy and financial circumstantial that comprises projected profit and loss statement. A well drafted business plan consists of the following;
Executive summary- giving a snapshot of the business.
Company description- defining what the entrepreneur does.
Market analysis- Research on the business industry, competitors and the market.
Management and organization- The business structure and management.
Products and services- services and products offered.
Sales and marketing- how the business will be marketed and sales strategy.
Funds request- the monetary needs for the next 3 years.
The business plan is essential for the success of the law55 venture; however they are not fool proof and the entrepreneur should not include issues such;
Denying existence of competition- every business will have competitors.
Airing dirty stuff- Such as legal battles, previous disagreements with clients or staff.
Fibbing- exaggeration of financial or sales status can backfire.
Calculating future sales- prospective sales must not be calculated on the basis of potential market share.
Inserting complex product manual in the plan- investors don’t have time to read a massive pages of manufacturing manual on a product.
Importance of Market Plan
Without a marketing plan a majority of business would fail or have a tendency of slow growth. A marketing plant is a document that summaries the business marketing strategy for the coming month, quarterly or annually consisting of; overview of the enterprise’s advertising and marketing goals, explanation of the business present marketing position, timeline of strategy accomplishment, tracking of key performance indicators (KPIs) and outline of the business customer’s need and target market. The term marketing strategy and marketing plans are frequently used interchangeably as marketing plan is generated based on a predominant strategic context. In most instances, both strategy and the plan may be integrated into a single document especially for small businesses.
Marketing plan is a straightforward guiding document that governs future strategies of the firm with unique reference to its market development, product development sales promotion channels design and viability. Some of the benefits of marketing plan include;
Assist in preventing future uncertainties.
Assists in management by objectives.
For accomplishment of goals and objectives
Helpful in communication and coordination between departments and control.
Different Types of Price Strategies as a Company Progresses
There are four main phases of growth whereby each business develop through and they are named as follows; startup, growth, maturity decline/renewal. Each business comes across these phases at different moments and under diverse circumstances; hence identifying each phase of growth helps in determination of the next step to be undertaken. Pricing strategy denotes the technique firm’s use to price products or services whereby all entities whether small or big base their price on labor; production and marketing expenses then add some percentage to obtain profit. Numerous pricing strategies include; penetration, price skimming, discounting, product life-cycle and competitive pricing.
Penetration Pricing Strategy:
the enterprise sets low price of products and services hoping to build a market share, with the primary goals of garnering many customers.
Price Skimming strategy:
In this strategy, the business sets high prices in order to rapidly recover costs of its items production and marketing. The purpose is to obtain profit quickly.
Product life-cycle strategy pricing:
As all products have a life span, such as introduction, growth and maturity and decline phases, during the growth phase when the sales are flourishing, a small firm usually keeps the prices high.
Competitive-based pricing:
Products and services are kept low to tackle competitor’s prices. It is the best strategy when the difference between industry and products is negligible.
Temporal discount pricing:
A small business can use discount temporary to boost sales such coupons, cents-off sales, volume purchase and seasonal price lowering.
Basics of Selling and Customer Service
When the sales and customer service teams work together, there is creation of user-friendly buying experience and comfort to the clients. Sales teams aid customers to look for items and services, whereas customer service guarantees their association with the business remains positive all through. The collaboration between both teams develops long-term customer’s satisfactions and enhances word-of-mouth referrals for prospects leads. For efficient sales and customer service alignments, both departments should follow the following basics.
Salespersons must invest in client’s relations.
Customer services must be familiar with the sales procedures.
Customer service ought to exchange customer’s information and data.
Service representatives should detect opportunities to cross-sell and upsell.
Customer’s service representatives must deliver feedback.
Customer service has to generate customer’s referrals.
It is prudent for customer service to share client’s stories.
Sales have to work habitually with customer achievement.
The business environment has many facets; however selling is the most essential facet in the organization since selling is a service and no business can survive without sales.
The Importance of Financial Statements in Guiding a Business
Financial statements can be defined as written records that express the business activities and monetary performance of a firm. The financial statements are regularly audited by accountants, government’s agencies and company’s auditors to ensure accountability, tax and investing purpose. The most widely used financial statements include; income statements, balance sheet and cash flow statement. Financial statements are crucial since they show more than a snapshot of the business health and also can be used as a dominant management tool. A business owner or potential investors are guided by the financial statements to know the critical business metrics.
Furthermore, the statements act as powerful diagnostic tool to evaluate the company’s strong and weak point. Preparing financial statements for startup is challenging since most of the data is not actual but a forecast. Estimated amounts for startups can be awfully wrong giving a bad impression even if the entrepreneur is honest. Nonetheless I believe the balance sheet is the most important statement at the startup phase as it can show the current and long-term asset and liabilities on the onset.