The Marketing Plan

Marketing plays a vital role in successful business ventures. How well you market your business, along with a few other considerations, will ultimately determine your degree of success or failure. The key element of a successful marketing plan is to know your customers -- their likes, dislikes, expectations. By identifying these factors, you can develop a marketing strategy that will allow you to arouse and fulfill their needs.

Identify your customers by their age, sex, income/educational level and residence. At first, target only those customers who are more likely to purchase your product or service. As your customer base expands, you may need to consider modifying the marketing plan to include other customers.

Develop a marketing plan by answering these questions. Potential franchise owners will have to use the marketing strategy the franchisor has developed; however, it should be included in your business plan and contain answers to the questions outlined below.

Who are your customers? Define your target market(s).

Are your markets growing? steady? declining?

Is your franchise market share growing? steady? declining?

Has your franchisor segmented your markets?

Are your markets large enough to expand, depending on franchisor restrictions?

How will you attract, hold, increase your market share? Will the franchisor provide assistance in this area? Based on the franchisor's strategy, how will you promote your sales?

What pricing strategy, if any, has the franchisor devised?

1. Competition

Competition is a way of life. We compete for jobs, promotions, scholarships to institutes of higher learning, in sports -- and in almost every aspect of your lives. Nations compete for the consumer in the global marketplace as do individual business owners. Advances in technology can send the profit margins of a successful business into a tailspin causing them to plummet overnight or within a few hours. When considering these and other factors, we can conclude that business is a highly competitive, volatile arena. Because of this volatility and competitiveness, it is important to know your competitors.

Questions like these can help you:

Who are your five nearest direct competitors?

Who are your indirect competitors?

How are their businesses: steady? increasing? decreasing?

What have you learned from their operations? from their advertising?

What are their strengths and weaknesses?

How does their product or service differ from yours?

Start a file on each of your competitors. Keep manila envelopes of their advertising and promotional materials and their pricing strategy techniques. Review these files periodically, determining when and how often they advertise, sponsor promotions and offer sales. Study the copy used in the advertising and promotional materials, and their sales strategy. For example, is their copy short? descriptive? catchy? or how much do they reduce prices for sales? Using this technique can help you to understand your competitors better and how they operate their businesses.

2. Pricing and Sales

Your pricing strategy is another marketing technique you can use to improve your overall competitiveness. It may be a good idea to get a feel for the pricing strategy your competitors are using. That way you can determine if your prices are in line with competitors in your market area and if they are in line with industry averages.

Some of the pricing strategies you may use, depending on the type of business, are:

retail cost and pricing

competitive position

pricing below competition

pricing above competition

price lining

multiple pricing

service costs and pricing (for service businesses only)

service components

material costs

labor costs

overhead costs

The key to success is to have a well-planned strategy, to establish your policies and to constantly monitor prices and operating costs to ensure profits. It is a good policy to keep abreast of the changes in the marketplace because these changes can affect your competitiveness and profit margins.

3. Advertising and Public Relations

How you advertise and promote your business may make or break your business. Having a good product or service and not advertising and promoting it is like not having a business at all. Many business owners operate under the mistaken concept that the business will promote itself, and channel money that should be used for advertising and promotions to other areas of the business. Advertising and promotions, however, are the life line of a business and should be treated as such.

Devise a plan that uses advertising and networking as a means to promote your business. Develop short, descriptive copy (text material) that clearly identifies your goods or services, its location and price. Use catchy phrases to arouse the interest of your readers, listeners or viewers. Make sure the advertisements you create are consistent with the image you are trying to project. Remember the more care and attention you devote to your marketing program, the more successful your business will be.

Getting the Cash Needed to Starting a New Small Business. Now that You have calculated your initial financing requirements, where
will you receive the money? The first source is your personal savings. Then relatives, friends, or other people might be found who
are willing to"venture" their savings in your company. Before getting too big a share of cash from external sources, remember you
should have private control of enough to guarantee yourself ownership.

After you can show that you have carefully exercised your fiscal Prerequisites and can demonstrate experience and integrity, a
lending institution may be willing to finance part of your operating requirements. This could possibly be done on a short-term
basis of from 60 days to up to one year. Any institution that has money to give is primarily concerned with safety. The security
may be a business advantage, but when you're just starting the ideal security is usually your house or any other private asset.

The next thing that the lender will want to see is some sort of Business plan. If you finish a business plan - which includes a
cash flow forecast - that the lender will see you have done some realistic and serious thinking about your company and be more
inclined to consider your request.

Become acquainted with your banker. In picking a banker consider Progressiveness, attitude toward your company, credit services
offered, and the dimensions and management policies of the lender. Is your bank innovative? The physical appearance of the bank
may provide you some indication. When the employees are pretty youthful, interested in your problems and active in civic affairs
the bank is very likely to be innovative. The nature of the bank's advertising may also be an indicator to its progressiveness.

To succeed the banker should be interested in helping you to Become a better manager, and build a continuing relationship which
will mean rewarding business for you as well as the lender through the years.

Will the lender offer you the type of credit you want? For example, If seasonal accumulations of inventory become an issue will
the lender create a loan against field or public warehouse receipts? If your capital is tied up in accounts receivable throughout
your heavy selling season, will the lender accept these receivables as collateral for a loan? Will the bank consider a term loan?

In the end, understand the dimensions and management policies of the lender. Will Your maximum requirements fall nicely within the
bank's"legal limit"? If you intend to do some export business, does it have a foreign exchange department? In the event that you
or your dealers sell on installment terms does the lender have facilities for managing installment paper? How deeply is the bank
concerned with the rise and prosperity of your local community?

When you deal with your banker, sell your self. Whether or not you Want a bank loan, also make it a practice to stop by your
banker at least once every year. Openly discuss your plans and problems. It is the bank's company not to betray a confidence. If
you require financial assistance carefully prepare, in written form, complete information that'll present a comprehensive
understanding of your entire proposition. Many business-people or potential business operators ruin their chances of obtaining
financial aid by neglecting to present their proposition properly.

Trade creditor or equipment manufacturer, Companies from which you Buy equipment or merchandise may also provide capital to you in
the kind of extended credit. Manufacturers of store fixtures, cash registers, and industrial machinery frequently have financing
plans under which you might purchase on an installation basis and pay from future income. You need not cover the goods at once. If
products are for resale, no security aside from repossession rights of the unsold goods is involved. However, too extended a use
of credit may prove expensive. Usually cash discounts are offered if a bill is paid in 10, 30, or 60 days. By way of instance, a
term of sale quoted as"2-10; net 30 days" signifies that a cash discount of 2 percent will be awarded if the bill is paid within
10 days. If not paid in 10 days, the whole amount is due in 30 days. If you don't take advantage of the money discount, you're
paying 2% to use money for 20 days, or 36 percent per year. This is high interest. Prevent it.

Among the main causes of failures among companies is Inadequate financing. Should you go into company, remember it is your
obligation to provide, or obtain from others, sufficient money to provide a firm foundation for the business.

Sharing Ownership With Other People. Now that you have decided what Business to begin and about how much funds will be required,
you may find it necessary to join with one or more partners to launch the enterprise.

If you lack specific management or technical skills that are of Major value to your chosen business a spouse with these skills may
prove a most satisfactory way to cover the deficiency. If you are very proficient in your special area but lack direction training
and abilities, you might look for a partner using a background in management. If you may need more start-up money, sharing the
possession of this business is 1 way to get it. Fantastic care ought to be taken in deciding upon a partner. Personality and
character, as well as ability to render financial or technical aid, affect the achievement of a pa333ship.

A partnership may be a mixed blessing. A partner who puts in time Or cash has got a right to expect a share in conducting the
business.

In a partnership the liability for the debts of the firm is Unlimited, just as it's in one proprietorship. Therefore, the owners
are Personally responsible for the company's debts, even in excess of the amount that they Have invested in the business. In a
corporation the liability of the proprietor is limited To the amount they pay for their shares of stock. A partnership, like one
proprietorship, lacks continuity. Thus, the business terminates upon the Death of the owner or a spouse, or upon the withdrawal of
a partner.

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