We've all heard it, to start a business you need to have a detailed, point-by-point business plan. What would you say if I told you that's not exactly true? The need for a business plan is far more nuanced than the standard paradigm.
Sure business plans are fantastic, but it may surprise you that you don't necessarily need them. Unless of course you're trying to get financing from a bank or potential investors. They are the ones who keep your "typical" business plan front and center of new business owners.
But, unless they are requiring it, you likely don't need one: This is what we call The Business Plan Fallacy. We refer to this article almost daily when interacting with current and potential clients. Let's walk you through what we mean by that!
If you're not planning on securing some sort of banking or other typical investments, there's a good chance you'll spend hours upon hours pulling together ideas and numbers for you to look at it once, maybe show a couple of friends, and then shove it in a filing cabinet in a deep, dark corner - never to be seen again.
That being said, planning isn't all bad. In fact, if there's one piece of a typical business plan you should worry about and take time to piece together: the marketing strategy portion.
A marketing plan is an operational document that outlines strategies for advertising and implementation of ideas to generate sales and reach a specific target market.
Unlike the full plan, the strategic marketing section is more than just a boring document, that honestly, you'll never look at. In fact, when you prepare your marketing strategy, you're not only providing a greater sense of focus and clarity to your business goals, but you're ultimately working towards more effective use of resources and consistency.
Overall, a great marketing plan improves decision-making and drives your business towards higher levels of success.
Let's dive a little deeper and see why marketing plans are number one in our book and expose The Business Plan Fallacy!
A Marketing Plan Provides Focus
Focus means having a clear, visible definition. When an owner loses sight of their business, this lack of focus can lead to less productive teams, misguided tasks, and a general lack of understanding of what is actually going on. Businesses need focus to deliver the best possible product or service at the greatest possible efficiency.
When you craft a marketing plan, you will look at both internal and external factors impacting your industry. These factors will play varying roles within your business, some will prove to be opportunities, while others might be weaknesses you can't ignore.
All in all, a marketing plan aims to define these items and point them out to you, so you're better able to 'see' your business. Breaking down the ups, downs, and all arounds allows you to have better vision for navigating your business.
While a full fledged business plan also assists in this area, many of the items that truly matter are housed within the marketing strategy portion. Competition, pricing, demographics, etc. are what you need to know most to effectively market your small business.
Manage Your Resources More Effectively
A marketing plan's primary purpose is to point out your strengths and weaknesses as a business. This will ultimately allow you to more effectively manage your energy and resources towards things you are naturally good at and maybe stop wasting time in a space that's just not working as well because of a weakness.
You might also find that you're pouring resources into sections of your business that can just as effectively, if not more effectively, run on its own. The internet is full of great automation tools that can help put some of your business functions on "auto-pilot," while you tend to areas of your business that may need a little more love.
Your marketing plan is also a good tool to map out your resource use based on the priorities you signal out during the development process. It presents itself as being a good staging area for documenting the resources at your disposal and then aligning them to where they would do the most good.
There are portions of a full business plan that can provide some help here, but those items will likely be dated at the time of any marketing decisions. Items such as budgeting for marketing or manufacturing for example. Your marketing plan is far more dynamic in nature, giving guidance rather than flat numbers.
Betters Your Decision Making
The more information you have, the better decisions you can make - it's really that simple!
To properly and effectively craft your plan, you must ensure that you are being diligent to acquire all the available information. One of the strengths of this process is to provide you a reliable resource with the 'big picture' of your business' landscape.
However, it is absolutely crucial that you are being honest. Small business owners, and even some C-Suite execs (See: Kodak), often fall victim to being blind to weaknesses or competition. In order to maximize the benefits to making informed, educated decisions you must be confident in your initial analysis.
A well-written marketing plan not only analyzes the functionality of a business, but it calls on you to make an action plan to improve any pitfalls in the business. We, as business owners, can then break this action plan down into small, actionable steps towards the bigger picture.
Whereas your full business plan speaks in terms of mission and vision, i.e. more philosophically, your marketing plan has actionable information within. It's great to know why you think your business is awesome, but I would rather know the actual game plan of how I plan to convey that awesomeness to potential customers. Your marketing plan has got you covered!
Ensures Consistency in the Business
Consistency is key for a business and its team. It ensures everyone is on the same page and that they all have the same goals for the business.
A marketing plan will not only point out the steps to take towards this goal, but everyone can refer to the big picture and their specific action steps required to get there.
A powerful, yet simple, example of this in practice is the creation of a brand guide within your plan. A brand guide truly is simple in its content, but monumental in its impact on your business.
What it contains are the basics of how you would present yourself to the world. Items such as your logo, its colors, size, and even its orientation (Example: do you stack the words in your business name or lay them on one line?) are all part of the consistency in how you communicate your brand to your potential customers.
By default, a standard business plan needs to be unreliably changing. Things like mission and vision might be stalwart, but other item like financials etc. can change in an instant. Not to say you shouldn't pay attention to financials, but writing them down in a plan doesn't have the impact some claim. A marketing plan does!
Gives You Business More Clarity
Just like consistency, clarity is important for a business. Clarity is distinctly different than focus in terms of its business function here. Where focus helps you understand the general map of the business landscape, clarity helps ensure that every part within your company has a clear understanding.
Clarity's impact becomes more tangible once you have more than one person on your team. For instance, image you have a person on your team that is tasked with crafting the next print advertisement for your business. Every business owner with employees knows that even the best of employees tend to produce less efficient deliverables if left to their own devices. However, with your marketing plan in hand that employee will now have the clarity of what message to craft along with how to go about designing that ad.
Another simple example: perhaps you're being presented a proposal to invest in a discount mailer such as Money Pages or Mint Magazine. While these tools have great power for some businesses, you refer to your marketing plan for which you have a detailed analysis of your target demographic. Through your plan you are reminded that your ideal customer is middle aged wealthy households (Focus). This particular demo is one of the least likely to take advantage of a budget saving periodical. Your plan has thus granted you the clarity to know that this investment would not likely produce the return that these funds could produce elsewhere.
Clarity goes hand-in-hand with marketing plans... it's literally a Compass to get you to your destination of success!
So, how do you actually create your marketing plan?
Step One: Define Your Business
Start by listing out what you do and the strengths and weaknesses of the business. You'll want to include EVERYTHING, even if you're unsure. Treat it as a stream-of-consciousness writing exercise; let every thought, worry, or fact flow. Seriously, everything!
Once you've created a comprehensive list, start by separating only the most important points. What is the most significant to you as a business owner? Or to your customer base? Some of your strengths and weaknesses will be scratched off the list, others will move up to the top depending on their positive impact or risk they pose to your business.
By now you should have a clear indication of what your top priorities are - whether it's maintaining the strengths and/or improving certain weaknesses. As you evolve and grow as a business you should be continuously working on this list as a living document.
You should also include the value proposition of your business. This could be several items, but ultimately it will determine both your messaging as well as root your business in the 'why' it exists.
Be sure to reach out and include other team member's perceptions in this exercise - floor managers and those involved with customer interactions on a daily basis often have some of the greatest suggestions for improvements and what you are doing right as a business.
Lastly, write out a statement that includes what your business is, where you want it to go, a list of strengths, as well as weaknesses. Formulate the definition of your business into something like an executive summary.
Step Two: Scope Out the Market
The first step was all about looking inwards, this next step is focused on the externalities that may have an impact on your business - these are the opportunities and threats that exist in the market.
Opportunities are areas where there is something lacking or where you might find an advantage. For example, if there's an open space within the market, you could try to fill it. These are the potential ways you can leverage your business to provide what the market is seeking.
Perhaps, there is an area of town that lacks a coffee shop but also has a number of new office buildings opening up. That could be a potential location for Cooper's Coffee and Cafe. When those office buildings get built, there will be a large market of people grabbing a coffee on their way in, grabbing a prepared chicken salad sandwich for lunch, or meeting their clients off-campus.
It's quickly becoming a common theme, but you should be continuously revising your marketing plan over time. Suppose you conducted this research in January, but it wasn't until May that the office buildings broke ground? Perhaps you would miss this opportunity if you neglected to review and update it over time.
Opportunities are great, but there might also be threats in the market - in fact, you can pretty much bet on it. Threats include anything that can cause harm to your business, whether it be your idea, your customer base, or even changes in government policies.
In fact, even if you find that you're within a market with little to no competition, if you produce results and capture market share you can almost guarantee a competitor will spring up to gain a piece of the pie themselves.
While opportunities sound much nicer, identifying threats is an equally powerful way you can make your business stronger and better. So make sure you put in an equal amount of effort for both the opportunities AND the threats!
Crafting this marketing plan is the first step in protecting your business from weaknesses by thinking steps ahead. By conducting this step of scoping out the market, you are placing your business in a much better position to come out on top of the competition!
Step Three: Time to Actually Strategize!
So now we have this list of strengths, weaknesses, opportunities, and threats - congratulations, you just conducted a S.W.O.T Analysis of your business and you're ready for the next step - developing a strategy.
Start by looking at the intersections of your lists - what key points are most in alignment with your business goals and your target market?
Where can you position your strengths to produce the most good while insulating any weaknesses or threats away from the business?
Let's say you're a pest control company and your strength is forging connections with your clients - you treat them like family even if your pricing is a little above average than the 'big' players. One opportunity you put on your list was that there are a lot of commercial parks opening up around the corner.
Sure, at first glance it sounds like a great area to grow, but in a commercialized world, low pricing is absolute king. They may not care that you know they have a dog named Freddie and that you remind them not to let him play in the yard on the day it's treated. Alternatively, maybe the new neighborhood that's sprouting up is a better opportunity aligned with your strengths and weaknesses.
This is a simplified, but accurate, example of utilizing what your prep work educated you about your business and how to leverage that knowledge. It's one thing to know the specific items like demographics, but if you are unable to utilize that knowledge then it's not doing you a lick of good!
Make sure you craft an well thought, insight based strategy!
Step Four: Baby Steps
By this time, you've analyzed the internal and external factors impacting your business and have crafted a strategy in line with those points. Now it's time to get down to the details!
Draft a detailed list of steps you must take to realize your strategy and goals. These should be small, action-oriented steps that will allow you to build towards a better, stronger business.
A great example would be a goal such as "establish a voice of the customer process" for your customer outreach and quality control. Some of the tasks you might want to track could be: determine a survey method, set the amount of time between purchase and survey, craft the questions, and so forth. The overall goal of a VotC program will require a number of much smaller tasks to get up and rolling.
If you have a team, consider using a resource like Microsoft Planner or Trello - they work wonders! I use these in my tiny team of me and it helps keep my focus on the tasks at hand. I can put all my steps and goals in one place and view my progress with one quick glance.
Keep the mantra, Baby Steps, in mind as you craft these actionable items. Make sure that you don't leave any one thing too broad. The more narrow and detailed you make your plans, the more likely you will succeed at executing them.
Just don't go overboard! You want to craft clear steps while avoiding micro-management.
Step Five: Revise, Revise, Revise
A marketing plan is not meant to stay the same. Your business and the market change every day and at some point, what might not seem so important today could tomorrow mean all the difference in whether you stay in business or have to shut down.
Just think about all the businesses that had to react to the COVID pandemic. Some were already gaining online presence (storefronts or online delivery options), but some were not able to adapt and ultimately failed.
As a general rule you should review your marketing plan at least once a quarter. Some items such as the brand guide will likely stay constant, for consistency, and will only see change one every couple of years or so. However, the market landscape items such as competition, voice of the customer, or government policy can change much faster and should be reviewed regularly to ensure you are making the best decisions with the most up to date information.
What we chose to focus on today, could mean all the difference tomorrow. So, revise well, revise often.
Bonus Step: Get Help, It's OK!
Crafting a marketing plan can be tough work, especially if you're in the thick of things running the business. Marketing plan creation is a time consuming and draining action item.
In addition to that, it may be outside your comfort zone from a business management perspective. You may be the absolute best plumber or doctor in your market, but also might not have the time or ability to also be a marketing manager.
If you are able, hire a business advisor who can help you work through the tough bits and offer experienced, strategic advice.
Need help crafting your perfect marketing plan? A business coach from Out of the Box Advisors might be exactly what you need. We offer specialized consulting to help your company succeed - let's grab a coffee and get to business!