How to Write the Product and Services Section of a Business Plan
"You’ve got to start with the customer experience and work back toward the technology – not the other way around." - Steve Jobs
In this, the fifth installment in our ”Creating your business plan” article series, we’re going to discuss the information you should include regarding your products and services and how they contribute to your unique value proposition and what sets you apart from your peer group.
Most companies either sell a range of products or offers several services to their customers, and sometimes both, especially as your start to grow and scale-up your business operations.
Describe Your Product or Service Offerings
Firstly, within this section of your business plan, you want to include a description of each of your products or services. These should be reasonably detailed, to give your reader a strong understanding of how they fit into your overall business plan.
You should discuss the general categories that your products or services fall under, and then describe the relevant characteristics of your offerings. It’s important to remember that, while you should offer a detailed review, you shouldn’t get too technical. It would help if you avoided buzzwords, acronyms, and dense industry jargon.
There’s a good chance that some of your readers won’t be familiar with these terms and using them could confuse. Instead, write for someone that doesn’t know anything about your business. That guarantees that your descriptions are clear and comprehensible.
As you sculpt your product and services description for each entry, keep the following questions in mind.
What is the current product or service offering status in the marketplace?
Is the offering an existing product or service or one that’s in development?
How will you offer the product or services?
What are the ideal price point and profit margins?
What are your innovation plans for this product or service?
For the former, discuss how long it has been a part of your company, any significant historical developments, any industry awards, or the use of technology or advanced sustainability elements that differentiate you.
If it’s a new product or service, give your business plan readers information about where it is in its development, what else is required to bring it to completion (and ready to sell), and when you expect to roll it out.
Develop Strategic Innovation Roadmap
Whether your offerings are currently in the market or they’re under development, to remain competitive, you need a strategic roadmap plan to guide their continued innovation over time, offering customers thoughtful and innovative new solutions to delight and introduce them to your broader product and service offering.
Ideally, you would want to include an innovation roadmap for each product or service that you offer customers.
For each overarching category, describe how this helps your customers and articulate how your product offering or services fit into the marketplace and how you plan to develop it to stay ahead of your competitors.
Your strategy roadmap describes how you’ll remain competitive in the future, but you also need to talk about how your products and services are currently differentiated.
What are the characteristics, design innovations, and features that set your offering apart from the rest of the market?
How do they fit in general, and where do they shine?
Where do your prices fall relative to your competitors?
Is price a distinguishing feature?
Are you catering to value-conscious, or price-sensitive consumers, or do you charge more than the competition because your products and services warrant it?
Affordability is a relative term. High-end products aren’t affordable to most people, but if your market strategy targets wealthy consumers, affordability isn’t generally a concern.
You can also talk about product and service shortcomings if any exist. Describe how your three-to-five-year forward focusing strategy and innovation plans will help to rectify the situation. Other than providing enrichment, this will demonstrate to your business plan readers that you're open, transparent, honest, and pro-active in seeking out solutions.
Unique Value Proposition
Your value proposition is a declaration from you about the benefits your customers receive by using your service or the challenges they will overcome by using your product versus an alternative in the market place.
Discuss why your target market either prefers or should prefer your offerings over the competition.
What is your value proposition, and what does this mean for your customers?
How does your product or service offering solve/ improve problems?
What benefits do you provide that is lacking from other market contenders?
What is the product and services difference that you selected for marketing purposes that will drive customer adoption?
Your value propositions should focus on your customer needs, and by answering these questions, it will give your business plan readers a robust understanding of everything you offer and your future aspirations for business growth.
You may have different value propositions for each of the target core customer groups. As your business grows, you will likely have to revisit your value proposition for each of your product and service offerings to safeguard your competitiveness and relevance in the marketplace.
Be strategic. You can’t leave change up to chance. You will need a strategy development process to overseer your decisions and focus your efforts. Otherwise, you run the risk of stagnation, and this will ultimately impact your business growth and cash flow.
Need Help Developing Your Strategic Business Plan?
It can sometimes be challenging to gain the perspective and free time needed to create an all-inclusive business plan. We are here to help. If at any point, you want an expert “second opinion” to review your strategy, innovation roadmap, business plan, or financial forecasts? Let’s talk!
About Noirwolf Consulting
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Our business plan development process includes all critical aspects to help you create a successful business plan that is customized to meet your individual needs, whether it is starting your business or looking to secure a bank loan.
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