How to Write the Business Plan Products and Services Section
The business plan products and services section provides a comprehensive overview of your business, including your business model, product and service offerings, target market, and sales forecast.
“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 will discuss the information you should include regarding your products and services, 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 offer several services to their customers, sometimes both, especially as you grow and scale up your business operations.
The products and services section should not just list your business offers in your business plan. It should provide comprehensive information on the pricing of your products and services, how you intend to fulfill orders, and other relevant details that investors require to make funding decisions. Find out more below.
Why you need a products and services section in a business plan
The section on products and services in your business plan is the focal point of your entire plan. Although other areas are significant, this section is the core of your business and serves as the foundation for the rest of your plan.
Describe your business plan product or service offerings
Firstly, within this section of your business plan, you want to include a description 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 under which your products or services fall and then describe the relevant characteristics of your offerings. It’s important to remember that, while offering 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 them. Instead, write for someone who doesn’t know anything about your business. That guarantees that your descriptions are clear and understandable.
Remember the following questions as you sculpt each entry’s product and service description.
- What is the current status of the product or service offering in the marketplace?
- Is the offering an existing product or service or one 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, industry awards, or the use of technology or advanced sustainability elements that differentiate you.
- Item 1 = $4.99
- Item 2 = $7.99
- Item 3 = $15.95
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 priorities for your business plan
Whether your offerings are currently in the market or 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 you offer customers.
For each overarching category, describe how this helps your customers 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 discuss how your products and services are currently differentiated.
- What are the characteristics, design innovations, and features 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 affordability isn’t generally a concern if your market strategy targets wealthy consumers.
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 proactive in seeking solutions.
Unique value proposition for your business plan products and services section
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 marketplace.
Discuss why your target market 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 are lacking from other market contenders?
- What is the product and service difference that you selected for marketing purposes that will drive customer adoption?
Your value propositions should focus on your customer needs, and answering these questions 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 product and service 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 oversee your decisions and focus your efforts. Otherwise, you run the risk of stagnation, ultimately impacting your business growth and cash flow.
Why is the business plan products and services section important?
In the products and services section of your business plan, you can explain the purpose behind your business. This can include detailed information about your products or services, such as pricing, and more personal aspects like your mission statement.
The goal is to create a compelling and well-rounded description of what you offer, how it operates, and why it is beneficial. This section should be able to stand alone and be supported by the other areas of your plan.
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