Marketing Your Home Business

Every successful business venture implements a well thought out marketing plan. The development of a marketing plan along with financial and management plans will generally determine your success or failure in a home-based business. The fundamentals of a marketing plan are to know your customers well and to know your competitors even better. By identifying these two elements you can develop a marketing plan that will satisfy the needs of your customers, help you understand competitors, and be aware of changes in the market that could affect your profits.

It takes planning and research to develop a successful marketing plan. Your home-based business will not become extremely profitable on its own. A marketing plan for your home business should include the level of demand for your particular service or product, how many businesses offer the same service or product, and how you can create a demand for your product through advertising or other promotions. Also a major consideration in marketing your home business is to determine if you can compete in quality, price and delivery of your product. Even if you use a marketing plan developed elsewhere, you still must cultivate the market by promoting your product in a way designed to attract customers and keep them.

Thorough research of your marketplace will allow you to organize your information, reduce risks, identify sales opportunities, locate potential problems, and gather basic facts about the market to help you set up a plan of action. Market research may seem time consuming but it will save you time and money in the long run. Developing a marketing plan for your home-based business will supply you with information that can help ensure your success. The most crucial elements of marketing your home business are to describe your target market, determine who your competitors are, a description of your service or product, what you can afford as far as a marketing budget, determining the location of the business, and a pricing strategy. All these factors combined will give you the information you need to make your home-based business a success.

Expecting your business to succeed while you sit idly by is unrealistic and unlikely to happen. You do not have to be an expert to develop and implement a successful marketing plan for your home business. Research, a sound marketing plan, and effort are all you need to make your home-based business flourish. Occasionally, a business will become highly profitable using a non-traditional approach, but proven techniques including financial and marketing plans are the best way to give your home-based business the advantage it needs to succeed in today's competitive marketplace.

Your home-based business can generate long lasting income for you and your family if you follow a few simple guidelines. Focus on your customers and their needs, keep communicating with previously non-interested customers, make it easy for your clients to buy, answer questions fully, and provide excellent service. This, joined with a well thought out marketing plan, will ensure you a successful home business venture. Whether you develop your own unique plan or follow guidelines created and tested by others, marketing your home business can be very rewarding if you make a home business marketing plan and implement it wisely.

Planning Guidelines

The business planning experts at Business Resource Software, Inc. have written a number of articles addressing aspects of the creation, analysis and documentation of your business and marketing strategies. Select any topic:

Dupont Chart
Illustrates the relationship between key ratios and components of a business.

A Mission Statement
What is it? Why is it needed? How specific should it be?
Strategic Marketing Plan
This article addresses strategies for pricing, distribution, promotion, advertising and market segmentation. Factors such as market penetration, market share, profit margins, budgets, financial analysis, capital investment, government actions, demographic changes, emerging technology and cultural trends are also addressed.

Issues Influencing Price
This article addresses a variety of factors that should be considered when establishing a price for your product or service. These include pricing methods, the impact of your enterprise objectives, the effects of competition, the influence of the prospect's perception, characteristics of your product or service, your enterprise resources and environmental influences.

Market Segmentation
A market is composed of many buyer groups. These can be categorized by their needs. Each category has unique characteristics that influence the decision to buy.

Income Statement
A description of the Income Statement, also known as the P&L Statement. It is a projection of your revenue and expenses.

Cash Flow Statement
A description of the Cash Flow Statement. It projects if and when you will need an infusion of operating capital.

Balance Sheet
A description of the Balance Sheet. It shows the assets, liabilities and financial health of your business.

Financial Ratios
Investors use a variety of ratios to evaluate your financial projections. It is to your advantage to understand the more commonly used ones.

Glossary of Business Terms
A glossary of terms commonly used in analyzing a marketing strategy and documenting a business plan.

Marketing Plan

Your marketing plan is your plan to bring your product or service to the market place. Marketing strategies match or transform your product or services to the needs of your customers. Good market research will uncover marketing ideas for new products or services that are not presently being met.

The first step is a market analysis. This analyzes the market size, growth characteristics, buying trends and trends for the future. It profiles the competitors in the market you want to compete in. What are their strengths, weaknesses and unique selling proposition. What are opportunities are there that are not being satisfied? Profile your current and potential customers. How do they make their buy decision? What are they looking for that isn't available today?

Marketing strategies and tactics are your plans to capture a niche or an entire market segment based on your company capabilities and the needs of the market. Marketing strategies should include product positioning strategies, pricing, distribution, channel penetration, advertising, Internet, public relations, tradeshows, use of reps, telemarketing, direct mail, etc.

Introducing new products or services to the market is a major stumbling block for most small businesses. Frequently an aggressive marketing manager will commit to a new product before it has ever been prototyped.

The new product development process should not be based only on technology and process capabilities (engineering driven). The new product launch that is based only on satisfying an un-met market need without taking into account company capabilities is equally bad (marketing driven). New product introductions need to be a joint venture between marketing and engineering to be effective.

A well thought out marketing plan is needed in today's world. Doug Williams and Associates can help develop the right plan for your business. We work with you and your staff to create your own blueprint for success. We work with startup organizations as well as mature organizations.

Business Plan Structure

All plans should include at least the elements listed below, and perhaps additional sections depending on the type of industry.

* Executive Summary
* Company Background
* Products or Service Overview
* Unique Selling Proposition and competitive advantages
* The Marketplace
* Operations
* Leadership and management profiles including professional competencies
* Professional Support
* Risks and Threats assessment
* Financial forecasts including key assumptions
* Relevant appendices

Collecting the information for all the sections is time consuming and sometimes difficult. The business section of your local library is always a good place to start research. Ask your friendly librarian about how to look up market research reports, and how to investigate competitors.

If you are not familiar with spreadsheet software, constructing the necessary financial forecasts represents a significant hurdle. You have 2 choices:

Pay someone to put part or all of the plan together for you, or a small investment in some business planning software.

The advantage of using a professional is you will receive the benefits of their experience, combined with a professional looking plan.

The disadvantage is that it won’t be easy to make changes, and more importantly, because you will not have been as involved in its preparation, you won’t be as familiar with its contents as you maybe should be. Make sure to learn the contents well.

The advantages of investing in business planning software, are that you will save time and money over having a professional put the plan together for you.

You will be able to take advantage of the thousands spent consulting professionals, and users alike, by the software company in developing the product. You can disregard your worries about having any spreadsheet skills, or your lack of confidence in buiding a complete financial model, as this software will take care of that for you.

For less than the cost of having a professional put the plan together for you, you can produce a professional document, but more importantly continuously update your plan for new information. This means you’ll always have a first class plan ready to present to banks or investors at any time.

Sample Business Plans

Using sample business plans and their structure, along with studying as many business plan examples as you can, will provide you with the necessary framework to consider your business from every possible angle.

Starting or running your business without a business plan is just like being a human being without a skeleton!

Not only will using a sample structure highlight any areas you haven't fully thought through, but it will also provide you with a good idea of what makes a good business plan, and what doesn't.

The importance of your business plan as a motivational factor in running or starting your business cannot be underestimated. You will find that your commitment continues to build as you collect information, research and write each section.

Your business plan should always accompany requests for Small Business Loans, and lenders or any kind of angel investor will simply refuse to consider your business proposal without one.

Lenders and investors want to see your plan with the aim of satisfying key questions before they make their decision to grant funding or not.

Once you’ve commenced trading your small business plan will act as a steak in the ground, and help you measure where you expected to be against where you actually are. It will help you take corrective action as necessary.

How to Create a Marketing Plan

Firms that are successful in marketing invariably start with a marketing plan. Large companies have plans with hundreds of pages; small companies can get by with a half-dozen sheets. Put your marketing plan in a three-ring binder. Refer to it at least quarterly, but better yet monthly. Leave a tab for putting in monthly reports on sales/manufacturing; this will allow you to track performance as you follow the plan.

The plan should cover one year. For small companies, this is often the best way to think about marketing. Things change, people leave, markets evolve, customers come and go. Later on we suggest creating a section of your plan that addresses the medium-term future--two to four years down the road. But the bulk of your plan should focus on the coming year.

You should allow yourself a couple of months to write the plan, even if it's only a few pages long. Developing the plan is the "heavy lifting" of marketing. While executing the plan has its challenges, deciding what to do and how to do it is marketing's greatest challenge. Most marketing plans kick off with the first of the year or with the opening of your fiscal year if it's different.
Who should see your plan? All the players in the company. Firms typically keep their marketing plans very, very private for one of two very different reasons: Either they're too skimpy and management would be embarrassed to have them see the light of day, or they're solid and packed with information . . . which would make them extremely valuable to the competition.

You can't do a marketing plan without getting many people involved. No matter what your size, get feedback from all parts of your company: finance, manufacturing, personnel, supply and so on--in addition to marketing itself. This is especially important because it will take all aspects of your company to make your marketing plan work. Your key people can provide realistic input on what's achievable and how your goals can be reached, and they can share any insights they have on any potential, as-yet-unrealized marketing opportunities, adding another dimension to your plan. If you're essentially a one-person management operation, you'll have to wear all your hats at one time--but at least the meetings will be short!

What's the relationship between your marketing plan and your business plan or vision statement? Your business plan spells out what your business is about--what you do and don't do, and what your ultimate goals are. It encompasses more than marketing; it can include discussions of locations, staffing, financing, strategic alliances and so on. It includes "the vision thing," the resounding words that spell out the glorious purpose of your company in stirring language. Your business plan is the U.S. Constitution of your business: If you want to do something that's outside the business plan, you need to either change your mind or change the plan. Your company's business plan provides the environment in which your marketing plan must flourish. The two documents must be consistent.