The Anatomy of a Business Plan

Written business plans are as varied as the companies that compile them.
Some plans run almost 100 pages, whereas others barely fill a few sheets.
Some plans start with executive summaries, and others plunge right into
detailed descriptions of products and services. Some companies print their
business plans on paper, and some publish their plans exclusively on the
Web. Some plans include page after page of financial projections, and others
list only anticipated costs, expected revenues, and projected profits.

Every business plan is written for a different reason and to obtain a different
outcome. Still, some plans are better than others. The following information
helps you write a plan that will win high marks.

Identifying Target Audiences and Key Messages

Your business plan is the blueprint for how you plan to build a successful
enterprise. It’s a comprehensive document that covers a lot of territory and
addresses all sorts of issues. To help focus your efforts, consider which groups of people will have the greatest impact on your success. Those
groups will be the primary audiences for your business plan.

For example, if you need capital investment, investors will be your primary
audience. If you need to build strategic alliances, you want to address potential
business partners. You and your team are another key audience for the
plan, of course, because it will serve as your guide. Be sure to keep that fact
in mind as you fine-tune the messages you want to convey.

Buying into the value of business planning

The time you invest in your business plan will pay off many times over. Some
of the most obvious benefits you’ll gain from business planning include

✓ A clear statement of your business mission and vision
✓ A set of values that can help you steer your business through times of
trouble
✓ A blueprint you can use to focus your energy and keep your company on
track
✓ Benchmarks you can use to track your performance and make midcourse
corrections
✓ A clear-eyed analysis of your industry, including opportunities and
threats
✓ A portrait of your potential customers and their buying behaviors
✓ A rundown of your major competitors and your strategies for facing
them
✓ An honest assessment of your company’s strengths and weaknesses
✓ A road map and timetable for achieving your goals and objectives
✓ A description of the products and services you offer
✓ An explanation of your marketing strategies
✓ An analysis of your revenues, costs, and projected profits
✓ A description of your business model, or how you plan to make money
and stay in business
✓ An action plan that anticipates potential detours or hurdles you may
encounter
✓ A handbook for new employees describing who you are and what your
company is all about
✓ A résumé you can use to introduce your business to suppliers, vendors,
lenders, and others

Making a wish list for your business plan
Setting out your priorities in the form of a business-planning wish list can
help you focus your efforts. With a completed plan in hand, you can return to
this list to make sure that it achieves everything on your list of priorities.

Committing to the Business-Planning Process

With a thousand issues clamoring for the precious hours in your day, committing
time to plan your company’s future isn’t easy. But operating without
a plan is even harder — and even more time-consuming in the long run. We
can give you dozens of good reasons to plan.

Two steps can help you get started. The first is to define your business situation
and how a business plan can help you move your business from where
it is to where you want it to be. The second is to list the ways that a business
plan can heighten your company’s odds of success. The next two sections
lead the way.

Planning for a start-up

A start-up company begins with a new idea and high hopes. A business plan
helps these new ventures evaluate their new idea, potential market, and
competition. The critical questions that a business plan for a start-up must
address are

✓ Does this new venture have a good chance of getting off the ground?
✓ How much money will the business need to get up and running?
✓ Who are our customers, and what’s the best way to reach them?
✓ Who are our competitors, and what’s the best way to outrun them?
✓ Why will customers choose our new product or service instead of our
competitors’?

Planning to address changing conditions

Especially during rocky economic times, many existing businesses are trying
to retool themselves. The critical questions a business plan must address are
✓ What are the economic realities we face?
✓ How can we reshape the company and its products or services to compete
in the new economic environment?
✓ What steps do we need to take to reach the goal of achieving those
changes?

Planning to seize growth opportunity
Even successful companies can’t rest on their laurels. To remain successful,
they have to continue to compete. For many, that means recognizing and
seizing opportunities to grow their businesses. For companies charting a
strategy to grow, a business plan must address several key questions

✓ Where do the best opportunities for growth lie?
✓ Who are our competitors in this new market?
✓ How can we best compete to grab new market share?

Starting Your Planning Engine

The fact that you’re holding this book means the task of writing a business
plan has made it onto your to-do list. Now come the questions. What
exactly is business planning? What should it include? Where do you start the
process of writing your business plan?

Well, that’s exactly what this blog, is all about. It confirms your hunch that business planning is
essential — when you start your business and at every growth stage along
the way. Plus, it helps you think clearly about why you need a business plan,
whom your business plan is for, what key components you need to include,
and what kind of time frame is reasonable.

Researching B2B Markets

Market research and social media choices for business-to-business markets
are somewhat different from business-to-consumer markets because the
sales cycle is different. Usually, B2B companies have a longer sales cycle and
high-ticket purchases and multiple people who play a role in closing a sale;
consequently, B2B marketing requires a different social media presence.
In terms of social media, more B2B marketing efforts focus on branding, topof-
mind visibility, customer support, and problem-solving compared to more
sales-focused messages from B2C companies.

You can treat the interest groups in the earlier section “Affinity, or interest,
groups” as vertical market segments and take advantage of Google Insights
to discern trends over time. You might also want to assess competitor presence
on different forms of social media.

One key step in B2B marketing is to identify people who make the buying
decision. Professional social networks such as LinkedIn and Plaxo may help
you research people on your B2B customer or prospect lists.

The value of various forms of social media appears to differ by company
size, according to research by Marketing Sherpa, shown in Figure 2-6.
Marketing Sherpa also found differences in efficacy by industry type. Their

findings may reflect available budget and human resources as well as techniques. For more information, visit www.sherpastore.com/Social
MediaMkt2010.html or www.sherpastore.com/B2BMarketing
BenchmarkGuide.html to download excerpts. HubSpot, at www.hubspot.
com, also offers a range of B2B market research tools and webinars.

As always, the key is ensuring that your customers are using the type of
social media you’re considering. Use the search feature and group options
on major social networking sites to test your list of existing customers.
Chances are good that if a large number of your existing customers are using
that service, it will be a good source for future customers as well.

Segmenting Your B2C Market

If you have a business-to-consumer company, you can adapt the standard
tools of market segmentation to define various niche audiences by where
they live and how they spend their time and money. The most common
types of segmentation are

✦ Demographics
✦ Geographics
✦ Life stages
✦ Psychographics or lifestyle
✦ Affinity or interest groups

These categories affect not only your social media tactics but also your graphics,
message, content, offers, and every other aspect of your marketing.

Your messages need to be specific enough to satisfy the needs and wants of
the distinct subgroups you’re trying to reach.

Suppose that you want to sell a line of organic, herbal hair care products
using social media. If you described your target market as “everyone who
uses shampoo” on your Social Media Marketing Goals form (see Book I,
Chapter 1), segment that market into different subgroups before you select
appropriate social marketing techniques.

When you’re creating subgroups, keep these concepts in mind:
✦ Simple demographics affect your market definition. The use of fragrances,
descriptive terms, and even packaging may vary by gender.

How many shampoo commercials for men talk about silky hair? For that
matter, what’s the ratio of shampoo commercials addressed to women
versus men?

✦ Consider geography. Geography may not seem obvious, but people
who live in dry climates may be more receptive to a message about
moisturizers than people who live in humid climates. Or, perhaps your
production capacity constrains your initial product launch to a local or
regional area.

✦ Think about life stages. For instance, people who dye their hair look
for different hair care products than those who don’t, but the reason
they color their hair affects your selling message. (Teenagers and young
adults may dye their hair unusual colors in an effort to belong to a
group of their peers; older men may hide the gray with Grecian Formula;
women with kids may be interested in fashion or color their hair as a
pick-me-up.)

✦ Even lifestyles (psychographics) affect decisions. People with limited
resources who are unlikely to try new products may respond to
messages about value and satisfaction guarantees; people with more
resources or a higher status may be affected by messages related to
social grouping and self-esteem.

✦ Affinity or interest groups are an obvious segmentation parameter.
People who participate in environmental organizations or who recycle
goods may be more likely to be swayed by a “green shampoo” appeal or
shop in specific online venues.
Different niche markets are drawn to different social media activities in
general and to specific social media service providers in particular. In the
following several sections, we look in detail at different online tools you can
use to explore the parameters that seem the most appropriate for segmenting
your audience and selecting specific social media sites.

The most successful marketing campaigns are driven by your target markets,
not by techniques.

Plotting Your Social Media Marketing Strategy

Let your customers and prospects drive your selection of social media
alternatives. To see the best return on your investment in social media, you
need to try to use the same social media as they do. This principle is exactly
the same one you apply to all your other marketing and advertising efforts.
Social media is a new tactic, not a new world.

Fish where your fish are. If your potential customers aren’t on a particular
social media outlet, don’t start a campaign on that media.

In this chapter, we show how to use online market research to assess the
match between your target markets and various social media outlets. After
you do that, you’re ready to start filling out your own tactical Social Media
Marketing Plan,

Estimating costs

Estimating costs

Estimating costs from the bottom up is rather tricky, and this approach
rarely includes a cap. Consequently, costs often wildly exceed your budget.
Instead, establish first how much money you’re willing to invest in the overall
effort, including in-house labor, outside contractors, and miscellaneous
hard costs such as purchasing software or equipment. Enter those amounts
in the Cost section.

Then prioritize your social marketing efforts based on what you can afford,
allocating or reallocating funds within your budget as needed. This approach
not only keeps your total social marketing costs under control but also lets
you assess the results against expenses.

Developing a Strategic Social Media Marketing Plan

Surely you wrote an overall marketing plan when you last updated your business
plan and an online marketing plan when you first created your Web
site. If not, it’s never too late! For business planning resources, see the Small
Business Planner page at www.sba.gov/smallbusinessplanner/plan/
writeabusinessplan/index.html

Integrating Social Media into Your Overall Marketing Effort

Social media is only part of your online marketing. Online marketing is only
part of your overall marketing. Don’t mistake the part for the whole.

Consider each foray into social marketing as a strategic choice to supplement
your other online marketing activities, which may include creating or
managing a marketing-effective Web site, content updates, search engine
optimization (SEO), inbound link campaigns, online press releases, event
calendar postings, e-mail newsletters, testimonials and reviews, affiliate or
loyalty programs, online events or promotions, not to mention pay-per-click
ads, banners, or sponsorships.

Understanding the Cons of Social Media

For all its upsides, social media has its downsides. As social media has
gained in popularity, it has also become increasingly difficult to gain visibility
among its hundreds of millions of users.
In fact, sometimes you have to craft a campaign just to build an audience
on a particular social media site. It’s quite similar to conducting optimization
and inbound link campaigns so that your site is found in natural search
results.

Saving money on advertising

The magic word is free. If you’re a start-up company, “free” social media is
likely the only advertising you can afford. If you decide to approach social
media for this purpose, construct your master campaign just as carefully as
you would a paid one:

✦ Create a plan that outlines target markets, ad offers, publishing venues,
and scheduled “flights” for different ad campaigns.

Selling when opportunity arises

Conventional thinking says that social media is designed for long-term
engagement, for marketing and branding rather than for sales. However,
a few obvious selling opportunities exist, particularly for business-toconsumer
(B2C) companies, that won’t offend followers:

✦ Sell CDs and event tickets. Services such as MySpace cater to music
and entertainment and are considered appropriate places.
✦ Include a link to your store on social shopping services. Recommend
products — particularly apparel, jewelry, beauty, and decor — as
Stylehive does.
✦ Offer promotional codes or special offers to followers. Offering them
on particular networks encourages your followers to visit your site to
make a purchase. You can even announce sales or events.

Improving business processes

Already, many clever businesses have found ways to use social media to
improve business processes. Though individual applications depend on the
nature of your business, consider leveraging social media to

✦ Promptly detect and correct customer problems or complaints
✦ Obtain customer feedback and input on new product designs or changes
✦ Provide tech support to many people at one time; if one person has a
question, changes are good that others do, too

Branding

Basic marketing focuses on the need for branding, name recognition, visibility,
presence, or top-of-mind awareness. Call it what you will — you want
people to remember your company name when they’re in need of your
product or service. Social media services, of almost every type, are excellent
ways to build your brand.

Social media works for branding as long as you get your name in front of
the right people. Plan to segment the audience on the large social media
services. You can look for more targeted groups within them or search for
specialty services that may reach fewer people overall but more of the ones
who are right for your business.

Understanding the Benefits of Social Media

Social media marketing carries many benefits. One of the most of important
is that you don’t have to front any cash for most services. Of course, there’s
a downside: Most services require a significant investment of time to initiate
and maintain a social media marketing campaign.

As you read the list of benefits, think about whether the benefit is one that
applies to your needs. How important is it to your business? How much time
are you willing to allocate to it? What kind of a payoff would you expect?

Making the Business Case for Social Media

In the best of all worlds, social media — a suite of online services that
facilitates two-way communication and content sharing — can become
a productive component of your overall marketing strategy. These services
can enhance your company’s online visibility, strengthen relationships with
your clients, and expand word-of-mouth advertising, which is the best type.

Given its rapid rise in popularity and its hundreds of millions of worldwide
users, social media marketing sounds quite tempting. These tools require
minimal upfront cash and, theoretically, you’ll find customers flooding
through your cyberdoors, ready to buy. It sounds like a no-brainer — but it
isn’t.

Unlocking the Secret of Mutual Success

Selling is all about establishing mutually beneficial relationships, and when
you think about it, that’s the type of relationship we strive for in every aspect
of our lives. The most productive relationships are those in which each
person involved thrives independently and can bring something of value to
the relationship.

Prospecting for Ideas and Leads

The paradox of giving is that the more you give, the more you receive, especially
when you’re not trying to receive. It just snowballs. One opportunity
leads to another. I post an article on one of my blogs, and a reporter calls to
interview me. That interview gets posted, a publisher notices it and calls me
to write a book. The book is published, and I get more reporters calling.

Branding yourself

Think of Martha Stewart, The Donald, Oprah, Britney Spears, Paris Hilton. As
soon as you see or hear the name, that person’s face probably pops into your
mind. And you probably can describe what each person does. That’s because
these people have brand presence. Through their own self promotion and a
lot of help from the media, these folks have achieved celebrity status.

Identifying your unique selling point

In the good old days, you knew who you were doing business with. Maybe it
was Ted the TV guy, Melvin the milkman, Beatrice the beautician, Clare the
cleaning lady, Fran the financial planner, or Ralph the Realtor (always thinking
of Me, Incorporated). In a small town there was usually one person known
as the go-to guy or gal for each product or service. Nowadays, particularly in
big cities, you may find dozens or even thousands of suppliers from which to
choose. To stick out (in a good way, of course), you want to pick something
about you that’s unique or create some memorable persona, so when
prospective customers think of the product or service you’re selling, they
immediately think of you.

Selling Yourself: Self-Promotion

Sure, you’re selling products and services, but when your customers choose
to buy from you rather than from one of your competitors, they’re buying
into you. Although you may market and sell a host of products, remember
that your major marketing campaign should center mainly on you. You are
your own company, and by promoting yourself properly and persistently, you
ensure a long and successful future in sales.

Recruiting People Power to Fuel Your Success

Overachievers are often self-reliant types who refuse to ask for any assistance.
They like to achieve everything on their own, so they can take full
credit. When you’re in sales, that approach is nonsense. The fact is that you
can do more and do it better by harnessing the power of people.

If you need proof, just look around at the major corporations. Do you think
they could be major corporations without hiring people? Think of yourself as a
mini-corporation, You, Inc. When you want to grow your business, you’d better
hang out the Help Wanted sign and start interviewing some qualified candidates.
Here are some tips for harnessing people power to fuel your success:

Envisioning your success

What does sales success look like to you? Are you sitting in an office all day
making cold calls? Driving around from one disinterested client to another
trying to drum up business? Or do you have people calling you to place
orders? Do you have to hire an assistant to handle the extra business? Do you
have more opportunities than you can possibly pursue?

Your first step in achieving success is to envision it. Most people can’t get
past this first step, because they don’t even know what they would love to
do. Dream, and then jot down a detailed description of that dream, so you
can close your eyes and see it playing out in your mind.

Implementing your plan

Sales and business consultants often discover that clients are more than willing
to pay them $300 or more per hour for advice and then rarely put that
advice into practice. They know what they have to do to achieve success, but
they’re unwilling to take that essential next step — implementing the plan.

After setting your goal and drawing up a solid plan, put your plan into action. If
it doesn’t quite work, make the necessary adjustments and try again. Successful
businesspeople rarely succeed on their first attempt. They fail, learn, make
adjustments, and persist. Unsuccessful people fail and give up or never even get
started. I’ve known salespeople who have stuck with a prospect for 14 months
and then given up only to discover that the customer decided to buy in the 15th
month. If it were easy, everyone would do it.

Setting stimulating goals

Most sales coaches stress that goals should be realistic, which is somewhat
true, but realistic goals that don’t make you stretch are of little use. I prefer
to encourage the salespeople I coach to set stimulating goals. A goal should
always make you reach outside your comfort zone. It should always include
some level of risk. A good goal should include the following:

Establishing a positive mindset

Success stands at the end of many different journeys, but it always begins
with the right attitude — a positive mindset. If you’ve been around negative
people all your life, your mindset may be holding you back.

Just as buggy software can bog down a computer and cause it to crash, negative
thoughts can slow you down and derail your efforts to succeed. You may
have to reboot your mind and fill it with positive affirmations and a strong
belief that you are perfectly capable of achieving your dreams. Here are some
suggestions on how to give yourself a positive attitude adjustment:

Mastering the Sales Success Mindset

Advanced selling is the full-court press approach to achieving success. It
requires clear vision, careful planning, shameless self-promotion, a discerning
vigilance, the ability and willingness to take calculated risks, and a
dogged determination that I like to refer to as sticktoitism.

Advanced selling is about more than boosting sales and profits, although
that’s certainly a part of it and is probably the biggest reason you’re reading
this book. The strategies and tips you master as an advanced seller can also
be applied to other aspects of your life to achieve both your professional and
personal goals.