C2

Karen Robinson
BUILDING BUSINESS

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In the second part of the Business Plan series, I'm going to focus on marketing, advertising, competition and pricing -- four key components to creating a viable plan. Many people believe that marketing and advertising are the same thing, but such is not the case. Advertising is the paid (or unpaid) announcement enticing your potential customers to buy from you, whereas marketing is the systematic planning, implementation and control of your business activities in general.

Keep in mind that we, at the Community Business Development Corporation, may or may not examine some components of your business plan a bit differently than other financial institutions. We are a not-for-profit organization working in economic development to help build strong communities through our assistance to businesses.

Here are the next four components of your business plan outline:

* Marketing

You'll need to clearly outline what it is that you're going to be selling to the marketplace. Include your target market/area, hours of operation, and how your customers will be able to find you. Establish a reasonable price structure for your products/services as well. It's better to under estimate than to inflate what you believe the revenue will be once your open your doors for business. Perhaps your company is the only one of its kind in your area and demand for your product will be high due to this fact. Make sure you clearly state this in your overview so that potential financial institutions will know you've done your research and homework.

* Advertising

Show how you plan to sell your products to your potential clients. Will you use traditional methods of selling, i.e. radio, newspaper, television ads? Will you be attending trade shows/expos, or have an online presence via a website/sales page? Explain how much money you have budgeted by showing a monthly advertising cost on your financial spreadsheet.

* Competition

Clearly define who your direct and indirect competition is in your business plan. Do they offer the exact product/service as you will be? Is your product/service somehow different from theirs? Remember that your financial numbers in your budget will be explained here, so you'll need to specify any/all assumptions you've made as to your market share. It's also a good idea to outline any of your strengths as opposed to your competitor's weaknesses to show any differentiation between your company and theirs.

From the perspective of the CBDC, our board looks at competition very carefully and would probably not support a new company that may cause undue hardship to an existing business in the same area. Some of the criteria we look at includes job creation/maintenance, and if the new business venture may possibly take employees from an already established company.

* Pricing

This is where the equation can sometimes get a little tricky. Most new entrepreneurs often undersell their products/services in the beginning just to get clients and much needed revenue flowing into their business. By carefully scrutinizing the current marketplace, you should be able to ascertain what you'll need to charge to be competitive and still turn a profit. If you're offering additional add-ins to your product, i.e. warranties, guarantees or taxes, make sure to include them in your price and clearly state this when conducting advertising or publishing your selling prices.

Next month I'll finish off the Business Plan section by focusing on the Production, Business Environment, Environmental Concerns, and Projected Financial Statements. Be sure to check here on July 24, to read about how to complete a viable Business Plan to get your business up and running.

In the meantime, if you have any questions, please give our office a call at (506) 532-8312 and press '0' or check us out online at www.CBDC.ca.

* Karen Robinson is the executive director of CBDC Westmorland Albert, past- president of the New Brunswick Association of CBDCs, and is currently representing New Brunswick on the Executive Committee of the Atlantic Association of CBDCs. Building Business appears the fourth Friday of each month.