When you start a business you are trying to meet a market need with a certain solution. That solution is what comprises your Products and Services section.
This section covers what you provide to customers and how you deliver it. It is the reason you are in business. There is something here you decided would revolutionize a market, fill a need that has been desperately looking for a solution or provide something that rides a hot trend.
In most cases you will want to answer in an summary format what your company is providing and why it is so different. This should catch the reader’s attention and make them want to read the detail supporting your intro paragraph.
After you have caught their attention and told them how and why your offerings are so great/revolutionary/needed, you need to include the following things:
Product Offerings – This describes your products in more details and should communicate why you are unique. If you are not providing a physical product (i.e. widget, web site) then go right to the next part.
Service Offerings – This covers the services you offer and really needs to communicate how you are going to stand out because services are not as tangible. If you are providing products this is where you discuss services that support the product and complimentary services that will increase your revenue potential.
Pricing and Revenue Strategy – After you have discussed what you are offering you should discuss how you are pricing everything and how you are going to go about making money with these product and service offerings. With revenues, you need to discuss costs and margin at a high level.
Goals and Objectives – This is the place for major milestones including your pricing and revenue strategy, customers and other important metrics.
Methods and Differentiation – Here is where you really need to show how you will stand out against competitors and differentiate your company as a whole with its products and services. This should also include patent and copyright information.
Relationships and Partnerships – This section is to build on your offerings and demonstrate your success and reach with important vendor relationships and partnerships/joint ventures you have established to increase your revenue potential. You might also want to include customers and important case example to demonstrate the success your offerings have already achieved.
AllBusiness.com makes some good points about technical jargon:
“While you do not want to appear condescending, do not assume that everyone reading your business plan is familiar with the terminology for your industry. Therefore, you need to examine your description from an objective perspective and ask yourself:
- Am I being too technical?
- Am I assuming readers will have too great a knowledge base?
- Am I using terms that are unfamiliar to anyone outside of the industry?
- Am I using “buzzwords”?
- Do I adequately describe the primary function and benefit(s) of the product or service?
- If I am introducing a new product or concept, am I including a comparative reference point? (For example, the new seats at the spa will resemble airline seats.)
One of the best ways to evaluate your products and services section is to simply ask other people to read the section and explain in their own words their understanding of the products or services you sell and their benefits. Clarity is the key.
Explaining your products and services in layman’s terms will allow you to reach out to a wide range of investors, including those who know little about your industry but can spot a potentially profitable business. In sharing your business plan with your employees, clarity in this section allows everyone to have a clear understanding of the business and its products and services.”
Shari Waters at About.com has an additional recommendation on length and depth:
“Keep this section to just a few pages. The products and services section is not intended to list each and every product, but to give an overview of the product lines and the associated research. Do your homework. If the products are original, include all legal aspects such as patents or copyrights and include photos or other visual aids.”
Next Time: Evaluating and beating the competition.
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