My business plan serves two purposes. First, it provides me with a guide to operate my business. Secondly, it is a sales tool that has impressed bankers. I have also used it to convince distributors that I am serious about what I am doing. My plan includes the following:
- Current Situation
Always include a short summary description of your business, particularly if you intend to use it to woo investors. It also serves as a reminder of where you propose to focus your efforts. Limit the length of the summary to one page and include the following:
- A brief description of your book and market
- A brief description of your skills and competence
- A summary of your financial projections
1. Company and Industry. This contains background information on your company and describes the nature of your industry. It should include the following information:
For your company:
- The date of incorporation
- Principals and what role each has played in the business to date
- Business purpose and highlights of progress to date
For your industry:
- Present what you feel to be the current status and prospects for the overall book business; what are your sources?
- Describe the major “players” and how they are performing, including growth in sales, profits, and current market share.2. Product. Completely describe your book, articles, video, or skills (design, editing, etc).3. Market. This forces you to research your competition and opportunities to create a realistic forecast. Include the following:
- Market Definition. Describe the potential customers, their locations, their interest in your product, and seasonal changes in sales. If your book has a track record, discuss how it is viewed in the marketplace.
- Market Size. Use statistics and other objective data (much of which can be found online).
- Market Trends. Describe the market’s growth potential. For example, if employment is growing, why should a distributor consider my new job search book? (For example, I demonstrate that college enrollments are growing and that my title is directed toward this growing pool of graduates.)
- Competition. Name and discuss all major competitors. Compare your book with your competitors’ books on the basis of price, unique benefits, and other important factors.
1. What you will accomplish in this period in terms of unit sales, gross revenue, and net income?
Remember the 4 P’s of marketing: product, place, price, and promotion. Describe broadly how you intend to manipulate each of them strategically to reach your objectives.
- Product. What will you do to improve the strategic market position of your book (skills, etc)?
- Place. There are two basic ways to get your book to the intended audience: directly or indirectly. Direct distribution strategy bypasses the traditional channels using distributors and wholesalers. An indirect strategy utilizes them. How will you use or combine these two strategies?
- Price. Explain why the price you have calculated will increase acceptance of your product, produce profits, and maintain or increase your market share.
- Promotion. Explain how you plan to bring your book to the attention of potential customers.
These are the details of specific actions you will take to implement the strategies that will ultimately achieve your objective. Again, it is helpful to categorize them by the 4 P’s.1. Product. Can you make your book more detailed than your competitors’ works? More up-to-date? What will you do next? A new book or planned second edition will enhance your stature among publishers and distributors. They are more likely to take you seriously if you can demonstrate you are not a single-title author.2 Place. If distributors or sales representatives will be used, describe how they will be attracted, motivated, compensated, and what geographic (or market) areas will be covered.3. Price. Always consider the discount the people in your distribution channel will assess.4. Promotion.Public Relations. Describe how you will generate free publicity through appearances on television and radio shows. How will you stimulate book reviews? Show samples of press releases.Sales Promotion. Give examples of the sales promotional tools you will implement. What kind of promotional literature will you develop? Four color? Black and white?Advertising. In what media will you advertise? How will you use continuity to create awareness of your new book? How will you use direct mail to reach your targeted lists? Include a description of the trade shows you will attend such as the BEA or regional shows.Personal Selling. Describe how you will stimulate sales through personal presentations, book signings, and seminars you will conduct.
If you perform all these tactics, how many books will you sell? Here you will provide an estimate of sales in terms of units and revenue. Identify any major customers who have made or are willing to make purchase commitments.
Given the revenue you expect and the costs for implementing all your tactics, create a budget. The amount of financial information presented in your business plan will depend largely on the stage of your financing and the amount of money you are seeking. Your plan should describe in general terms the type and amount of funding you need.
- Current Financial Statements. If your company has a financial track record, provide financial statements for the last three years or since your company’s inception including a detailed breakdown of income statement categories.
- Assumptions and explanations of any unusual fluctuations in income or expenses.
- Financial Projections. Provide a three-year cash flow, profit-and-loss statement, and balance sheet projections. If your company has had a track record, the projections should be on a quarterly basis for the first year and annually thereafter. Otherwise, the projections should be on a monthly basis the first year, a quarterly basis the second year, and annually thereafter.
Make sure you allocate for returned books (20%?) and bad debt. Also take into consideration the 90 -120 day payment policies of retailers and distributors.
It will take a considerable amount of time to create this document the first time, but it will be well worth the effort. You will have a prepared list of actions to take to sell more books. Your objective will be there to motivate you to work more, and your budgets will keep you fiscally responsible.Brian Jud is the author of fourteen job-search titles as well as the video You’re On The Air and its two companion guides, Perpetual Promotion and It’s Show Time. He can be reached at PO Box 715, Avon, CT 06001-0715, phone 800/562-4357, fax 860/676-0759, e-mail BJud@marketingdirections.com. His website address is http://www.marketingdirections.com.
This article is from thePMA Newsletterfor March, 1998, and is reprinted with permission of Publishers Marketing Association.