What to Include in Your Products and Services Section
Hello again and welcome to the next segment of our blog series – Product and Services. In the last chapter we talked about your management team and how important it is to highlight their skills and experience. In this chapter your actual product or service will take center stage and the lights need to be brighter than ever. Potential investors want to know why it’s so great, how it stacks up against the competition and how it benefits customers. And if you answer these questions correctly, you may produce an investor and a new customer.
As we stated before, this blog series is inspired by the Entrepreneur staff’s “How to Write Your Business Plan” collection but the SBA offers some quality advice as well. The U.S. Small Business Association has a very similar set of articles on writing a business plan so today we will feature some of their ideas. A good or bad product and services write-up can make or break your business plan – so let’s focus and get down to business.
One of the best ways to achieve success at this task is to glorify your USP – or unique selling proposition. A tactfully-written USP will project your product or service as a one-of-a-kind masterpiece. When your readers are done with this section they should be 100% confident that your product or service is elite and can outperform any and all competition. You want to leave no doubt in their minds that this is a great opportunity and the time to act is now.
You may not need to emphasize all of the following points, but for the sake of our broad audience, we will explain a variety of topics. Here are some key points to mention in the product and services chapter of your business plan and maximize your USP:
Business Plan Product Section – Uniqueness of Product/Service
This should be the most fun section to write. This is your opportunity to highlight all of the groundbreaking and revolutionary aspects of your creation. Feel free to add quotes and commentary from your engineers or an expert in the industry who will add clout to your product/service. High definition images may assist you in explaining complicated machinery or technology, and make sure to provide simple definitions that everyone will understand.
Business Plan Product Section – Competitive Advantages
We found this amazing passage on determining your competitive advantages on the website of Stanford University: Perform a detailed assessment of the company’s own strengths, weaknesses, and assets. Think about which ones potentially can be developed into competitive advantages, taking into account important internal and external factors (such as the availability of time, money, and necessary connections). Evaluate how the company’s competitive advantages align with the most urgent and important needs of customers in the market, as well as the strengths and weaknesses of competitors. Evaluate whether they are positional or capability-based advantages and how sustainable they are. Then, prioritize the list of potential advantages based on the likelihood that they could be achieved, sustained, and utilized to effectively differentiate the company.
Business Plan Product Section -Benefits to Customers
It’s safe to say very few products in history have sold without benefiting the customer. The reason a customer buys a product or pays for a service is to enhance their life. Making these benefits clear to a potential investor will allow them to understand why people will buy your product/service and make their equity grow. Here is a solid list of customer benefits to choose from. Be sure to add a brief explanation of how customers will experience the chosen benefits:
Business Plan Product Section – Pricing Policy & Strategy
Price is one of the four key elements of the marketing mix: product, place, price and promotion. When breaking down your pricing policy and strategy, remember once again that the majority of your audience will not understand complex marketing language. If you plan to talk about current profit maximization or partial cost recovery, make sure you write for your audience. If you need to be sure of your language, have a friend or family member read through it and point out what they don’t understand. Your friends and family will hopefully be your first investors, so it is very important for them to understand!
Business Plan Product Section – Lifecycle of the Product
Not all equity crowdfunding campaigns will be brand new companies seeking their first round of capital. If a product or service is in need of its 2nd, 3rd or 15th round of funding, you will need to tell your potential investors where your product is in its lifecycle. The lifecycle consists of the day you thought of the idea for the product or service and the day it is taken off the market. The four product lifecycle phases are introduction, growth, maturity and decline. Please click the following link for an in-depth look into this topic: Business Scene product life cycle.
There are several other subjects you can discuss in the product section, such as Intellectual Property and Research and Development (R&D), but it is all relevant to what the product or service is. Use your best judgment on what details you need to share and what will put your product or service in the best light for potential investors. The investor should walk away from this section feeling excited and special like they just read exclusive information about “the next big thing.”
In tomorrow’s article we will wrap our blog series and feature four topics in one blog: Industry, Marketing, Operations and Financial.
Thank you for reading and please leave your questions and comments below!