How to write the product and services section of a business plan
When writing a business plan, you will talk about many things of a necessity. This is one of the reasons why a well-rounded knowledge of the business environment forms a critical requirement for anyone who will write a good business plan. It is important for entrepreneurs and business owners to be very vast in the world of business. Without actively developing yourself across the many-sided faces of the business environment, being able to write a good business plan becomes a mere dream from which you may never wake up.
What is the product and services section of a business plan?
So, in this article, we will be looking at one of the many aspects that you will need to write on when creating a business plan, and that aspect is called “The Product and Services Section” of the business plan document. Like the name would have hinted, this part of your business plan is where you tell the readers of your business plan document all that you want them to know about the products you create and sell, or the services which you offer. So, all the talks about what you produce, sell and offer; how you go about producing or selling them; and the benefits which your customers or buyers get from your offerings – are all discussed here in the products and services section of the business plan. This is where you get all the chances to portray your goods and services as what people really need and should have. Also, you will need to explain the processes that goes into getting your products from the mind (when it was just and idea) to the market (when people are now consuming it) – this will include explanation of important steps such as purchasing, manufacturing, packaging and, of course, distribution and sales.
What should you include in the product and service section of your business plan?
This being a technical aspect of your business plan, you need a lot of care and understanding if you must make sense of it. Knowing the important things to include is as critical as creating a successful business plan. So, here, we highlight a few things you must always remember to include when writing the product and services section of your business plan.
- The description of the product and services you offer: If people do not know about what you sell, or worse still, if they do not know why they need your products or services, if they do not even understand it, or how to use it or apply it, then why should the patronize you. This is so critical and cannot be overemphasized
- The analysis of your comparative advantage: Like the saying goes, “There is nothing new under the sun”, no matter what problem you have identified and are trying to solve, most likely, some people are already doing something similar in a way. So, in the most basic sense, there is really nothing new anywhere. However, for your business or product to be successful your unique selling proposition must be quite clear. There must be something different, peculiar and special about your solution that distinguishes your offer from that of your competitors, or from rival products in the market. The products and services section of your business plan presents an ample opportunity for you to tell anyone who cares to read your business plan about what makes your product special. You want to tell us why people should buy your product X, and not buy similar products A, B, and C. If this is not clearly stated in the products and services section of your business plan document, the weight of the business plan itself is reduced by 40% and the capacity of the business plan to achieve the original purpose why it was written might have been compromised to a great extent – and this is the truth. This is simply because one of the key things that determines the success of a business or product, among other things, is its unique selling proposition (USP).
- Your production process: Hey, be very careful here. When I tell you to include your production process in the products and services section of your business plan, I do not mean you should expose your business secrets and tell the whole world things that competitors can use against you. You must be very wise and tactical when writing this part. However, investors and lenders are interested in some basic information that shows that your production process is sensible and makes for profitability. They want to be sure that your production process isn’t prone to errors and losses. They need all the required information that they need to determine if the money they are giving you is going into a venture that has a high prospect for success. There are many things financial institutions and investors want to check to decide on how to interact with you and your business, your production process is one of them – and whenever it is missing, you do not stand a very good chance. So, it is a critical factor you must take seriously. A good example here would be for you to give facts pointing to the fact that you have done due diligence in your sourcing and that raw materials shortage will never come up at any point in your production projection over a certain period of time.
- Legal or regulatory issues: Even when your business idea sounds good, has a lot of money-making and scalability prospects, lenders and investors want to know if there are hidden risks that put their investment at jeopardy. So, they want to know about anything that constitute the legal and regulatory side of the business. Issues such as licensing, incorporations, approvals, regulations, associations, related-laws, etc. would normally raise the curiosity of investors – and a wise entrepreneur would want to take care of that aspect. It is always a wise thing to close all gaps that can raise suspicion and ultimately put you on the losing end of financing.
The above points aren’t exhaustive I must say, but they are some of the basic components of the products and services section of a business plan that wins.
A quick guideline for writing the products and service section of a business plan
- Describe the problem you are trying to solve vividly in a way that people having such problem can easily relate with and then, present your product or service as the needed solution. However you do this, you must sound convincing. This would have established for you a market communication that will help you win not just the heart of target customers but that of investors as well.
- Include every important detail: All of the recommended elements listed above are important, and more.
- Write in plain and simple language: Avoid technical jargons. Communicate simply in a way that anyone can understand, do not assume everyone else knows and understands everything that you do. Imagine that the person who will read your document knows nothing about your industry and that he/she only understands only plain and simple English. Big words won’t impress anyone, it will only make your proposal end in the bin, at best.
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