A home-based entrepreneur is faced with unique challenges to overcome. Foremost of these is the negative stereotype that potential customers may have on home-based businesses. Many people still look at home-based businesses as part-time or temporary employment, makeshift operations run from the garage, or worse, not “real” businesses.
In order to overcome these misconceptions, you must have a well-thought-out plan on how to present the business to customers and generate the kind of sales that your business needs. You must develop a solid marketing plan that will direct the way that you communicate your business to target customers.
Your Marketing Plan
According to Kim Gordon in her book “Growing Your Home-Based Business: A Complete Guide to Proven Sales and Marketing Strategies,” a good marketing plan is “a blueprint for action that will perform a number of highly critical functions.” Writing your marketing plan can help you identify the most cost-effective strategies you can use to present your business to your target audience.
A written marketing plan can help you save money by avoiding unnecessary or impulsive expenditures. Everyday, you will be presented with various marketing communication opportunities. You may receive an offer in the mail to create CD-ROM business cards, or a request to sponsor a local festival, or a request for a radio interview. By planning ahead, it will be easier for you to decide what works for your business, what fits your budget, and what reaches your audience. Your marketing plan will keep activities and budgets on track year-round.
Gordon also adds that the “lack of a comprehensive marketing plan can lead to dramatic repercussions, not the least of which is a fall-off in sales.” You may not be tapping all possible means of reaching your audience, resulting in lackluster sales. Having a marketing plan can also help prevent important communications activities from falling by the wayside during even the busiest times of the year.
Outline of a Marketing Plan
Your written marketing plan need not be lengthy and complicated. You can even make it as simple as possible. It is an internal document where you can be honest and direct when describing your company’s weaknesses.
Gordon suggests the following outline:
1. Situation Analysis.
Your first step is to take a comprehensive look at your company’s challenges, its position in the market place, level and intensity of competition, and other factors that may affect your marketing strategies. This is the market research portion of your plan.
- Challenges. When you open your business, you are faced with the huge task of letting your target market know that you exist, and willing to serve their needs. You are faced with the challenge of communicating with your target market to get them to become your customers.
- Position in the marketplace. Your promotional strategy should highlight the “unique selling points” of your business.
- Competition. This involves a complete analysis of the businesses already offering your type of goods and services within your geographical area (e.g. county, town, and city). You want to learn how many businesses are already in the marketplace, what they offer, and where they are located. By looking at this data, you can identify the relative strengths and weaknesses of your competitors in the area of price, quality, selection, promotion, services, customer service/personnel support, facilities/atmosphere, and location.
2. Target Audience.
One of the most important segments of your market analysis involves identifying the people or businesses that may have a desire to purchase your type of product or service. The key is to know who buys what, how often, from whom, and what they may be looking for. If you are operating in a broad geographical market, you may have several target group – the primary, secondary, and so on. Your marketing plan should concentrate on reaching your primary audience, and allocating smaller budgets for the secondary market.
- Profile of primary audience. You should identify the number of potential customers, who they are, how often they buy, who they are currently buying from, how much they spend, and if they are brand or store loyal. This group is the segment of the market that will consume your type of goods and services, and hopefully still in search of a business to patronize. If you are a wedding planner, your main market is the engaged couple planning to get married within a definite time frame.
- Secondary audience. Utilizing a rifle approach, your secondary audience is those in the periphery of your main target group.
Marketing objectives quantify the results you are looking to achieve. By clearly stating these results in advance, you provide performance criteria against which your future results can be compared. Whatever marketing objectives you decide on, they should meet certain criteria. They must be realistic, measurable, and be guided by short, medium and long-term deadlines.
- Profit. Profit objectives state the bottom line progress you want your marketing efforts to achieve. You may set the goal of achieving 2 percent profit in your first year, and increasing it by 10 percent every year hereafter.
- Market share. Market share objectives state your desired cut of the total industry sales pie, or at least the local industry. If the total revenue of all the wedding planners in your county is $2 million, how much of that is yours? If you only have 2% of that pie, you may want to increase your share to about 10% after launching your marketing campaign.
- Sales volume target. Your sales volume affects your cost structure: the higher the sales that you generate, the lower your cost. Specific sales volume levels can give you more bargaining power with your suppliers. Sales volume objectives should clearly state the total goods or services you intend to deliver. Your goal can be to increase your sales in the next two months after a marketing campaign by $10,000.
This is the core of your marketing plan. It contains a complete breakdown of marketing activities that you plan to undertake.
- Marketing communications platform. Your promotional strategy must address the who, what, where and how much money to spend.
- Marketing tools. Describe how each and every marketing tool will be used and the purpose. Tools can include advertising, public relations, special promotions and direct mail. Clarify how direct mail is to be utilized and who will receive it. Each component of your promotional mix plans a role in your effort to have potential customers learn about your business and buy your goods or services.
- Media rationale. This section details how your messages will reach target audiences, including the list of publications where your ads will appear, ad sizes and costs.
- Media Schedule. Media schedule is what is called in the industry as “insertion dates” or when your ads will appear. If you are running radio ads, for example, this will include the list of stations that will carry the ad, the duration, target audience, schedule reach and frequency, and costs.
Once your planning is complete, prepare a calendar that will list the schedule of your strategies and specific activities. Your schedule must be balanced between executing your marketing strategies and time for crucial lead generation.
The final section of your marketing plan is to determine your budget, making sure that you have the funds to cover your production, printing, media and other miscellaneous expenses.
- Production. This can include the creation of your logo design, stationery, mailing labels, company brochure, photography used, advertising and direct mail costs.
- Printing. This will cover the printing costs of your letterhead and envelopes, company brochures, and direct mail.
- Media. This is the cost of buying media for your print ads, radio ads and other tactics.
- Miscellaneous. Other costs that may be incurred such as postage, holiday cards, thank you notes and others.
Recommended Books on How to Create a Marketing Plan:
- Breakthrough Marketing Plans: How to Stop Wasting Time and Start Driving Growth
- Marketing Plans: How to Prepare Them, How to Use Them
- The Marketing Plan Handbook, 3rd Edition
- The Successful Marketing Plan: How to Create Dynamic, Results Oriented Marketing, 4th Edition
- The Marketing Plan: How to Prepare and Implement It
- Marketing to the Right Audience
- Advantages and Disadvantages of Various Advertising Mediums
- How to Create an Effective Marketing Plan
- Pros and Cons of Financing a Business
- Knowing Your Media Market Is Critical