Every business has something to sell, and the product section is where you tell readers what it is you’re selling. (For simplicity’s sake, the term “product” is used to refer to both products and services unless otherwise indicated.) This is clearly a very important section of your plan. Even if you have assembled a brilliant managerial team, or have strong financial underpinnings, unless you have something to sell or at least plans to develop something new, you don’t really have a business at all. Business is about providing people with something they need. Your business should solve a problem, make life easier, expedite a process, or even simply entertain, but you need to be selling something to have a business.
Although many businesses are founded to develop new, never-before-seen products, they’re still built around a product, even though it may not exist at the moment. And even for these development-stage enterprises, it’s just as important to describe the planned-for product and make a presentation that illustrates what people can expect.
What Is Your Product or Service?
It’s easy to talk eloquently about a product you believe in. Some highly marketing-oriented businesses, in fact, are built as much on the ability to wax rhapsodic about a product as they are on the ability to buy or source compelling products to begin with. Think of J. Peterman, the catalog operation that became famous—and highly successful—by selling prosaic products with the help of romantic, overblown advertising copy, prior to going bankrupt in 1999.
It’s important in your plan to be able to build a convincing case for the product or service upon which your business will be built. The product description section is where you do that.
Product Description Worksheet
Features describe the make, shape, form, or appearance of a product, the characteristics that you use to describe products. These features convey benefits to the customer. Benefits (perceived benefits) are the emotional or other end results that your product or service provides that customer, the satisfaction or fulfillment of needs that a customer receives from your products or services. In the famous phrase, “My factories make cosmetics, we sell hope,” cosmetics are the products, hope is the benefit.
Here are a few sample product descriptions:
Street Beat is a new type of portable electronic rhythm machine used to create musical backgrounds for street dances, fairs, concerts, picnics, sporting events, and other outdoor productions. The product is less costly than a live rhythm section and offers better sound quality than competing systems. Its combination of features will appeal to sports promoters, fair organizers, and charitable and youth organizations.
Troubleshooting Times is the only monthly magazine for the nation’s 6,000 owners of electronics repair shops. It provides timely news of industry trends, service product reviews, and consumer product service tips written in a language service shop owners can understand.
HOBO, the Home Business Organization, provides business consulting services to entrepreneurs who work out of their homes. The group connects home business owners with experts who have extensive experience counseling home business owners in management, finance, marketing, and lifestyle issues. Unlike entrepreneurial peer groups, which charge members for attending sessions whether or not they receive useful advice, HOBO will guarantee its services, asking home business owners to pay only if they derive solid benefit from the service.
A business plan product description has to be less image-conscious than an advertising brochure but more appealing than a simple spec sheet. You don’t want to give the appearance of trying to dazzle readers with a glitzy product sales pitch filled with a lot of hype. On the other hand, you want to give them a sampling of how you are going to position and promote the product.
And remember, a business plan product description is not only concerned with consumer appeal. Issues of manufacturability are of paramount concern to plan readers, who may have seen any number of plans describing exciting products that, in the end, proved impossible to design and build economically.
If your product or service has special features that will make it easy to build and distribute, say so. For instance, the portable rhythm machine maker should point out in the business plan that the devices will be constructed using new special-purpose integrated circuits derived from military applications, which will vastly increase durability and quality while reducing costs.
Plan Pointer: Get Creative
No ideas to differentiate your product? Steal someone else’s. That is, combine your product with another to create something new. Dry cleaners do this when they offer coupons for the neighborhood pizza parlor—which gives out cleaning coupons with each pie. It’s called cooperative marketing.