A goal properly set is halfway reached
This is the time of the year where most companies need to deliver their next-year business plan. The idea alone is a nightmare for too many managers and marketing executives. We have to acknowledge it is a painful process. Especially cause most of us focus on the wrong problem.
How to start a Business Plan
Set an achievable goal
If you are the offensive-coach of a football team and start without asking every single one of your players for X number of rushing yards, or Y number of completed passes. You are doing it wrong.
Most definitely, if you start your business plan without a solid goal, you will fail, because you don’t know where you want to go, therefore, you’ll never get there.
Review your product strategy
Home much did you sell this year?
Sun Tzu said “Know your enemy and know yourself, find naught in fear for 100 battles” before go out there to research others research yourself. Learn from yourself, learn from the mistakes you made this year and move on, but more important than that is to learn from your success.
101 – Know yourself
Review all sales, considering cycles, seasonality and every possible variable. Make sure to attribute success to the right variables, set them apart, create a statistical approach if you have the tools for it, or follow an objective logic if not. Also consider that across markets you may have different approaches. People in Napa valley are more likely to have a car than people from Manhattan
Distribution (People / Channels)
Now that you know which products generate 80% of your revenue, you can move forward and analyze the distribution (the people / channels) used to sell your products. Ask yourself these questions.
- Who were the top performers?
- Why did they get to sell more than the average?
- How did they do it?
- Is it the markets?
- If it is the markets what do they have in common?
- Is there a drastic change in one market?
- What are the trends that can be expected for the upcoming year?
What do we have so far?
- We sold 15 million USD
- We sold 21 different products across 13 markets. 5 of those products represent 64% of our revenue
- The markets A, B, D and G experienced change. While market G grew significantly, markets A, B and D lost share.
- The Y-segment started purchasing our products 3 months ago helping us increase sales in the market G.
A solid marketing plan will be to present last year figures, consider the needs of the company for new revenue, create a marketing strategy that will increase the sales of your main products and alternative scenarios, where you can bring together strategies to market your products through new distribution channels.
If you company needs 25 million USD in sales for the upcoming year, that means you have to increase your sales almost 70% to meet your quota.
You want to present the board members with a bullet-proof plan. It really depends on what kind of situation you are in. Yo can always pursue one of this strategies
- Restructure to increase prices
- Lower inventory in poor-performing products
- Clear inventory on poor-performing products
- Creating a synergy with your top performers
You are in a service oriented industry. Then you may not have inventory, but you have a quota to make. You have to consider whether or not paying commissions the way you are doing it is really making any money for the company.
These articles are developed to show the logic behind one of many ways to create a marketing plan. The success depends on the implementation.
Part 2 – Know the enemy
Part 3 – How to win the battle