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How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated May 7, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

Free business plan templates and examples

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How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan
• Templates and examples

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How to Write a Business Plan in 9 Steps (+ Template and Examples)

Every successful business has one thing in common, a good and well-executed business plan. A business plan is more than a document, it is a complete guide that outlines the goals your business wants to achieve, including its financial goals . It helps you analyze results, make strategic decisions, show your business operations and growth.

If you want to start a business or already have one and need to pitch it to investors for funding, writing a good business plan improves your chances of attracting financiers. As a startup, if you want to secure loans from financial institutions, part of the requirements involve submitting your business plan.

Writing a business plan does not have to be a complicated or time-consuming process. In this article, you will learn the step-by-step process for writing a successful business plan.

You will also learn what you need a business plan for, tips and strategies for writing a convincing business plan, business plan examples and templates that will save you tons of time, and the alternatives to the traditional business plan.

Let’s get started.

What Do You Need A Business Plan For?

Businesses create business plans for different purposes such as to secure funds, monitor business growth, measure your marketing strategies, and measure your business success.

1. Secure Funds

One of the primary reasons for writing a business plan is to secure funds, either from financial institutions/agencies or investors.

For you to effectively acquire funds, your business plan must contain the key elements of your business plan . For example, your business plan should include your growth plans, goals you want to achieve, and milestones you have recorded.

A business plan can also attract new business partners that are willing to contribute financially and intellectually. If you are writing a business plan to a bank, your project must show your traction , that is, the proof that you can pay back any loan borrowed.

Also, if you are writing to an investor, your plan must contain evidence that you can effectively utilize the funds you want them to invest in your business. Here, you are using your business plan to persuade a group or an individual that your business is a source of a good investment.

2. Monitor Business Growth

A business plan can help you track cash flows in your business. It steers your business to greater heights. A business plan capable of tracking business growth should contain:

• The business goals
• Methods to achieve the goals
• Time-frame for attaining those goals

A good business plan should guide you through every step in achieving your goals. It can also track the allocation of assets to every aspect of the business. You can tell when you are spending more than you should on a project.

You can compare a business plan to a written GPS. It helps you manage your business and hints at the right time to expand your business.

3. Measure Business Success

A business plan can help you measure your business success rate. Some small-scale businesses are thriving better than more prominent companies because of their track record of success.

Right from the onset of your business operation, set goals and work towards them. Write a plan to guide you through your procedures. Use your plan to measure how much you have achieved and how much is left to attain.

You can also weigh your success by monitoring the position of your brand relative to competitors. On the other hand, a business plan can also show you why you have not achieved a goal. It can tell if you have elapsed the time frame you set to attain a goal.

4. Document Your Marketing Strategies

You can use a business plan to document your marketing plans. Every business should have an effective marketing plan.

Competition mandates every business owner to go the extraordinary mile to remain relevant in the market. Your business plan should contain your marketing strategies that work. You can measure the success rate of your marketing plans.

In your business plan, your marketing strategy must answer the questions:

• How do you want to reach your target audience?
• How do you plan to retain your customers?
• What is/are your pricing plans?
• What is your budget for marketing?

How to Write a Business Plan Step-by-Step

1. create your executive summary.

The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans . Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.

Generally, there are nine sections in a business plan, the executive summary should condense essential ideas from the other eight sections.

A good executive summary should do the following:

• A Snapshot of Growth Potential. Briefly inform the reader about your company and why it will be successful)
• Contain your Mission Statement which explains what the main objective or focus of your business is.
• Product Description and Differentiation. Brief description of your products or services and why it is different from other solutions in the market.
• The Team. Basic information about your company’s leadership team and employees
• Business Concept. A solid description of what your business does.
• Target Market. The customers you plan to sell to.
• Marketing Strategy. Your plans on reaching and selling to your customers
• Current Financial State. Brief information about what revenue your business currently generates.
• Projected Financial State. Brief information about what you foresee your business revenue to be in the future.

The executive summary is the make-or-break section of your business plan. If your summary cannot in less than two pages cannot clearly describe how your business will solve a particular problem of your target audience and make a profit, your business plan is set on a faulty foundation.

Avoid using the executive summary to hype your business, instead, focus on helping the reader understand the what and how of your plan.

View the executive summary as an opportunity to introduce your vision for your company. You know your executive summary is powerful when it can answer these key questions:

• Who is your target audience?
• What sector or industry are you in?
• What are your products and services?
• What is the future of your industry?
• Is your company scaleable?
• Who are the owners and leaders of your company? What are their backgrounds and experience levels?
• What is the motivation for starting your company?
• What are the next steps?

Writing the executive summary last although it is the most important section of your business plan is an excellent idea. The reason why is because it is a high-level overview of your business plan. It is the section that determines whether potential investors and lenders will read further or not.

The executive summary can be a stand-alone document that covers everything in your business plan. It is not uncommon for investors to request only the executive summary when evaluating your business. If the information in the executive summary impresses them, they will ask for the complete business plan.

If you are writing your business plan for your planning purposes, you do not need to write the executive summary.

2. Add Your Company Overview

The company overview or description is the next section in your business plan after the executive summary. It describes what your business does.

Adding your company overview can be tricky especially when your business is still in the planning stages. Existing businesses can easily summarize their current operations but may encounter difficulties trying to explain what they plan to become.

Your company overview should contain the following:

• What products and services you will provide
• Geographical markets and locations your company have a presence
• What you need to run your business
• Who your target audience or customers are
• Who will service your customers
• Your company’s purpose, mission, and vision
• Information about your company’s founders
• Who the founders are
• Notable achievements of your company so far

When creating a company overview, you have to focus on three basics: identifying your industry, identifying your customer, and explaining the problem you solve.

If you are stuck when creating your company overview, try to answer some of these questions that pertain to you.

• Who are you targeting? (The answer is not everyone)
• What pain point does your product or service solve for your customers that they will be willing to spend money on resolving?
• How does your product or service overcome that pain point?
• Where is the location of your business?
• What products, equipment, and services do you need to run your business?
• How is your company’s product or service different from your competition in the eyes of your customers?
• How many employees do you need and what skills do you require them to have?

After answering some or all of these questions, you will get more than enough information you need to write your company overview or description section. When writing this section, describe what your company does for your customers.

The company description or overview section contains three elements: mission statement, history, and objectives.

• Mission Statement

The mission statement refers to the reason why your business or company is existing. It goes beyond what you do or sell, it is about the ‘why’. A good mission statement should be emotional and inspirational.

Your mission statement should follow the KISS rule (Keep It Simple, Stupid). For example, Shopify’s mission statement is “Make commerce better for everyone.”

When describing your company’s history, make it simple and avoid the temptation of tying it to a defensive narrative. Write it in the manner you would a profile. Your company’s history should include the following information:

• Founding Date
• Major Milestones
• Location(s)
• Flagship Products or Services
• Number of Employees
• Executive Leadership Roles

When you fill in this information, you use it to write one or two paragraphs about your company’s history.

Business Objectives

Your business objective must be SMART (specific, measurable, achievable, realistic, and time-bound.) Failure to clearly identify your business objectives does not inspire confidence and makes it hard for your team members to work towards a common purpose.

3. Perform Market and Competitive Analyses to Proof a Big Enough Business Opportunity

The third step in writing a business plan is the market and competitive analysis section. Every business, no matter the size, needs to perform comprehensive market and competitive analyses before it enters into a market.

Performing market and competitive analyses are critical for the success of your business. It helps you avoid entering the right market with the wrong product, or vice versa. Anyone reading your business plans, especially financiers and financial institutions will want to see proof that there is a big enough business opportunity you are targeting.

This section is where you describe the market and industry you want to operate in and show the big opportunities in the market that your business can leverage to make a profit. If you noticed any unique trends when doing your research, show them in this section.

Market analysis alone is not enough, you have to add competitive analysis to strengthen this section. There are already businesses in the industry or market, how do you plan to take a share of the market from them?

You have to clearly illustrate the competitive landscape in your business plan. Are there areas your competitors are doing well? Are there areas where they are not doing so well? Show it.

Make it clear in this section why you are moving into the industry and what weaknesses are present there that you plan to explain. How are your competitors going to react to your market entry? How do you plan to get customers? Do you plan on taking your competitors' competitors, tap into other sources for customers, or both?

Illustrate the competitive landscape as well. What are your competitors doing well and not so well?

Answering these questions and thoughts will aid your market and competitive analysis of the opportunities in your space. Depending on how sophisticated your industry is, or the expectations of your financiers, you may need to carry out a more comprehensive market and competitive analysis to prove that big business opportunity.

Instead of looking at the market and competitive analyses as one entity, separating them will make the research even more comprehensive.

Market Analysis

Market analysis, boarding speaking, refers to research a business carried out on its industry, market, and competitors. It helps businesses gain a good understanding of their target market and the outlook of their industry. Before starting a company, it is vital to carry out market research to find out if the market is viable.

The market analysis section is a key part of the business plan. It is the section where you identify who your best clients or customers are. You cannot omit this section, without it your business plan is incomplete.

A good market analysis will tell your readers how you fit into the existing market and what makes you stand out. This section requires in-depth research, it will probably be the most time-consuming part of the business plan to write.

• Market Research

To create a compelling market analysis that will win over investors and financial institutions, you have to carry out thorough market research . Your market research should be targeted at your primary target market for your products or services. Here is what you want to find out about your target market.

• Your target market’s needs or pain points
• The existing solutions for their pain points
• Geographic Location
• Demographics

The purpose of carrying out a marketing analysis is to get all the information you need to show that you have a solid and thorough understanding of your target audience.

Only after you have fully understood the people you plan to sell your products or services to, can you evaluate correctly if your target market will be interested in your products or services.

You can easily convince interested parties to invest in your business if you can show them you thoroughly understand the market and show them that there is a market for your products or services.

How to Quantify Your Target Market

One of the goals of your marketing research is to understand who your ideal customers are and their purchasing power. To quantify your target market, you have to determine the following:

• Your Potential Customers: They are the people you plan to target. For example, if you sell accounting software for small businesses , then anyone who runs an enterprise or large business is unlikely to be your customers. Also, individuals who do not have a business will most likely not be interested in your product.
• Total Households: If you are selling household products such as heating and air conditioning systems, determining the number of total households is more important than finding out the total population in the area you want to sell to. The logic is simple, people buy the product but it is the household that uses it.
• Median Income: You need to know the median income of your target market. If you target a market that cannot afford to buy your products and services, your business will not last long.
• Income by Demographics: If your potential customers belong to a certain age group or gender, determining income levels by demographics is necessary. For example, if you sell men's clothes, your target audience is men.

What Does a Good Market Analysis Entail?

Your business does not exist on its own, it can only flourish within an industry and alongside competitors. Market analysis takes into consideration your industry, target market, and competitors. Understanding these three entities will drastically improve your company’s chances of success.

You can view your market analysis as an examination of the market you want to break into and an education on the emerging trends and themes in that market. Good market analyses include the following:

• Industry Description. You find out about the history of your industry, the current and future market size, and who the largest players/companies are in your industry.
• Overview of Target Market. You research your target market and its characteristics. Who are you targeting? Note, it cannot be everyone, it has to be a specific group. You also have to find out all information possible about your customers that can help you understand how and why they make buying decisions.
• Size of Target Market: You need to know the size of your target market, how frequently they buy, and the expected quantity they buy so you do not risk overproducing and having lots of bad inventory. Researching the size of your target market will help you determine if it is big enough for sustained business or not.
• Growth Potential: Before picking a target market, you want to be sure there are lots of potential for future growth. You want to avoid going for an industry that is declining slowly or rapidly with almost zero growth potential.
• Market Share Potential: Does your business stand a good chance of taking a good share of the market?
• Market Pricing and Promotional Strategies: Your market analysis should give you an idea of the price point you can expect to charge for your products and services. Researching your target market will also give you ideas of pricing strategies you can implement to break into the market or to enjoy maximum profits.
• Potential Barriers to Entry: One of the biggest benefits of conducting market analysis is that it shows you every potential barrier to entry your business will likely encounter. It is a good idea to discuss potential barriers to entry such as changing technology. It informs readers of your business plan that you understand the market.
• Research on Competitors: You need to know the strengths and weaknesses of your competitors and how you can exploit them for the benefit of your business. Find patterns and trends among your competitors that make them successful, discover what works and what doesn’t, and see what you can do better.

The market analysis section is not just for talking about your target market, industry, and competitors. You also have to explain how your company can fill the hole you have identified in the market.

Here are some questions you can answer that can help you position your product or service in a positive light to your readers.

• Is your product or service of superior quality?
• What additional features do you offer that your competitors do not offer?
• Are you targeting a ‘new’ market?

Basically, your market analysis should include an analysis of what already exists in the market and an explanation of how your company fits into the market.

Competitive Analysis

In the competitive analysis section, y ou have to understand who your direct and indirect competitions are, and how successful they are in the marketplace. It is the section where you assess the strengths and weaknesses of your competitors, the advantage(s) they possess in the market and show the unique features or qualities that make you different from your competitors.

Many businesses do market analysis and competitive analysis together. However, to fully understand what the competitive analysis entails, it is essential to separate it from the market analysis.

Competitive analysis for your business can also include analysis on how to overcome barriers to entry in your target market.

The primary goal of conducting a competitive analysis is to distinguish your business from your competitors. A strong competitive analysis is essential if you want to convince potential funding sources to invest in your business. You have to show potential investors and lenders that your business has what it takes to compete in the marketplace successfully.

Competitive analysis will s how you what the strengths of your competition are and what they are doing to maintain that advantage.

When doing your competitive research, you first have to identify your competitor and then get all the information you can about them. The idea of spending time to identify your competitor and learn everything about them may seem daunting but it is well worth it.

Find answers to the following questions after you have identified who your competitors are.

• What are your successful competitors doing?
• Why is what they are doing working?
• Can your business do it better?
• What are the weaknesses of your successful competitors?
• What are they not doing well?
• Can your business turn its weaknesses into strengths?
• How good is your competitors’ customer service?
• Where do your competitors invest in advertising?
• What sales and pricing strategies are they using?
• What marketing strategies are they using?
• What kind of press coverage do they get?
• What are their customers saying about your competitors (both the positive and negative)?

If your competitors have a website, it is a good idea to visit their websites for more competitors’ research. Check their “About Us” page for more information.

If you are presenting your business plan to investors, you need to clearly distinguish yourself from your competitors. Investors can easily tell when you have not properly researched your competitors.

Take time to think about what unique qualities or features set you apart from your competitors. If you do not have any direct competition offering your product to the market, it does not mean you leave out the competitor analysis section blank. Instead research on other companies that are providing a similar product, or whose product is solving the problem your product solves.

The next step is to create a table listing the top competitors you want to include in your business plan. Ensure you list your business as the last and on the right. What you just created is known as the competitor analysis table.

Direct vs Indirect Competition

You cannot know if your product or service will be a fit for your target market if you have not understood your business and the competitive landscape.

There is no market you want to target where you will not encounter competition, even if your product is innovative. Including competitive analysis in your business plan is essential.

If you are entering an established market, you need to explain how you plan to differentiate your products from the available options in the market. Also, include a list of few companies that you view as your direct competitors The competition you face in an established market is your direct competition.

In situations where you are entering a market with no direct competition, it does not mean there is no competition there. Consider your indirect competition that offers substitutes for the products or services you offer.

For example, if you sell an innovative SaaS product, let us say a project management software , a company offering time management software is your indirect competition.

There is an easy way to find out who your indirect competitors are in the absence of no direct competitors. You simply have to research how your potential customers are solving the problems that your product or service seeks to solve. That is your direct competition.

Factors that Differentiate Your Business from the Competition

There are three main factors that any business can use to differentiate itself from its competition. They are cost leadership, product differentiation, and market segmentation.

1. Cost Leadership

A strategy you can impose to maximize your profits and gain an edge over your competitors. It involves offering lower prices than what the majority of your competitors are offering.

A common practice among businesses looking to enter into a market where there are dominant players is to use free trials or pricing to attract as many customers as possible to their offer.

2. Product Differentiation

Your product or service should have a unique selling proposition (USP) that your competitors do not have or do not stress in their marketing.

Part of the marketing strategy should involve making your products unique and different from your competitors. It does not have to be different from your competitors, it can be the addition to a feature or benefit that your competitors do not currently have.

3. Market Segmentation

As a new business seeking to break into an industry, you will gain more success from focusing on a specific niche or target market, and not the whole industry.

If your competitors are focused on a general need or target market, you can differentiate yourself from them by having a small and hyper-targeted audience. For example, if your competitors are selling men’s clothes in their online stores , you can sell hoodies for men.

4. Define Your Business and Management Structure

The next step in your business plan is your business and management structure. It is the section where you describe the legal structure of your business and the team running it.

Your business is only as good as the management team that runs it, while the management team can only strive when there is a proper business and management structure in place.

If your company is a sole proprietor or a limited liability company (LLC), a general or limited partnership, or a C or an S corporation, state it clearly in this section.

Use an organizational chart to show the management structure in your business. Clearly show who is in charge of what area in your company. It is where you show how each key manager or team leader’s unique experience can contribute immensely to the success of your company. You can also opt to add the resumes and CVs of the key players in your company.

The business and management structure section should show who the owner is, and other owners of the businesses (if the business has other owners). For businesses or companies with multiple owners, include the percent ownership of the various owners and clearly show the extent of each others’ involvement in the company.

Investors want to know who is behind the company and the team running it to determine if it has the right management to achieve its set goals.

Management Team

The management team section is where you show that you have the right team in place to successfully execute the business operations and ideas. Take time to create the management structure for your business. Think about all the important roles and responsibilities that you need managers for to grow your business.

Include brief bios of each key team member and ensure you highlight only the relevant information that is needed. If your team members have background industry experience or have held top positions for other companies and achieved success while filling that role, highlight it in this section.

A common mistake that many startups make is assigning C-level titles such as (CMO and CEO) to everyone on their team. It is unrealistic for a small business to have those titles. While it may look good on paper for the ego of your team members, it can prevent investors from investing in your business.

Instead of building an unrealistic management structure that does not fit your business reality, it is best to allow business titles to grow as the business grows. Starting everyone at the top leaves no room for future change or growth, which is bad for productivity.

Your management team does not have to be complete before you start writing your business plan. You can have a complete business plan even when there are managerial positions that are empty and need filling.

If you have management gaps in your team, simply show the gaps and indicate you are searching for the right candidates for the role(s). Investors do not expect you to have a full management team when you are just starting your business.

Key Questions to Answer When Structuring Your Management Team

• Who are the key leaders?
• What experiences, skills, and educational backgrounds do you expect your key leaders to have?
• Do your key leaders have industry experience?
• What positions will they fill and what duties will they perform in those positions?
• What level of authority do the key leaders have and what are their responsibilities?
• What is the salary for the various management positions that will attract the ideal candidates?

Additional Tips for Writing the Management Structure Section

1. Avoid Adding ‘Ghost’ Names to Your Management Team

There is always that temptation to include a ‘ghost’ name to your management team to attract and influence investors to invest in your business. Although the presence of these celebrity management team members may attract the attention of investors, it can cause your business to lose any credibility if you get found out.

Seasoned investors will investigate further the members of your management team before committing fully to your business If they find out that the celebrity name used does not play any actual role in your business, they will not invest and may write you off as dishonest.

2. Focus on Credentials But Pay Extra Attention to the Roles

Investors want to know the experience that your key team members have to determine if they can successfully reach the company’s growth and financial goals.

While it is an excellent boost for your key management team to have the right credentials, you also want to pay extra attention to the roles they will play in your company.

Organizational Chart

Adding an organizational chart in this section of your business plan is not necessary, you can do it in your business plan’s appendix.

If you are exploring funding options, it is not uncommon to get asked for your organizational chart. The function of an organizational chart goes beyond raising money, you can also use it as a useful planning tool for your business.

An organizational chart can help you identify how best to structure your management team for maximum productivity and point you towards key roles you need to fill in the future.

You can use the organizational chart to show your company’s internal management structure such as the roles and responsibilities of your management team, and relationships that exist between them.

5. Describe Your Product and Service Offering

In your business plan, you have to describe what you sell or the service you plan to offer. It is the next step after defining your business and management structure. The products and services section is where you sell the benefits of your business.

Here you have to explain how your product or service will benefit your customers and describe your product lifecycle. It is also the section where you write down your plans for intellectual property like patent filings and copyrighting.

The research and development that you are undertaking for your product or service need to be explained in detail in this section. However, do not get too technical, sell the general idea and its benefits.

If you have any diagrams or intricate designs of your product or service, do not include them in the products and services section. Instead, leave them for the addendum page. Also, if you are leaving out diagrams or designs for the addendum, ensure you add this phrase “For more detail, visit the addendum Page #.”

Your product and service section in your business plan should include the following:

• A detailed explanation that clearly shows how your product or service works.
• The pricing model for your product or service.
• Your business’ sales and distribution strategy.
• The ideal customers that want your product or service.
• The benefits of your products and services.
• Reason(s) why your product or service is a better alternative to what your competitors are currently offering in the market.
• Plans for filling the orders you receive
• If you have current or pending patents, copyrights, and trademarks for your product or service, you can also discuss them in this section.

What to Focus On When Describing the Benefits, Lifecycle, and Production Process of Your Products or Services

In the products and services section, you have to distill the benefits, lifecycle, and production process of your products and services.

When describing the benefits of your products or services, here are some key factors to focus on.

• Unique features
• Translating the unique features into benefits
• The emotional, psychological, and practical payoffs to attract customers
• Intellectual property rights or any patents

When describing the product life cycle of your products or services, here are some key factors to focus on.

• Upsells, cross-sells, and down-sells
• Time between purchases
• Plans for research and development.

When describing the production process for your products or services, you need to think about the following:

• The creation of new or existing products and services.
• The sources for the raw materials or components you need for production.
• Assembling the products
• Maintaining quality control
• Supply-chain logistics (receiving the raw materials and delivering the finished products)
• The day-to-day management of the production processes, bookkeeping, and inventory.

Tips for Writing the Products or Services Section of Your Business Plan

1. Avoid Technical Descriptions and Industry Buzzwords

The products and services section of your business plan should clearly describe the products and services that your company provides. However, it is not a section to include technical jargons that anyone outside your industry will not understand.

A good practice is to remove highly detailed or technical descriptions in favor of simple terms. Industry buzzwords are not necessary, if there are simpler terms you can use, then use them. If you plan to use your business plan to source funds, making the product or service section so technical will do you no favors.

2. Describe How Your Products or Services Differ from Your Competitors

When potential investors look at your business plan, they want to know how the products and services you are offering differ from that of your competition. Differentiating your products or services from your competition in a way that makes your solution more attractive is critical.

If you are going the innovative path and there is no market currently for your product or service, you need to describe in this section why the market needs your product or service.

For example, overnight delivery was a niche business that only a few companies were participating in. Federal Express (FedEx) had to show in its business plan that there was a large opportunity for that service and they justified why the market needed that service.

3. Long or Short Products or Services Section

Should your products or services section be short? Does the long products or services section attract more investors?

There are no straightforward answers to these questions. Whether your products or services section should be long or relatively short depends on the nature of your business.

If your business is product-focused, then automatically you need to use more space to describe the details of your products. However, if the product your business sells is a commodity item that relies on competitive pricing or other pricing strategies, you do not have to use up so much space to provide significant details about the product.

Likewise, if you are selling a commodity that is available in numerous outlets, then you do not have to spend time on writing a long products or services section.

The key to the success of your business is most likely the effectiveness of your marketing strategies compared to your competitors. Use more space to address that section.

If you are creating a new product or service that the market does not know about, your products or services section can be lengthy. The reason why is because you need to explain everything about the product or service such as the nature of the product, its use case, and values.

A short products or services section for an innovative product or service will not give the readers enough information to properly evaluate your business.

4. Describe Your Relationships with Vendors or Suppliers

Your business will rely on vendors or suppliers to supply raw materials or the components needed to make your products. In your products and services section, describe your relationships with your vendors and suppliers fully.

Avoid the mistake of relying on only one supplier or vendor. If that supplier or vendor fails to supply or goes out of business, you can easily face supply problems and struggle to meet your demands. Plan to set up multiple vendor or supplier relationships for better business stability.

5. Your Primary Goal Is to Convince Your Readers

The primary goal of your business plan is to convince your readers that your business is viable and to create a guide for your business to follow. It applies to the products and services section.

When drafting this section, think like the reader. See your reader as someone who has no idea about your products and services. You are using the products and services section to provide the needed information to help your reader understand your products and services. As a result, you have to be clear and to the point.

While you want to educate your readers about your products or services, you also do not want to bore them with lots of technical details. Show your products and services and not your fancy choice of words.

Your products and services section should provide the answer to the “what” question for your business. You and your management team may run the business, but it is your products and services that are the lifeblood of the business.

Key Questions to Answer When Writing your Products and Services Section

Answering these questions can help you write your products and services section quickly and in a way that will appeal to your readers.

• Are your products existing on the market or are they still in the development stage?
• What is your timeline for adding new products and services to the market?
• What are the positives that make your products and services different from your competitors?
• Do your products and services have any competitive advantage that your competitors’ products and services do not currently have?
• Do your products or services have any competitive disadvantages that you need to overcome to compete with your competitors? If your answer is yes, state how you plan to overcome them,
• How much does it cost to produce your products or services? How much do you plan to sell it for?
• What is the price for your products and services compared to your competitors? Is pricing an issue?
• What are your operating costs and will it be low enough for you to compete with your competitors and still take home a reasonable profit margin?
• What is your plan for acquiring your products? Are you involved in the production of your products or services?
• Are you the manufacturer and produce all the components you need to create your products? Do you assemble your products by using components supplied by other manufacturers? Do you purchase your products directly from suppliers or wholesalers?
• Do you have a steady supply of products that you need to start your business? (If your business is yet to kick-off)
• How do you plan to distribute your products or services to the market?

You can also hint at the marketing or promotion plans you have for your products or services such as how you plan to build awareness or retain customers. The next section is where you can go fully into details about your business’s marketing and sales plan.

6. Show and Explain Your Marketing and Sales Plan

Providing great products and services is wonderful, but it means nothing if you do not have a marketing and sales plan to inform your customers about them. Your marketing and sales plan is critical to the success of your business.

The sales and marketing section is where you show and offer a detailed explanation of your marketing and sales plan and how you plan to execute it. It covers your pricing plan, proposed advertising and promotion activities, activities and partnerships you need to make your business a success, and the benefits of your products and services.

There are several ways you can approach your marketing and sales strategy. Ideally, your marketing and sales strategy has to fit the unique needs of your business.

In this section, you describe how the plans your business has for attracting and retaining customers, and the exact process for making a sale happen. It is essential to thoroughly describe your complete marketing and sales plans because you are still going to reference this section when you are making financial projections for your business.

Outline Your Business’ Unique Selling Proposition (USP)

The sales and marketing section is where you outline your business’s unique selling proposition (USP). When you are developing your unique selling proposition, think about the strongest reasons why people should buy from you over your competition. That reason(s) is most likely a good fit to serve as your unique selling proposition (USP).

Target Market and Target Audience

Plans on how to get your products or services to your target market and how to get your target audience to buy them go into this section. You also highlight the strengths of your business here, particularly what sets them apart from your competition.

Before you start writing your marketing and sales plan, you need to have properly defined your target audience and fleshed out your buyer persona. If you do not first understand the individual you are marketing to, your marketing and sales plan will lack any substance and easily fall.

Creating a Smart Marketing and Sales Plan

Marketing your products and services is an investment that requires you to spend money. Like any other investment, you have to generate a good return on investment (ROI) to justify using that marketing and sales plan. Good marketing and sales plans bring in high sales and profits to your company.

Avoid spending money on unproductive marketing channels. Do your research and find out the best marketing and sales plan that works best for your company.

Your marketing and sales plan can be broken into different parts: your positioning statement, pricing, promotion, packaging, advertising, public relations, content marketing, social media, and strategic alliances.

Your Positioning Statement

Your positioning statement is the first part of your marketing and sales plan. It refers to the way you present your company to your customers.

Are you the premium solution, the low-price solution, or are you the intermediary between the two extremes in the market? What do you offer that your competitors do not that can give you leverage in the market?

Before you start writing your positioning statement, you need to spend some time evaluating the current market conditions. Here are some questions that can help you to evaluate the market

• What are the unique features or benefits that you offer that your competitors lack?
• What are your customers’ primary needs and wants?
• Why should a customer choose you over your competition? How do you plan to differentiate yourself from the competition?
• How does your company’s solution compare with other solutions in the market?

After answering these questions, then you can start writing your positioning statement. Your positioning statement does not have to be in-depth or too long.

All you need to explain with your positioning statement are two focus areas. The first is the position of your company within the competitive landscape. The other focus area is the core value proposition that sets your company apart from other alternatives that your ideal customer might consider.

Here is a simple template you can use to develop a positioning statement.

For [description of target market] who [need of target market], [product or service] [how it meets the need]. Unlike [top competition], it [most essential distinguishing feature].

For example, let’s create the positioning statement for fictional accounting software and QuickBooks alternative , TBooks.

“For small business owners who need accounting services, TBooks is an accounting software that helps small businesses handle their small business bookkeeping basics quickly and easily. Unlike Wave, TBooks gives small businesses access to live sessions with top accountants.”

You can edit this positioning statement sample and fill it with your business details.

After writing your positioning statement, the next step is the pricing of your offerings. The overall positioning strategy you set in your positioning statement will often determine how you price your products or services.

Pricing is a powerful tool that sends a strong message to your customers. Failure to get your pricing strategy right can make or mar your business. If you are targeting a low-income audience, setting a premium price can result in low sales.

You can use pricing to communicate your positioning to your customers. For example, if you are offering a product at a premium price, you are sending a message to your customers that the product belongs to the premium category.

Basic Rules to Follow When Pricing Your Offering

Setting a price for your offering involves more than just putting a price tag on it. Deciding on the right pricing for your offering requires following some basic rules. They include covering your costs, primary and secondary profit center pricing, and matching the market rate.

• Covering Your Costs: The price you set for your products or service should be more than it costs you to produce and deliver them. Every business has the same goal, to make a profit. Depending on the strategy you want to use, there are exceptions to this rule. However, the vast majority of businesses follow this rule.
• Primary and Secondary Profit Center Pricing: When a company sets its price above the cost of production, it is making that product its primary profit center. A company can also decide not to make its initial price its primary profit center by selling below or at even with its production cost. It rather depends on the support product or even maintenance that is associated with the initial purchase to make its profit. The initial price thus became its secondary profit center.
• Matching the Market Rate: A good rule to follow when pricing your products or services is to match your pricing with consumer demand and expectations. If you price your products or services beyond the price your customer perceives as the ideal price range, you may end up with no customers. Pricing your products too low below what your customer perceives as the ideal price range may lead to them undervaluing your offering.

Pricing Strategy

Your pricing strategy influences the price of your offering. There are several pricing strategies available for you to choose from when examining the right pricing strategy for your business. They include cost-plus pricing, market-based pricing, value pricing, and more.

• Cost-plus Pricing: This strategy is one of the simplest and oldest pricing strategies. Here you consider the cost of producing a unit of your product and then add a profit to it to arrive at your market price. It is an effective pricing strategy for manufacturers because it helps them cover their initial costs. Another name for the cost-plus pricing strategy is the markup pricing strategy.
• Market-based Pricing: This pricing strategy analyses the market including competitors’ pricing and then sets a price based on what the market is expecting. With this pricing strategy, you can either set your price at the low-end or high-end of the market.
• Value Pricing: This pricing strategy involves setting a price based on the value you are providing to your customer. When adopting a value-based pricing strategy, you have to set a price that your customers are willing to pay. Service-based businesses such as small business insurance providers , luxury goods sellers, and the fashion industry use this pricing strategy.

After carefully sorting out your positioning statement and pricing, the next item to look at is your promotional strategy. Your promotional strategy explains how you plan on communicating with your customers and prospects.

As a business, you must measure all your costs, including the cost of your promotions. You also want to measure how much sales your promotions bring for your business to determine its usefulness. Promotional strategies or programs that do not lead to profit need to be removed.

There are different types of promotional strategies you can adopt for your business, they include advertising, public relations, and content marketing.

Advertising

Your business plan should include your advertising plan which can be found in the marketing and sales plan section. You need to include an overview of your advertising plans such as the areas you plan to spend money on to advertise your business and offers.

Ensure that you make it clear in this section if your business will be advertising online or using the more traditional offline media, or the combination of both online and offline media. You can also include the advertising medium you want to use to raise awareness about your business and offers.

Some common online advertising mediums you can use include social media ads, landing pages, sales pages, SEO, Pay-Per-Click, emails, Google Ads, and others. Some common traditional and offline advertising mediums include word of mouth, radios, direct mail, televisions, flyers, billboards, posters, and others.

A key component of your advertising strategy is how you plan to measure the effectiveness and success of your advertising campaign. There is no point in sticking with an advertising plan or medium that does not produce results for your business in the long run.

Public Relations

A great way to reach your customers is to get the media to cover your business or product. Publicity, especially good ones, should be a part of your marketing and sales plan. In this section, show your plans for getting prominent reviews of your product from reputable publications and sources.

Your business needs that exposure to grow. If public relations is a crucial part of your promotional strategy, provide details about your public relations plan here.

Content Marketing

Content marketing is a popular promotional strategy used by businesses to inform and attract their customers. It is about teaching and educating your prospects on various topics of interest in your niche, it does not just involve informing them about the benefits and features of the products and services you have,

Businesses publish content usually for free where they provide useful information, tips, and advice so that their target market can be made aware of the importance of their products and services. Content marketing strategies seek to nurture prospects into buyers over time by simply providing value.

Your company can create a blog where it will be publishing content for its target market. You will need to use the best website builder such as Wix and Squarespace and the best web hosting services such as Bluehost, Hostinger, and other Bluehost alternatives to create a functional blog or website.

If content marketing is a crucial part of your promotional strategy (as it should be), detail your plans under promotions.

Including high-quality images of the packaging of your product in your business plan is a lovely idea. You can add the images of the packaging of that product in the marketing and sales plan section. If you are not selling a product, then you do not need to include any worry about the physical packaging of your product.

When organizing the packaging section of your business plan, you can answer the following questions to make maximum use of this section.

• Is your choice of packaging consistent with your positioning strategy?
• What key value proposition does your packaging communicate? (It should reflect the key value proposition of your business)
• How does your packaging compare to that of your competitors?

Social Media

Your 21st-century business needs to have a good social media presence. Not having one is leaving out opportunities for growth and reaching out to your prospect.

You do not have to join the thousands of social media platforms out there. What you need to do is join the ones that your customers are active on and be active there.

Businesses use social media to provide information about their products such as promotions, discounts, the benefits of their products, and content on their blogs.

Social media is also a platform for engaging with your customers and getting feedback about your products or services. Make no mistake, more and more of your prospects are using social media channels to find more information about companies.

You need to consider the social media channels you want to prioritize your business (prioritize the ones your customers are active in) and your branding plans in this section.

Strategic Alliances

If your company plans to work closely with other companies as part of your sales and marketing plan, include it in this section. Prove details about those partnerships in your business plan if you have already established them.

Strategic alliances can be beneficial for all parties involved including your company. Working closely with another company in the form of a partnership can provide access to a different target market segment for your company.

The company you are partnering with may also gain access to your target market or simply offer a new product or service (that of your company) to its customers.

Mutually beneficial partnerships can cover the weaknesses of one company with the strength of another. You should consider strategic alliances with companies that sell complimentary products to yours. For example, if you provide printers, you can partner with a company that produces ink since the customers that buy printers from you will also need inks for printing.

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

Identify who your customers are, the market you want to target. Then determine the best ways to get your products or services to your potential customers.

2. Evaluate Your Competition

One of the goals of having a marketing plan is to distinguish yourself from your competition. You cannot stand out from them without first knowing them in and out.

You can know your competitors by gathering information about their products, pricing, service, and advertising campaigns.

These questions can help you know your competition.

• What makes your competition successful?
• What are their weaknesses?
• What are customers saying about your competition?

3. Consider Your Brand

Customers' perception of your brand has a strong impact on your sales. Your marketing and sales plan should seek to bolster the image of your brand. Before you start marketing your business, think about the message you want to pass across about your business and your products and services.

4. Focus on Benefits

The majority of your customers do not view your product in terms of features, what they want to know is the benefits and solutions your product offers. Think about the problems your product solves and the benefits it delivers, and use it to create the right sales and marketing message.

Your marketing plan should focus on what you want your customer to get instead of what you provide. Identify those benefits in your marketing and sales plan.

5. Focus on Differentiation

Your marketing and sales plan should look for a unique angle they can take that differentiates your business from the competition, even if the products offered are similar. Some good areas of differentiation you can use are your benefits, pricing, and features.

Key Questions to Answer When Writing Your Marketing and Sales Plan

• What is your company’s budget for sales and marketing campaigns?
• What key metrics will you use to determine if your marketing plans are successful?
• What are your alternatives if your initial marketing efforts do not succeed?
• Who are the sales representatives you need to promote your products or services?
• What are the marketing and sales channels you plan to use? How do you plan to get your products in front of your ideal customers?
• Where will you sell your products?

You may want to include samples of marketing materials you plan to use such as print ads, website descriptions, and social media ads. While it is not compulsory to include these samples, it can help you better communicate your marketing and sales plan and objectives.

The purpose of the marketing and sales section is to answer this question “How will you reach your customers?” If you cannot convincingly provide an answer to this question, you need to rework your marketing and sales section.

7. Clearly Show Your Funding Request

If you are writing your business plan to ask for funding from investors or financial institutions, the funding request section is where you will outline your funding requirements. The funding request section should answer the question ‘How much money will your business need in the near future (3 to 5 years)?’

A good funding request section will clearly outline and explain the amount of funding your business needs over the next five years. You need to know the amount of money your business needs to make an accurate funding request.

Also, when writing your funding request, provide details of how the funds will be used over the period. Specify if you want to use the funds to buy raw materials or machinery, pay salaries, pay for advertisements, and cover specific bills such as rent and electricity.

In addition to explaining what you want to use the funds requested for, you need to clearly state the projected return on investment (ROI) . Investors and creditors want to know if your business can generate profit for them if they put funds into it.

Ensure you do not inflate the figures and stay as realistic as possible. Investors and financial institutions you are seeking funds from will do their research before investing money in your business.

If you are not sure of an exact number to request from, you can use some range of numbers as rough estimates. Add a best-case scenario and a work-case scenario to your funding request. Also, include a description of your strategic future financial plans such as selling your business or paying off debts.

Funding Request: Debt or Equity?

When making your funding request, specify the type of funding you want. Do you want debt or equity? Draw out the terms that will be applicable for the funding, and the length of time the funding request will cover.

Case for Equity

If your new business has not yet started generating profits, you are most likely preparing to sell equity in your business to raise capital at the early stage. Equity here refers to ownership. In this case, you are selling a portion of your company to raise capital.

Although this method of raising capital for your business does not put your business in debt, keep in mind that an equity owner may expect to play a key role in company decisions even if he does not hold a major stake in the company.

Most equity sales for startups are usually private transactions . If you are making a funding request by offering equity in exchange for funding, let the investor know that they will be paid a dividend (a share of the company’s profit). Also, let the investor know the process for selling their equity in your business.

Case for Debt

You may decide not to offer equity in exchange for funds, instead, you make a funding request with the promise to pay back the money borrowed at the agreed time frame.

When making a funding request with an agreement to pay back, note that you will have to repay your creditors both the principal amount borrowed and the interest on it. Financial institutions offer this type of funding for businesses.

Large companies combine both equity and debt in their capital structure. When drafting your business plan, decide if you want to offer both or one over the other.

Before you sell equity in exchange for funding in your business, consider if you are willing to accept not being in total control of your business. Also, before you seek loans in your funding request section, ensure that the terms of repayment are favorable.

You should set a clear timeline in your funding request so that potential investors and creditors can know what you are expecting. Some investors and creditors may agree to your funding request and then delay payment for longer than 30 days, meanwhile, your business needs an immediate cash injection to operate efficiently.

Additional Tips for Writing the Funding Request Section of your Business Plan

The funding request section is not necessary for every business, it is only needed by businesses who plan to use their business plan to secure funding.

If you are adding the funding request section to your business plan, provide an itemized summary of how you plan to use the funds requested. Hiring a lawyer, accountant, or other professionals may be necessary for the proper development of this section.

You should also gather and use financial statements that add credibility and support to your funding requests. Ensure that the financial statements you use should include your projected financial data such as projected cash flows, forecast statements, and expenditure budgets.

If you are an existing business, include all historical financial statements such as cash flow statements, balance sheets and income statements .

Provide monthly and quarterly financial statements for a year. If your business has records that date back beyond the one-year mark, add the yearly statements of those years. These documents are for the appendix section of your business plan.

8. Detail Your Financial Plan, Metrics, and Projections

If you used the funding request section in your business plan, supplement it with a financial plan, metrics, and projections. This section paints a picture of the past performance of your business and then goes ahead to make an informed projection about its future.

The goal of this section is to convince readers that your business is going to be a financial success. It outlines your business plan to generate enough profit to repay the loan (with interest if applicable) and to generate a decent return on investment for investors.

If you have an existing business already in operation, use this section to demonstrate stability through finance. This section should include your cash flow statements, balance sheets, and income statements covering the last three to five years. If your business has some acceptable collateral that you can use to acquire loans, list it in the financial plan, metrics, and projection section.

Apart from current financial statements, this section should also contain a prospective financial outlook that spans the next five years. Include forecasted income statements, cash flow statements, balance sheets, and capital expenditure budget.

If your business is new and is not yet generating profit, use clear and realistic projections to show the potentials of your business.

When drafting this section, research industry norms and the performance of comparable businesses. Your financial projections should cover at least five years. State the logic behind your financial projections. Remember you can always make adjustments to this section as the variables change.

The financial plan, metrics, and projection section create a baseline which your business can either exceed or fail to reach. If your business fails to reach your projections in this section, you need to understand why it failed.

Investors and loan managers spend a lot of time going through the financial plan, metrics, and projection section compared to other parts of the business plan. Ensure you spend time creating credible financial analyses for your business in this section.

Many entrepreneurs find this section daunting to write. You do not need a business degree to create a solid financial forecast for your business. Business finances, especially for startups, are not as complicated as they seem. There are several online tools and templates that make writing this section so much easier.

Use Graphs and Charts

The financial plan, metrics, and projection section is a great place to use graphs and charts to tell the financial story of your business. Charts and images make it easier to communicate your finances.

Accuracy in this section is key, ensure you carefully analyze your past financial statements properly before making financial projects.

Address the Risk Factors and Show Realistic Financial Projections

Keep your financial plan, metrics, and projection realistic. It is okay to be optimistic in your financial projection, however, you have to justify it.

You should also address the various risk factors associated with your business in this section. Investors want to know the potential risks involved, show them. You should also show your plans for mitigating those risks.

What You Should In The Financial Plan, Metrics, and Projection Section of Your Business Plan

The financial plan, metrics, and projection section of your business plan should have monthly sales and revenue forecasts for the first year. It should also include annual projections that cover 3 to 5 years.

A three-year projection is a basic requirement to have in your business plan. However, some investors may request a five-year forecast.

Your business plan should include the following financial statements: sales forecast, personnel plan, income statement, income statement, cash flow statement, balance sheet, and an exit strategy.

1. Sales Forecast

Sales forecast refers to your projections about the number of sales your business is going to record over the next few years. It is typically broken into several rows, with each row assigned to a core product or service that your business is offering.

One common mistake people make in their business plan is to break down the sales forecast section into long details. A sales forecast should forecast the high-level details.

For example, if you are forecasting sales for a payroll software provider, you could break down your forecast into target market segments or subscription categories.

Your sales forecast section should also have a corresponding row for each sales row to cover the direct cost or Cost of Goods Sold (COGS). The objective of these rows is to show the expenses that your business incurs in making and delivering your product or service.

Note that your Cost of Goods Sold (COGS) should only cover those direct costs incurred when making your products. Other indirect expenses such as insurance, salaries, payroll tax, and rent should not be included.

For example, the Cost of Goods Sold (COGS) for a restaurant is the cost of ingredients while for a consulting company it will be the cost of paper and other presentation materials.

2. Personnel Plan

The personnel plan section is where you provide details about the payment plan for your employees. For a small business, you can easily list every position in your company and how much you plan to pay in the personnel plan.

However, for larger businesses, you have to break the personnel plan into functional groups such as sales and marketing.

The personnel plan will also include the cost of an employee beyond salary, commonly referred to as the employee burden. These costs include insurance, payroll taxes , and other essential costs incurred monthly as a result of having employees on your payroll.

3. Income Statement

The income statement section shows if your business is making a profit or taking a loss. Another name for the income statement is the profit and loss (P&L). It takes data from your sales forecast and personnel plan and adds other ongoing expenses you incur while running your business.

Every business plan should have an income statement. It subtracts your business expenses from its earnings to show if your business is generating profit or incurring losses.

The income statement has the following items: sales, Cost of Goods Sold (COGS), gross margin, operating expenses, total operating expenses, operating income , total expenses, and net profit.

• Sales refer to the revenue your business generates from selling its products or services. Other names for sales are income or revenue.
• Cost of Goods Sold (COGS) refers to the total cost of selling your products. Other names for COGS are direct costs or cost of sales. Manufacturing businesses use the Costs of Goods Manufactured (COGM) .
• Gross Margin is the figure you get when you subtract your COGS from your sales. In your income statement, you can express it as a percentage of total sales (Gross margin / Sales = Gross Margin Percent).
• Operating Expenses refer to all the expenses you incur from running your business. It exempts the COGS because it stands alone as a core part of your income statement. You also have to exclude taxes, depreciation, and amortization. Your operating expenses include salaries, marketing expenses, research and development (R&D) expenses, and other expenses.
• Total Operating Expenses refers to the sum of all your operating expenses including those exemptions named above under operating expenses.
• Operating Income refers to earnings before interest, taxes, depreciation, and amortization. It is simply known as the acronym EBITDA (earnings before interest, taxes, depreciation, and amortization). Calculating your operating income is simple, all you need to do is to subtract your COGS and total operating expenses from your sales.
• Total Expenses refer to the sum of your operating expenses and your business’ interest, taxes, depreciation, and amortization.
• Net profit shows whether your business has made a profit or taken a loss during a given timeframe.

4. Cash Flow Statement

The cash flow statement tracks the money you have in the bank at any given point. It is often confused with the income statement or the profit and loss statement. They are both different types of financial statements. The income statement calculates your profits and losses while the cash flow statement shows you how much you have in the bank.

5. Balance Sheet

The balance sheet is a financial statement that provides an overview of the financial health of your business. It contains information about the assets and liabilities of your company, and owner’s or shareholders’ equity.

You can get the net worth of your company by subtracting your company’s liabilities from its assets.

6. Exit Strategy

The exit strategy refers to a probable plan for selling your business either to the public in an IPO or to another company. It is the last thing you include in the financial plan, metrics, and projection section.

You can choose to omit the exit strategy from your business plan if you plan to maintain full ownership of your business and do not plan on seeking angel investment or virtual capitalist (VC) funding.

Investors may want to know what your exit plan is. They invest in your business to get a good return on investment.

Your exit strategy does not have to include long and boring details. Ensure you identify some interested parties who may be interested in buying the company if it becomes a success.

Key Questions to Answer with Your Financial Plan, Metrics, and Projection

Your financial plan, metrics, and projection section helps investors, creditors, or your internal managers to understand what your expenses are, the amount of cash you need, and what it takes to make your company profitable. It also shows what you will be doing with any funding.

You do not need to show actual financial data if you do not have one. Adding forecasts and projections to your financial statements is added proof that your strategy is feasible and shows investors you have planned properly.

Here are some key questions to answer to help you develop this section.

• What is your sales forecast for the next year?
• When will your company achieve a positive cash flow?
• What are the core expenses you need to operate?
• How much money do you need upfront to operate or grow your company?
• How will you use the loans or investments?

9. Add an Appendix to Your Business Plan

Adding an appendix to your business plan is optional. It is a useful place to put any charts, tables, legal notes, definitions, permits, résumés, and other critical information that do not fit into other sections of your business plan.

The appendix section is where you would want to include details of a patent or patent-pending if you have one. You can always add illustrations or images of your products here. It is the last section of your business plan.

When writing your business plan, there are details you cut short or remove to prevent the entire section from becoming too lengthy. There are also details you want to include in the business plan but are not a good fit for any of the previous sections. You can add that additional information to the appendix section.

Businesses also use the appendix section to include supporting documents or other materials specially requested by investors or lenders.

You can include just about any information that supports the assumptions and statements you made in the business plan under the appendix. It is the one place in the business plan where unrelated data and information can coexist amicably.

If your appendix section is lengthy, try organizing it by adding a table of contents at the beginning of the appendix section. It is also advisable to group similar information to make it easier for the reader to access them.

A well-organized appendix section makes it easier to share your information clearly and concisely. Add footnotes throughout the rest of the business plan or make references in the plan to the documents in the appendix.

The appendix section is usually only necessary if you are seeking funding from investors or lenders, or hoping to attract partners.

People reading business plans do not want to spend time going through a heap of backup information, numbers, and charts. Keep these documents or information in the Appendix section in case the reader wants to dig deeper.

Common Items to Include in the Appendix Section of Your Business Plan

The appendix section includes documents that supplement or support the information or claims given in other sections of the business plans. Common items you can include in the appendix section include:

• Additional data about the process of manufacturing or creation
• Additional description of products or services such as product schematics
• Additional financial documents or projections
• Articles of incorporation and status
• Backup for market research or competitive analysis
• Bank statements
• Business registries
• Client testimonials (if your business is already running)
• Copies of insurances
• Credit histories (personal or/and business)
• Deeds and permits
• Equipment leases
• Examples of marketing and advertising collateral
• Industry associations and memberships
• Images of product
• Intellectual property
• Key customer contracts
• Legal documents and other contracts
• Letters of reference
• Links to references
• Market research data
• Organizational charts
• Photographs of potential facilities
• Professional licenses pertaining to your legal structure or type of business
• Purchase orders
• Resumes of the founder(s) and key managers
• State and federal identification numbers or codes
• Trademarks or patents’ registrations

Avoid using the appendix section as a place to dump any document or information you feel like adding. Only add documents or information that you support or increase the credibility of your business plan.

Tips and Strategies for Writing a Convincing Business Plan

To achieve a perfect business plan, you need to consider some key tips and strategies. These tips will raise the efficiency of your business plan above average.

1. Know Your Audience

When writing a business plan, you need to know your audience . Business owners write business plans for different reasons. Your business plan has to be specific. For example, you can write business plans to potential investors, banks, and even fellow board members of the company.

The audience you are writing to determines the structure of the business plan. As a business owner, you have to know your audience. Not everyone will be your audience. Knowing your audience will help you to narrow the scope of your business plan.

Consider what your audience wants to see in your projects, the likely questions they might ask, and what interests them.

• A business plan used to address a company's board members will center on its employment schemes, internal affairs, projects, stakeholders, etc.
• A business plan for financial institutions will talk about the size of your market and the chances for you to pay back any loans you demand.
• A business plan for investors will show proof that you can return the investment capital within a specific time. In addition, it discusses your financial projections, tractions, and market size.

2. Get Inspiration from People

Writing a business plan from scratch as an entrepreneur can be daunting. That is why you need the right inspiration to push you to write one. You can gain inspiration from the successful business plans of other businesses. Look at their business plans, the style they use, the structure of the project, etc.

To make your business plan easier to create, search companies related to your business to get an exact copy of what you need to create an effective business plan. You can also make references while citing examples in your business plans.

When drafting your business plan, get as much help from others as you possibly can. By getting inspiration from people, you can create something better than what they have.

3. Avoid Being Over Optimistic

Many business owners make use of strong adjectives to qualify their content. One of the big mistakes entrepreneurs make when preparing a business plan is promising too much.

The use of superlatives and over-optimistic claims can prepare the audience for more than you can offer. In the end, you disappoint the confidence they have in you.

In most cases, the best option is to be realistic with your claims and statistics. Most of the investors can sense a bit of incompetency from the overuse of superlatives. As a new entrepreneur, do not be tempted to over-promise to get the interests of investors.

The concept of entrepreneurship centers on risks, nothing is certain when you make future analyses. What separates the best is the ability to do careful research and work towards achieving that, not promising more than you can achieve.

To make an excellent first impression as an entrepreneur, replace superlatives with compelling data-driven content. In this way, you are more specific than someone promising a huge ROI from an investment.

4. Keep it Simple and Short

When writing business plans, ensure you keep them simple throughout. Irrespective of the purpose of the business plan, your goal is to convince the audience.

One way to achieve this goal is to make them understand your proposal. Therefore, it would be best if you avoid the use of complex grammar to express yourself. It would be a huge turn-off if the people you want to convince are not familiar with your use of words.

Another thing to note is the length of your business plan. It would be best if you made it as brief as possible.

You hardly see investors or agencies that read through an extremely long document. In that case, if your first few pages can’t convince them, then you have lost it. The more pages you write, the higher the chances of you derailing from the essential contents.

To ensure your business plan has a high conversion rate, you need to dispose of every unnecessary information. For example, if you have a strategy that you are not sure of, it would be best to leave it out of the plan.

5. Make an Outline and Follow Through

A perfect business plan must have touched every part needed to convince the audience. Business owners get easily tempted to concentrate more on their products than on other sections. Doing this can be detrimental to the efficiency of the business plan.

For example, imagine you talking about a product but omitting or providing very little information about the target audience. You will leave your clients confused.

To ensure that your business plan communicates your full business model to readers, you have to input all the necessary information in it. One of the best ways to achieve this is to design a structure and stick to it.

This structure is what guides you throughout the writing. To make your work easier, you can assign an estimated word count or page limit to every section to avoid making it too bulky for easy reading. As a guide, the necessary things your business plan must contain are:

• Table of contents
• Introduction
• Product or service description
• Target audience
• Market size
• Competition analysis
• Financial projections

Some specific businesses can include some other essential sections, but these are the key sections that must be in every business plan.

6. Ask a Professional to Proofread

When writing a business plan, you must tie all loose ends to get a perfect result. When you are done with writing, call a professional to go through the document for you. You are bound to make mistakes, and the way to correct them is to get external help.

You should get a professional in your field who can relate to every section of your business plan. It would be easier for the professional to notice the inner flaws in the document than an editor with no knowledge of your business.

In addition to getting a professional to proofread, get an editor to proofread and edit your document. The editor will help you identify grammatical errors, spelling mistakes, and inappropriate writing styles.

Writing a business plan can be daunting, but you can surmount that obstacle and get the best out of it with these tips.

Business Plan Examples and Templates That’ll Save You Tons of Time

1. hubspot's one-page business plan.

The one-page business plan template by HubSpot is the perfect guide for businesses of any size, irrespective of their business strategy. Although the template is condensed into a page, your final business plan should not be a page long! The template is designed to ask helpful questions that can help you develop your business plan.

Hubspot’s one-page business plan template is divided into nine fields:

• Business opportunity
• Company description
• Industry analysis
• Target market
• Implementation timeline
• Marketing plan
• Financial summary
• Funding required

2. Bplan’s Free Business Plan Template

Bplans' free business plan template is investor-approved. It is a rich template used by prestigious educational institutions such as Babson College and Princeton University to teach entrepreneurs how to create a business plan.

The template has six sections: the executive summary, opportunity, execution, company, financial plan, and appendix. There is a step-by-step guide for writing every little detail in the business plan. Follow the instructions each step of the way and you will create a business plan that impresses investors or lenders easily.

3. HubSpot's Downloadable Business Plan Template

HubSpot’s downloadable business plan template is a more comprehensive option compared to the one-page business template by HubSpot. This free and downloadable business plan template is designed for entrepreneurs.

The template is a comprehensive guide and checklist for business owners just starting their businesses. It tells you everything you need to fill in each section of the business plan and how to do it.

There are nine sections in this business plan template: an executive summary, company and business description, product and services line, market analysis, marketing plan, sales plan, legal notes, financial considerations, and appendix.

4. Business Plan by My Own Business Institute

My Own Business Institute (MOBI) which is a part of Santa Clara University's Center for Innovation and Entrepreneurship offers a free business plan template. You can either copy the free business template from the link provided above or download it as a Word document.

The comprehensive template consists of a whopping 15 sections.

• The Business Profile
• The Vision and the People
• Home-Based Business and Freelance Business Opportunities
• Organization
• Licenses and Permits
• Business Insurance
• Communication Tools
• Acquisitions
• Location and Leasing
• Accounting and Cash Flow
• Opening and Marketing
• Managing Employees
• Expanding and Handling Problems

There are lots of helpful tips on how to fill each section in the free business plan template by MOBI.

5. Score's Business Plan Template for Startups

Score is an American nonprofit organization that helps entrepreneurs build successful companies. This business plan template for startups by Score is available for free download. The business plan template asks a whooping 150 generic questions that help entrepreneurs from different fields to set up the perfect business plan.

The business plan template for startups contains clear instructions and worksheets, all you have to do is answer the questions and fill the worksheets.

There are nine sections in the business plan template: executive summary, company description, products and services, marketing plan, operational plan, management and organization, startup expenses and capitalization, financial plan, and appendices.

The ‘refining the plan’ resource contains instructions that help you modify your business plan to suit your specific needs, industry, and target audience. After you have completed Score’s business plan template, you can work with a SCORE mentor for expert advice in business planning.

6. Minimalist Architecture Business Plan Template by Venngage

The minimalist architecture business plan template is a simple template by Venngage that you can customize to suit your business needs .

There are five sections in the template: an executive summary, statement of problem, approach and methodology, qualifications, and schedule and benchmark. The business plan template has instructions that guide users on what to fill in each section.

7. Small Business Administration Free Business Plan Template

The Small Business Administration (SBA) offers two free business plan templates, filled with practical real-life examples that you can model to create your business plan. Both free business plan templates are written by fictional business owners: Rebecca who owns a consulting firm, and Andrew who owns a toy company.

There are five sections in the two SBA’s free business plan templates.

• Executive Summary
• Company Description
• Service Line
• Marketing and Sales

8. The $100 Startup's One-Page Business Plan

The one-page business plan by the $100 startup is a simple business plan template for entrepreneurs who do not want to create a long and complicated plan . You can include more details in the appendices for funders who want more information beyond what you can put in the one-page business plan.

There are five sections in the one-page business plan such as overview, ka-ching, hustling, success, and obstacles or challenges or open questions. You can answer all the questions using one or two sentences.

9. PandaDoc’s Free Business Plan Template

The free business plan template by PandaDoc is a comprehensive 15-page document that describes the information you should include in every section.

There are 11 sections in PandaDoc’s free business plan template.

• Executive summary
• Business description
• Products and services
• Operations plan
• Management organization
• Financial plan
• Conclusion / Call to action
• Confidentiality statement

You have to sign up for its 14-day free trial to access the template. You will find different business plan templates on PandaDoc once you sign up (including templates for general businesses and specific businesses such as bakeries, startups, restaurants, salons, hotels, and coffee shops)

PandaDoc allows you to customize its business plan templates to fit the needs of your business. After editing the template, you can send it to interested parties and track opens and views through PandaDoc.

10. Invoiceberry Templates for Word, Open Office, Excel, or PPT

InvoiceBerry is a U.K based online invoicing and tracking platform that offers free business plan templates in .docx, .odt, .xlsx, and .pptx formats for freelancers and small businesses.

Before you can download the free business plan template, it will ask you to give it your email address. After you complete the little task, it will send the download link to your inbox for you to download. It also provides a business plan checklist in .xlsx file format that ensures you add the right information to the business plan.

Alternatives to the Traditional Business Plan

A business plan is very important in mapping out how one expects their business to grow over a set number of years, particularly when they need external investment in their business. However, many investors do not have the time to watch you present your business plan. It is a long and boring read.

Luckily, there are three alternatives to the traditional business plan (the Business Model Canvas, Lean Canvas, and Startup Pitch Deck). These alternatives are less laborious and easier and quicker to present to investors.

Business Model Canvas (BMC)

The business model canvas is a business tool used to present all the important components of setting up a business, such as customers, route to market, value proposition, and finance in a single sheet. It provides a very focused blueprint that defines your business initially which you can later expand on if needed.

The sheet is divided mainly into company, industry, and consumer models that are interconnected in how they find problems and proffer solutions.

Segments of the Business Model Canvas

The business model canvas was developed by founder Alexander Osterwalder to answer important business questions. It contains nine segments.

• Key Partners: Who will be occupying important executive positions in your business? What do they bring to the table? Will there be a third party involved with the company?
• Key Activities: What important activities will production entail? What activities will be carried out to ensure the smooth running of the company?
• The Product’s Value Propositions: What does your product do? How will it be different from other products?
• Customer Segments: What demography of consumers are you targeting? What are the habits of these consumers? Who are the MVPs of your target consumers?
• Customer Relationships: How will the team support and work with its customer base? How do you intend to build and maintain trust with the customer?
• Key Resources: What type of personnel and tools will be needed? What size of the budget will they need access to?
• Channels: How do you plan to create awareness of your products? How do you intend to transport your product to the customer?
• Cost Structure: What is the estimated cost of production? How much will distribution cost?
• Revenue Streams: For what value are customers willing to pay? How do they prefer to pay for the product? Are there any external revenues attached apart from the main source? How do the revenue streams contribute to the overall revenue?

Lean Canvas

The lean canvas is a problem-oriented alternative to the standard business model canvas. It was proposed by Ash Maurya, creator of Lean Stack as a development of the business model generation. It uses a more problem-focused approach and it majorly targets entrepreneurs and startup businesses.

Lean Canvas uses the same 9 blocks concept as the business model canvas, however, they have been modified slightly to suit the needs and purpose of a small startup. The key partners, key activities, customer relationships, and key resources are replaced by new segments which are:

• Problem: Simple and straightforward number of problems you have identified, ideally three.
• Solution: The solutions to each problem.
• Unfair Advantage: Something you possess that can't be easily bought or replicated.
• Key Metrics: Important numbers that will tell how your business is doing.

Startup Pitch Deck

While the business model canvas compresses into a factual sheet, startup pitch decks expand flamboyantly.

Pitch decks, through slides, convey your business plan, often through graphs and images used to emphasize estimations and observations in your presentation. Entrepreneurs often use pitch decks to fully convince their target audience of their plans before discussing funding arrangements.

Considering the likelihood of it being used in a small time frame, a good startup pitch deck should ideally contain 20 slides or less to have enough time to answer questions from the audience.

Unlike the standard and lean business model canvases, a pitch deck doesn't have a set template on how to present your business plan but there are still important components to it. These components often mirror those of the business model canvas except that they are in slide form and contain more details.

Using Airbnb (one of the most successful start-ups in recent history) for reference, the important components of a good slide are listed below.

• Cover/Introduction Slide: Here, you should include your company's name and mission statement. Your mission statement should be a very catchy tagline. Also, include personal information and contact details to provide an easy link for potential investors.
• Problem Slide: This slide requires you to create a connection with the audience or the investor that you are pitching. For example in their pitch, Airbnb summarized the most important problems it would solve in three brief points – pricing of hotels, disconnection from city culture, and connection problems for local bookings.
• Solution Slide: This slide includes your core value proposition. List simple and direct solutions to the problems you have mentioned
• Customer Analysis: Here you will provide information on the customers you will be offering your service to. The identity of your customers plays an important part in fundraising as well as the long-run viability of the business.
• Market Validation: Use competitive analysis to show numbers that prove the presence of a market for your product, industry behavior in the present and the long run, as well as the percentage of the market you aim to attract. It shows that you understand your competitors and customers and convinces investors of the opportunities presented in the market.
• Business Model: Your business model is the hook of your presentation. It may vary in complexity but it should generally include a pricing system informed by your market analysis. The goal of the slide is to confirm your business model is easy to implement.
• Marketing Strategy: This slide should summarize a few customer acquisition methods that you plan to use to grow the business.
• Competitive Advantage: What this slide will do is provide information on what will set you apart and make you a more attractive option to customers. It could be the possession of technology that is not widely known in the market.
• Team Slide: Here you will give a brief description of your team. Include your key management personnel here and their specific roles in the company. Include their educational background, job history, and skillsets. Also, talk about their accomplishments in their careers so far to build investors' confidence in members of your team.
• Traction Slide: This validates the company’s business model by showing growth through early sales and support. The slide aims to reduce any lingering fears in potential investors by showing realistic periodic milestones and profit margins. It can include current sales, growth, valuable customers, pre-orders, or data from surveys outlining current consumer interest.
• Funding Slide: This slide is popularly referred to as ‘the ask'. Here you will include important details like how much is needed to get your business off the ground and how the funding will be spent to help the company reach its goals.
• Appendix Slides: Your pitch deck appendix should always be included alongside a standard pitch presentation. It consists of additional slides you could not show in the pitch deck but you need to complement your presentation.

It is important to support your calculations with pictorial renditions. Infographics, such as pie charts or bar graphs, will be more effective in presenting the information than just listing numbers. For example, a six-month graph that shows rising profit margins will easily look more impressive than merely writing it.

Lastly, since a pitch deck is primarily used to secure meetings and you may be sharing your pitch with several investors, it is advisable to keep a separate public version that doesn't include financials. Only disclose the one with projections once you have secured a link with an investor.

Advantages of the Business Model Canvas, Lean Canvas, and Startup Pitch Deck over the Traditional Business Plan

• Time-Saving: Writing a detailed traditional business plan could take weeks or months. On the other hand, all three alternatives can be done in a few days or even one night of brainstorming if you have a comprehensive understanding of your business.
• Easier to Understand: Since the information presented is almost entirely factual, it puts focus on what is most important in running the business. They cut away the excess pages of fillers in a traditional business plan and allow investors to see what is driving the business and what is getting in the way.
• Easy to Update: Businesses typically present their business plans to many potential investors before they secure funding. What this means is that you may regularly have to amend your presentation to update statistics or adjust to audience-specific needs. For a traditional business plan, this could mean rewriting a whole section of your plan. For the three alternatives, updating is much easier because they are not voluminous.
• Guide for a More In-depth Business Plan: All three alternatives have the added benefit of being able to double as a sketch of your business plan if the need to create one arises in the future.

Business Plan FAQ

Business plans are important for any entrepreneur who is looking for a framework to run their company over some time or seeking external support. Although they are essential for new businesses, every company should ideally have a business plan to track their growth from time to time.  They can be used by startups seeking investments or loans to convey their business ideas or an employee to convince his boss of the feasibility of starting a new project. They can also be used by companies seeking to recruit high-profile employee targets into key positions or trying to secure partnerships with other firms.

Business plans often vary depending on your target audience, the scope, and the goals for the plan. Startup plans are the most common among the different types of business plans.  A start-up plan is used by a new business to present all the necessary information to help get the business up and running. They are usually used by entrepreneurs who are seeking funding from investors or bank loans. The established company alternative to a start-up plan is a feasibility plan. A feasibility plan is often used by an established company looking for new business opportunities. They are used to show the upsides of creating a new product for a consumer base. Because the audience is usually company people, it requires less company analysis. The third type of business plan is the lean business plan. A lean business plan is a brief, straight-to-the-point breakdown of your ideas and analysis for your business. It does not contain details of your proposal and can be written on one page. Finally, you have the what-if plan. As it implies, a what-if plan is a preparation for the worst-case scenario. You must always be prepared for the possibility of your original plan being rejected. A good what-if plan will serve as a good plan B to the original.

A good business plan has 10 key components. They include an executive plan, product analysis, desired customer base, company analysis, industry analysis, marketing strategy, sales strategy, financial projection, funding, and appendix. Executive Plan Your business should begin with your executive plan. An executive plan will provide early insight into what you are planning to achieve with your business. It should include your mission statement and highlight some of the important points which you will explain later. Product Analysis The next component of your business plan is your product analysis. A key part of this section is explaining the type of item or service you are going to offer as well as the market problems your product will solve. Desired Consumer Base Your product analysis should be supplemented with a detailed breakdown of your desired consumer base. Investors are always interested in knowing the economic power of your market as well as potential MVP customers. Company Analysis The next component of your business plan is your company analysis. Here, you explain how you want to run your business. It will include your operational strategy, an insight into the workforce needed to keep the company running, and important executive positions. It will also provide a calculation of expected operational costs.  Industry Analysis A good business plan should also contain well laid out industry analysis. It is important to convince potential investors you know the companies you will be competing with, as well as your plans to gain an edge on the competition. Marketing Strategy Your business plan should also include your marketing strategy. This is how you intend to spread awareness of your product. It should include a detailed explanation of the company brand as well as your advertising methods. Sales Strategy Your sales strategy comes after the market strategy. Here you give an overview of your company's pricing strategy and how you aim to maximize profits. You can also explain how your prices will adapt to market behaviors. Financial Projection The financial projection is the next component of your business plan. It explains your company's expected running cost and revenue earned during the tenure of the business plan. Financial projection gives a clear idea of how your company will develop in the future. Funding The next component of your business plan is funding. You have to detail how much external investment you need to get your business idea off the ground here. Appendix The last component of your plan is the appendix. This is where you put licenses, graphs, or key information that does not fit in any of the other components.

The business model canvas is a business management tool used to quickly define your business idea and model. It is often used when investors need you to pitch your business idea during a brief window.

A pitch deck is similar to a business model canvas except that it makes use of slides in its presentation. A pitch is not primarily used to secure funding, rather its main purpose is to entice potential investors by selling a very optimistic outlook on the business.

Business plan competitions help you evaluate the strength of your business plan. By participating in business plan competitions, you are improving your experience. The experience provides you with a degree of validation while practicing important skills. The main motivation for entering into the competitions is often to secure funding by finishing in podium positions. There is also the chance that you may catch the eye of a casual observer outside of the competition. These competitions also provide good networking opportunities. You could meet mentors who will take a keen interest in guiding you in your business journey. You also have the opportunity to meet other entrepreneurs whose ideas can complement yours.

Exlore Further

• 12 Key Elements of a Business Plan (Top Components Explained)
• 13 Sources of Business Finance For Companies & Sole Traders
• 5 Common Types of Business Structures (+ Pros & Cons)
• How to Buy a Business in 8 Steps (+ Due Diligence Checklist)

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Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.

Business Model of FMCG Companies

Pratyusha Srivastava

The Fast-moving-consumer-goods (FMCG) is quite an established market. These industries have always proven themselves worthy of the consumers' purchasing and reliable choice. When looking a little back in time, FMCG was considered wrong for entering the business industries. However, with time, many young businessmen or entrepreneurs put their foot in the direct interaction with consumers regarding the product, and shockingly, it received great acknowledgments and achievements. This came out to be the FMCG business model.

This kind of business model interacts directly with the consumers by cutting out the retail and charging at wholesale rates. This also supports and helps the FMCG players with the opportunity to establish their position in the market. With the FMCG business model, different categories are discovered and some great innovative types of business models. FMCG industries work mainly on the e-commerce platform .

Looking at these facts, it's likely to say that the FMCG industries possess great kinds of business models and promote innovative contemplation. Through this article, we would explain to you how FMCG industries make money along with some distinct business models.

What is FMCG? FMCG Market Size FMCG Business Model FMCG Marketing Strategies Conclusion FAQ

What is FMCG?

FMCG means Fast-Moving consumer goods. The direct-to-consumer business encompasses highly demanding products, sells rapidly, and comes at a very reasonable price. These are also known as Consumer packaged goods (CPG). The products in these industries are very fast-moving as they are convenient to deliver and sell very quickly from the stores and supermarkets because of the daily usage in our life.

The FMCG industry includes some of the biggest brands worldwide. Such as Nestlé , PepsiCo , JBS, Procter & Gamble, Coca-Cola, Unilever, and many more. It's always advantageous to work in this industry as it brings out great career opportunities.

FMCG Market Size

FMCG industries reached up to US$ 52.75 billion in FY18 and by the time of 2020, it rose to US$ 103.7 billion. With the sector of food items, hygiene, rural areas and health; the FMCG industries have grown with a 7.1% increase in the last 2 months of 2020.

When the product demands increase in the rural sector, it brings out a great revenue rate for the FMCG industry. The rural area contributes around 36% pg total FMCG industry spendings. As the government also put huge effort into the hygiene and health of the rural regions, the FMCG industry gained up to 10.6% of growth recovery.

The government initiatives for the low unemployment rate, high agricultural produce, and reverse migration for the advancement of the rural areas. When such initiatives are taken, the FMCG industry gains a great amount of profit in hand.

FMCG Business Model

Let's take a brief look at some of the data-driven business models of FMCG Industries.

Premium Service Model

Premium Service Model offers great consumer services . It provides a premium fee that is linked for the customers to sign up. It possesses substantial benefits and encourages the customers to sign up .

Through the increase in business insights, the retailers gain the incremental revenue that targets the customers more consistently and brings functioning modifications to them. Premium Service Model promotes customers loyalty, enhances sales, and has the average basket size.

Differentiator Service Model

Differentiator Service Model offers some very heightened benefits to the customers and also offers the chance to purchase the same times again. Moreover, it gives rewards that boost up the purchasing tendency.  

Differentiator Service Model guarantees good customer loyalty and increases the basket size by purchasing the same items again and again. The retailer, however, gets access to the minute customer's data such as the email, contact details, history, and many others.

Return on Advantage Model

Return on Advantage Model also referred to as the Competitive Advantage Model focuses on driving the business insights for the growth of new products by combining the internal transactional data with the third party data. This also targets the experiences between the online and offline platforms and for better customer segmentation.

This business model targets customer segmentation to enhance its capabilities. Through this, the purchasing patterns are identified and assembled to gain a better possibility of targeting the customers .

FMCG Marketing Strategies

FMCG Industries has built a significant position in the market with its advanced product awareness strategies and customer loyalty . Here are some of the marketing strategies of the FMCG Industry.

Multiple Branding

In FMCG marketing , Multiple Branding is one of the most fascinating techniques to hold up the potential customers and strong market position. In this technique, the company creates fair competition among the same brand product categories.

Product line Building

Product line Building offers a wide range of variety to the customers based on their choices by altering the names. A company manufactures the same product with different needs of customers and sells them accordingly. However, there isn't any specific competition between such products as the target audience for each is distinct.

Huge Distribution Network

A huge Distribution Network is one of the very essential marketing strategies based on significant locations. This helps the product to reach every corner to gather its potential customers .

New Products Development

The company often modifies its products and then removes the old inconsistent ones. This helps them to maintain the competition and standards in the market. In this strategy, the company kept on researching and developing new features in their existing products. After modifying the product according to the consumer's needs, they replace the older ones with these.

Flanking is one of the very interesting FMCG marketing strategies. It sells the same product in different volumes and packaging . This helps the consumer to stick by the brand and purchase the product according to their favorable need. This brings a good option and probability for consumers to purchase the product.

Brand Extension

Normally when a company has made its strong position in marketing , to keep it consistent the company manufactures more products with the same name but different features, to gain massive sales. Brand Extension strategy is very essential as it brings more value to the brand and reaches the target audience quickly.

The Fast-moving consumer goods (FMCG) industry possesses some very strong brand holding in the market. With its incredible strategies and plans, it brings out great reliable growth development. FMCG industries are one of the most advanced and popular industries. It calls out a different business model to gain the required upholding with its consumers. FMCG industries include some of the very prominent brands worldwide that prove their success in the marketing field.

What is the biggest FMCG company?

Switzerland's Nestlé is the world's largest fast-moving consumer goods company, followed by two US giants: Procter & Gamble and PepsiCo.

Which FMCG is the best?

Some of the top FMCG companies are Hindustan Unilever Limited (HUL), Colgate-Palmolive, ITC Limited, Nestlé, Parle Agro, Britannia Industries Limited, Marico Limited and Procter and Gamble.

How do FMCG companies work?

In the FMCG industry, manufacturers often sell the goods to wholesalers, who sell them to the retailers, who in turn sell them to the consumers. This is a two-level channel.

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A consumer product business plan should have a concise and impactful company overview that lists the: value propositions of the product; all distributors, packagers, manufacturers; and existing or prospective customers. The product section should thoroughly describe each product in the product line, as well as any prospective future products. The market section should include national or global data on the specific product category, a thorough B2B target market analysis, target consumer profile, and relevant demographic information. If the company will perform its own manufacturing, a manufacturing plan is necessary. The financial plan should include a revenue model that is organized according to the various products or product categories that will be sold and have detailed cost of goods sold, marketing, and G&A expense assumptions and projections. A consumer product business plan is typically approximately 25 to 35 pages in length and typically range from $2250 to $4500 to develop a full business plan. RESEARCH REPORT Reinventing the consumer goods value chain It’s time to move from thinking functionally to developing end-to-end mega processes. 5-MINUTE READ May 30, 2024 Consumer goods companies face extreme change. We expect to see companies reinvent the entire value chain within the next five years. Successful reinvention—enabled by generative AI—marries tech and new ways of working to reimagine siloes as outcome-based, end-to-end value streams. There are five imperatives for value chain reinvention, which companies should embrace to outperform the competition in a rapidly developing landscape. Change is coming The consumer goods industry is on the brink of profound change. We expect to see companies reinvent every part of the value chain within the next five years. Consumer goods companies are facing cost pressures and high inflation. Enabled by generative AI, reinvention offers the ability to deliver 3-5% improvements in operating margin over the next three to five years, while also driving growth and disruptive innovation. Reinventors expect to outperform the rest with boundaryless ways of working that reframe the enterprise around end-to-end mega processes. A tech development like no other The scale of generative AI’s impact is more profound than any other technology we’ve seen. Reinventing with generative AI affects every part of the company and every person in the organization. Those who seek to reinvent with generative AI expect the benefits from revenue and innovation growth to exceed those of cost savings. From client experiences, we’re seeing increase in consumer conversion rise in customer net promoter score rise in employee satisfaction What are mega processes? Reinventors radically redesign processes with the possibilities of emerging technology and new ways of working, and reimagine siloed functions as outcome-based, end-to-end value streams—in other words, mega processes.  We’ve defined four mega processes. Every consumer goods company should have a clear articulation of its purpose, which is managed through the first mega process, insight to plan. Ideate to scale realizes that purpose through the invention of products and services. Consumer and customer experiences are brought to life through engage to advocate, creating a promise that is fulfilled through plan to deliver. All this is enabled by a company’s people, technology and operations. Four mega processes Insight to plan Strategic planning can no longer be an annual activity. As the world continues changing, resilience and agility requires dynamic and continuous decision-making and resource allocation to translate strategy into action—changing as the market changes. Ideate to scale Consumers are looking for solutions—not just incremental improvements. AI and generative AI are making innovation cycles adaptive, generating insights that evolve as quickly as people do and helping innovators invent radical new offerings. Engage to advocate The combination of new technologies and ways of working will realize a long-promised dream: genuine relevance. Digital assistants will get ever closer to human-like performance, providing guidance that gets more relevant through interactions. Plan to deliver Consumer goods supply chains could soon be able to respond to market signals in real time, such that they can evaluate scenarios across functions and make decisions that ensure value and drive growth. Five imperatives for end-to-end value chain reinvention By and large, consumer goods companies believe in the opportunity generative AI represents but are increasingly frustrated with isolated experiments and siloed use cases. Instead, executives want to know how to reinvent, and are seeking to understand the pragmatic journey to realize holistic value. Five imperatives for successful reinvention Lead with value. For most, implementing wholesale reinvention all at once is not viable. The key is to focus on the greatest areas of value. For many consumer goods companies, this includes consumer and customer engagement, and the ability to fulfill this promise. Reinvent talent and ways of working Leaders must set and guide a vision for reinventing work , reshaping the workforce and preparing workers for a generative AI world. Companies must prioritize upskilling and developing their talent to empower influential employees in various functions. Close the gap on responsible AI Leaders must commit to maintaining high standards of trust, transparency and sustainability in every AI-driven initiative. Responsible AI ensures that technology aligns with human values and protects people from negative impacts. Understand and develop an AI-enabled, secure digital core To get best value from generative AI, leaders must ensure that data and technology foundations are predicated on business value creation. For many, this includes understanding how to support new technologies with the right data in the right ways. Drive continuous reinvention Change is constant, so reinvention never ends. Leaders must make the ability to change a core part of the organizational DNA. To support end-to-end process development, companies should appoint leaders with the influence to drive ongoing reinvention. Reinventors embrace the boundaryless enterprise Organizations that continue to be dominated by a “four walls” mentality that resists both internal and external collaboration will increasingly lose out to those that embrace more agile ways of working. Boundaryless enterprises outperform the rest. You need to embrace this shift—now. Related insights The empowered consumer Total Enterprise Reinvention in Consumer Goods Oliver Wright Senior Managing Director – Consumer Goods & Services, Global Lead Karen Fang Grant Managing Director – Industry Networks & Programs, Global Research Lead Amar Subramanian Managing Director – Consumer Goods & Services, Data & AI, Global Lead Nevine El-Warraky Senior Managing Director – Industry & Customer Growth Strategy, Global Lead Kaus Rajnish Managing Director – Accenture Strategy, Consumer Goods & Services Adheer Bahulkar Managing Director – Consumer Goods & Services, Supply Chain & Operations, Global Lead Solving your most complex planning challenges Explore Industry Research What do Gartner, Forrester, and IDC have in common? They all named Anaplan a planning leader.   Your success is the heart of our success Hear from our customers at Anaplan Connect 2024 Join us for a day of connected inspiration from your industry-leading peers who have found the answer in agile, connected enterprise planning.​ Transform how you see, plan and lead your business Get started today. Explore on-demand demos to discover how our modeling and planning capabilities are designed to meet the specific and unique needs of your business. Transform how you see, plan, and lead your business We’d love to find out how we can help you Events, training, and content for your planning journey Visit our blog and newsroom Your hub for Anaplan updates, insights, perspectives, and innovations. Powerful partnerships to drive your digital transformation and deliver game-changing strategies.  Solutions for your business, your industry, from the world’s leading alliances. Access the groundbreaking Anaplan Enterprise Decision Excellence Report™ 2024 Unlock decision excellence Fuel success. Unleash the power of connected planning. Consumer demand is dynamic. sense and respond with better decisions, faster., in the fast-changing cpg industry, consumer insights and agility are key. understand changing consumer tastes and preferences to drive product innovation. infuse dynamic forecasting and visibility into your supply chain, and trade spend efficiency. empowering data-driven and shared decisions from production to purchase with real-time insight into consumer, market trends and marketing programs - ensures profitable growth through actionable response, providing a competitive edge., connected data-driven decisions. In consumer goods, every decision counts. Connected business planning harnesses the power of data, allowing companies to collaborate to make informed, precise decisions. 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Learn from inspiring customer stories on how CPG leaders plan with Anaplan On plans with anaplan, “the biggest benefit for us is the integration of different planning modules and activities in the company. that brings a lot of efficiency.”. Chief Operating Officer On The Duckhorn Portfolio plans with Anaplan “by leveraging anaplan, we’re able to get one source of truth and we can collaborate in real time and make meaningful decisions about our business.”. Director of Business Planning and Analytics The Duckhorn Portfolio AB InBev plans with Anaplan “we not only have a financial plan with a number, but we know which actions we need to take to make sure that plan, and that number, actually materialize.”. Global VP, Finance Planning and Analysis, AB InBev Godiva accelerates decision-making Reduction in time (300+ less hours annually) spent each month on S&OP reporting Read the customer story Lodge realizes 100% ROI in one year New approach to inventory, production, and demand planning leads to reduced cost and greater efficiency Coca-Cola bottlers collaborating for revenue growth management Solving a multidimensional planning puzzle across 67 distinct entities Connect your business for better, faster decision-making Unify your strategic, financial and operational planning  Learn more > Align your revenue strategy with sales and marketing execution Maximize visibility, reduce time-to-decision, adopt at speed Optimize your workforce readiness to drive better outcomes “It used to take us five days to react to demand changes. Now, with Anaplan, it takes us less than five minutes to come up with the necessary adjustments in production.”. Supply Chain Planning Manager, Del Monte Analyst and market research Forrester report: The Total Economic Impact™ of Anaplan Get the report 2024 Gartner® Magic Quadrant™ for Supply Chain Planning Solutions Insights and perspectives On-demand webinar Brewing up operational excellence: supply chain customer story with brew dr. kombucha. Learn how Kombucha manufacturer, Brew. Dr., has revolutionized their supply chain planning with Anaplan. Customer Story Sonos makes supply chain harmony with connected planning. Consumer electronics company creates end-to-end visibility and frees planners' time for analysis How Data is Replacing the Crystal Ball to Predict Better Outcomes Reyes Bottling is using data to predict better outcomes Learning to fly with Costa Coffee Learn how Costa Coffee navigated an aggressive growth surge with agility and resilience by partnering with Anaplan Intelligent Assortment Planning Agile, connected assortment planning strategy is more critical now than ever. Find out how Anaplan can help. Start planning with Anaplan Try a demo of our Connected Planning platform and unlock a future of opportunities. Consumer Products, Services & Retail Business Plan Consulting Our consumer product business plan consultants have hands-on experience founding, funding, and scaling ventures. we’re much more than an ordinary business plan writing service. think of us as your co-founder for the duration of our project.. Home » Industry Experience » Consumer Products, Services & Retail Are you looking for a skilled consumer services & consumer products business plan consultant ? Our experience includes: Automotive Sales & Service Bars, Taverns & Lounges Building Products Consumer Electronics Entertainment Venues Fitness Equipment Games & Toys Gas Stations & Car Washes Health Clubs, Gyms & Yoga Studios Jewelry & Accessories Packaged Foods & Beverages Restaurants & Other Food Service Spas & Salons My experience with Cayenne more than exceeded my expectations. I have tried in the past putting a business plan together, and with lots of hours put into doing it, I still don’t even come close to what Cayenne was able to do for us. — James Corriveau, CEO , Moringo Organics (Nutraceuticals), Franklin, TN Consumer Products & Services Business Plan Sample This is an example of one of our real-world consumer products/services business plans: Consumer Products & Services Experience Athletic club. Developed financial projections for the Los Altos Athletic Club, which was struggling to meet a major new competitive challenge. Automotive Dealerships Developed business plans, financial forecasts, pitch decks, and related materials for several automotive dealerships across the U.S. Home Networking Products Developed a business plan for a company that develops secure multi-room networking products and technologies for home electronic devices such as computers, video and audio players, and MP3 players. Specialty Beverages Developed business plan, investor presentation and served as interim CFO for $4 million public specialty beverage company. International Men’s Sneaker Brand Developed startup business plan for a men’s sneaker company with presence in U.S., Europe and Japan. Confections & Nutraceuticals As a 20 year expert in functional foods and snacks, developed and launched world’s first nutritionally enhanced candy company that delivered real nutrition such as calcium, Omega3 and Probiotics in premium candy forms. Raised seed capital funding and launched business in natural, organic, and specialty retail channel, and achieved early interest and in-market tests with Costco, Walgreens, Safeway, and others. Sold business to strategic buyer in a structured deal. Clothing Designers Developed the financing package for several up-and-coming designers for lines worn by celebrities such as Jennifer Love Hewitt. Skin Care/Personal Care Developed business plan for high growth startup in functional cosmetics. Developed business model alternatives designed to convert trial to long term brand usage. Consulted with client in the areas of concept development, product positioning, brand strategy, advertising, e-commerce, and sales management. Developed full business plan and investor pitch book. Company has received $2 million in early stage funding. Educational Products Served as interim CEO of a science-based educational products startup formed to deliver tools and toys to retail, educational, and e-commerce channels. Developed business plans and operating models for the company and successfully raised $500k in seed capital. Business model included US R&D with Chinese contracted product development in electronics, optics, and software. Operated both domestic and direct import sales. Premium Linens Advised a family-owned manufacturer/distributor/marketer of premium French linens on the sale of a majority equity stake to investors. Developed value maximization strategies revolving around further penetration of high-end U.S. boutiques and launching of U.S. direct-to-consumer e-commerce operation. Developed business plan, financial projections, and investor presentation, and calculated valuation based on value enhancement initiatives. Novelty Products Prepared a business plan, financial forecast, and investor presentation for NITELITE Sports. NITELITE develops and markets innovative golf and sports products to a customers ranging from Fortune 500 businesses to individual consumers. Golf Accessories Performed equity valuation of golf accessory manufacturer in connection with restricted stock unit (RSU) grant and 83(b) election. Prepared a business plan, financial forecast, and pitch deck for Skorcher, a developer of glute conditioning machines and programs. Backed by independent medical analysis, Skorcher offers better glute training than any other device. Specialty Food Importing Developed a business plan, financial forecast, and pitch deck for an importer of premium Greek olive oils, cheeses, and other food products. Played a central role in negotiations that resulted in substantial equity and purchase order financing. The company secured distribution agreements with several mass-market grocery chains. Cancer Prosthetics Developed an extended executive summary for a company that provides prosthetics and clothing, as well as grooming, styling, and therapeutic treatment products for male and female cancer survivors. Sports Apparel Served as CFO/COO of venture-stage action sports apparel company now doing over $50MM in revenue. Grew company from $800K to $6MM in 2.5 years, continuously graduating the company to less expensive working capital financing. Growth was achieved despite six-month cash cycles, capital-intensive production, nine prior quarters of negative earnings, no collateral, and no operating history — all without selling any equity. Served as a long-term strategic and financial advisor to a leading provider of premium beverages packaged in “green” containers. The company’s mission is to provide the highest quality beverages to the broadest possible market while addressing environmental protection, natural resource conservation, and good health. Skincare Product Researched market, competitors, and potential customers. Developed financial model, including detailed startup costs, valuation, and investment offering. Determined that current cost of product was too high for the business to break even and recommended that business rethink its product. Energy Efficient Lighting Prepared a business plan and financial forecast for Journee Lighting, a manufacturer of energy efficient specialty lighting for demanding applications such as display lighting and museum artifact illumination. The light source is a spectrum selectable LED with an onboard semiconductor-based control system. Men’s Grooming Products Developed startup business plan and Series A investment strategy for a men’s high-end grooming products company. Healthy Vending Prepared a business plan and financial forecast for YoNaturals in San Diego, California. YoNaturals is leading the fight against junk food in vending machines with the most comprehensive, healthy vending program in the nation. Matchmaking Service Worked with a global premium matchmaking service to expand via franchising and joint ventures. Drafted and revised international joint venture agreements, as well as UFOCs/FDDs and related contracts, including HR and vendor contracts. Research included business model, industry, competitor, and market analyses. Apparel Retail Developed business plans, financial forecasts, investor presentations, and related materials for several clothing retail outlets across the United States, including locations such as New York and Beverly Hills. Scooters & ATVs Developed business plan and investor presentation for Canadian scooter and ATV manufacturer that wished to enter U.S. market. Leather Goods Manufacturer and Distributor Developed a business plan and a new marketing strategy for 17 year old designer and distributor of leather goods. The client believed that it could not grow without a new marketing strategy and new capital. The company is now selling branded products through big box stores and specialty distributors. Med-Spas, Salons, Spas Created business plans and financial models for multiple salons, spas, and hybrid or niche med-spas across the U.S. Electronics and Toys Developed business plans and launched a variety of brands as a senior sales and marketing executive with Hasbro® and as CEO of BRIO® wooden toys. Developed critical success factors to benchmark concepts, operating costs and margins, go-to-market plans, and launch planning. Products such FurReal Friends®, Poochi®, and BRIO® Polar Express® railway set generated over $2 billion in global sales. Note: Some items reflect experience gained prior to joining Cayenne Consulting. Cayenne does not offer services that require licensing or registration with the NASD or other authorities. Read testimonials from our consumer products and consumer services clients . Why Choose Cayenne? Nine Great Reasons! Get it Right the First Time Funding is a binary event: either you succeed or you fail . If you fail, most investors won’t give you a second chance. Learn about the pros and cons of various approaches to developing business plans . Save Money - Really! We’re not cheap, but about half of our clients came to us after a business plan prepared by a less qualified business plan consultant did not work out. Why not get it right the first time and save money? Avoid Costly Mistakes We know what works, and, more importantly, what doesn’t. A single mistake can render your plan unfundable. We wrote the original and often-cited article on Why Business Plans Don’t Get Funded . Develop a Winning Strategy Most so-called “business plan consultants” take whatever you tell them and type it into software. We go much deeper and help develop a viable strategy for success, which we then express in a compelling business plan. No Salespeople Deal directly with a senior business plan consultant from Day One – not a commissioned salesperson who will hand you off to a junior writer. Personal relationships matter, and you need to know exactly who you’re dealing with. Fully Customized Some business plan writers charge extremely low fees because they have a cookie-cutter, assembly-line approach. You get what you pay for. We work from scratch to represent your unique vision, not somebody else’s. Work With True Experts We’ve walked in your shoes and we understand what you’re going through. Many of us have advanced degrees from institutions like Harvard , Wharton , Berkeley , Cornell , Columbia , Stanford , Yale , Dartmouth , and Chicago . Ongoing Support We don’t stop when the business plan is complete. We have a talented team ready to help you implement it as well, either on a retained basis as interim members of your founding team or on a project basis, as needed. Get Investors To Notice Most entrepreneurs can’t get investors to return their calls. A majority of our clients secure meetings with potential funders. Our team’s efforts have contributed to over $4.3 billion in financing! Consumer Products & Services Business Plan Consultants Devin Berger, MBA Brian Bohr, MBA DeForrest Borders III Tom Dykstra, MBA, CFPIM Paul Fiorello Jenifer Grant, MBA Jimmy Lewin Lee Muhl, JD Tim O'Connor, MBA George Papaioannou, CFA, MBA Eric Pickens, MBA Michael Robbins Stephanie Tolosa, MBA I'd like to speak with a consumer products business plan consultant. 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Options for Creating Your Business Plan Request Quote Contact Information Send Feedback What is CPG? A Guide to Consumer Packaged Goods May 23, 2024 In this blog, we'll dive deeper into what makes consumer packaged goods tick—from what these products are, to how they're marketed and the trends shaping their future. Whether you're a shopper curious about the products you use every day, or a retailer looking to better understand this dynamic industry, join us as we explore the intricate world of consumer packaged goods. Key takeaways CPGs, or consumer packaged goods, are items we use daily, including food, beverages, toiletries, and cleaning supplies, necessitating frequent replenishment. The global valuation of the consumer packaged goods industry exceeded 3.18 trillion USD in 2024, reflecting its essential role in daily life. Both consumers and industry players benefit from understanding the dynamics of the CPG market, including product demands and consumer behavior trends, which can influence shopping habits and business strategies. The CPG sector is continuously evolving, shaped by factors such as sustainability, digital marketing, and consumer preferences towards healthy and convenient products. Understanding consumer packaged goods Definition and scope. Consumer packaged goods (CPG) are products that are consumed by the average consumer daily. These products are typically low-cost items that need to be replenished frequently, such as food, drinks, household products, makeup, and clothing. CPG is a broad term that encompasses both durable and non-durable goods. These products are typically sold in retail stores and are often marketed to a wide range of consumers. CPG products are an essential part of the retail industry and account for a significant portion of overall sales revenue. Durable vs. non-durable goods CPG products are different from durable goods, which are products that are designed to last for a long time. Durable goods include items like appliances, cars, and furniture. While consumer packaged goods products are typically low-cost and need to be replenished frequently, durable goods are more expensive and are designed to last for a longer period. The rule of thumb for this is, that if it's supposed to last longer than 3 years, it is a durable good, and if it's supposed to last less than 3 years, it is a non-durable good. FMCG products Fast-moving consumer goods (FMCG) is another term used to describe CPG products. FMCG refers to products that are sold quickly and at a high volume. FMCG is a subset of consumer packaged goods, as it includes products that are consumed on a daily basis and need to be purchased frequently. FMCG products are typically broken down into three categories of consumer packaged goods: food and beverages (for example: groceries like milk, bread, and carbonated drinks) home care (for example: cleaning supplies, toilet paper, laundry detergent) and personal care (for example: cosmetics, toothpaste, or deodorant). Product categories Food and beverages. The food and beverage sector covers a wide range of consumer packaged goods that touch every part of our daily lives. This category is the largest within the CPG space, featuring everything from fresh vegetables and dairy products to a wide selection of snacks, including non-perishable items like sauces and canned foods. Beverages also form a significant part of this category, ranging from sparkling drinks and bottled water to teas and even alcoholic beverages—yes, even your favorite beer or wine is considered a CPG product! Personal care The personal care sector is a significant component of the CPG industry, covering an extensive range of products designed to enhance daily hygiene and beauty routines. This sector includes everything from basic toiletries and cosmetics to essential hygiene products such as soaps, shampoos, perfumes, and skincare items. It also encompasses specialized categories like baby care products, sexual health items, and feminine health products, catering to specific consumer needs and life stages. As consumer preferences evolve towards healthier and more sustainable lifestyles, brands in the personal care space are adapting. There's a growing trend toward products that are not only safe for personal use but are also environmentally friendly. This shift has significantly increased the development and availability of natural and organic personal care products. Household items Spanning a diverse array of everyday items, household CPG products are those that help keep our homes organized, clean, and running smoothly. This broad category includes essential cleaning supplies such as laundry detergents, dish soaps, and a variety of cleaning tools like brushes and sponges. In this category are also everyday items like toilet paper, diapers, and batteries that power a multitude of household gadgets. As consumers increasingly prioritize sustainability, there has been a noticeable expansion in the availability of eco-friendly alternatives across these categories. From biodegradable wipes to phosphate-free detergents and rechargeable batteries, consumer packaged goods companies are innovating to meet the rising demand for products that support environmentally responsible lifestyles while delivering the effectiveness that consumers expect. Clothing and apparel In the realm of consumer packaged goods, clothing and apparel items are central examples that highlight the short lifespan and frequent replenishment characteristic of CPGs. This category encompasses a wide array of everyday items such as t-shirts, jeans, sneakers, and hats, which often see high turnover due to changing fashion trends and wear and tear. Additionally, essentials like socks, underwear, and tights are quintessential CPGs in apparel, requiring regular replacement as they are worn regularly and subjected to the stress of daily use. These items are not only fundamental to our daily dressing routine but also reflect quick shifts in consumer preferences and seasonal styles, making them perfect examples of fast-moving consumer goods. Consumer demand Understanding consumer behavior is crucial for anticipating and responding to new consumer needs and preferences. The digital transformation is radically changing how consumers shop and how brands advertise their products in the CPG sector, impacting both purchasing patterns and brand interactions. Purchasing patterns Purchasing patterns are influenced by various factors such as price, convenience, and quality. For instance, if a product is priced too high, consumers may opt for a cheaper alternative. Similarly, if a product is not readily available, consumers may switch to a substitute product. Another factor that influences purchasing patterns is customer loyalty. Loyal customers tend to purchase the same brand repeatedly. Therefore, companies often focus on building customer loyalty by providing high-quality products and excellent customer service. Brand loyalty Brand loyalty is an essential aspect of consumer behavior. It refers to the tendency of consumers to recognize and want to repeatedly purchase products from a particular brand. Consumers develop brand loyalty when they trust a brand's products and have positive experiences with them. Brand loyalty is essential for companies as it helps them retain customers and increase their market share. Companies can build brand loyalty by providing high-quality products, excellent customer service, and engaging marketing campaigns. Retail and distribution Brick-and-mortar stores. Brick-and-mortar retailers continue to be vital and irreplacable channel for CPG product distribution. These physical locations not only allow for product display and direct consumer interaction but also play a crucial role in brand presence in the competitive retail landscape. Online retailers The rise of ecommerce has transformed how CPG products are sold. Online marketplaces like Amazon and Instacart offer new avenues for CPG companies to reach consumers directly. The digital platform provides valuable data that helps brands understand and adjust their strategies to meet consumer demand accordingly. White label CPG In the competitive world of consumer packaged goods, white label branding is emerging as a key strategy for brands looking to expand their market share while maintaining cost efficiency. Here’s how it works: one company produces the goods, and another company brands and sells them as their own. This setup differs from private labeling, which ties products exclusively to one retailer. White label products, on the other hand, are controlled and distributed by the branding company itself, allowing them to reach a wider audience. This approach lets brands capitalize on their established reputation to fetch higher prices than what the manufacturer might command, leveraging their marketing prowess and distribution networks to full effect. Navigating retail challenges with white label solutions White label branding can be particularly effective in today’s market, where speed and efficiency in product development and distribution are crucial. This solution allows CPG brands to quickly adapt to market changes without the overhead of manufacturing, thus enhancing their ability to compete with both national and private label brands in retail settings. For businesses looking to enter the CPG space without extensive production overhead, Supliful offers white label solutions that allow companies to market tested products under their own brand. This can be especially effective for startups wanting to capitalize on established manufacturing processes and consumer trust. Consumer packaged goods industry overview Consumer spending in the CPG sector is heavily influenced by specific behaviors related to health and wellness purchases, a preference for clinically proven products, and the impact of economic downturns on spending habits for both consumer packaged goods and durable goods. These goods are typically sold in retail stores, supermarkets, and online marketplaces. The way consumers shop for CPG products has significantly evolved due to advancements in technology and changing consumer preferences, leading to a shift towards ecommerce and the rise of direct-to-consumer brands. Market dynamics The CPG industry is a significant contributor to the global economy, with a market value of $3.18 trillion in 2024, according to Statista . In the United States, the CPG industry is expected to add $821 billion in value in 2024. The industry is projected to grow at a Compound Annual Growth Rate (CAGR) of 5.1% from 2022 to 2031, reaching a value of $18.94 trillion by 2031. The CPG industry is heavily influenced by the overall market dynamics, including GDP growth, consumer behavior, and economic recession. During a recession, consumers tend to purchase fewer non-essential items, which can impact the sales of CPG companies. However, CPGs are generally considered to be recession-resistant because consumers will continue to purchase everyday items regardless of the economic situation. Biggest CPG brands A few CPG brands dominate the industry, including Unilever , Nestle , PepsiCo , and Coca-Cola . These companies have a significant market share and are involved in pretty much all of the segments of the CPG industry. Retailers also play a crucial role in the CPG industry, as they are responsible for selling CPG products to consumers directly. Major retailers such as Walmart , Target , and Amazon have a significant impact on the industry as they directly affect consumers by their pricing and sales trends. The future of CPG As technology continues to advance, the future of consumer packaged goods looks bright. CPG companies, including well-known CPG brands like Liquid Death and Care/of, are increasingly relying on artificial intelligence (AI) and data to predict consumer trends and create products that meet their needs. These brands exemplify how innovation is key for a CPG brand to stay relevant and anticipate future consumer expectations. Technological advancements One major technological advancement that is already being used by CPG companies is AI. AI is helping companies analyze consumer data and predict trends, allowing them to create products that are more likely to be successful. This technology is also helping companies to streamline their operations and reduce costs. For example, AI can be used to optimize supply chain management, reducing waste and increasing efficiency. Another technological advancement that is likely to have a big impact on the future of CPG is the Internet of Things (IoT). IoT devices can be used to collect data on consumer behavior, allowing companies to create more personalized products. For example, a smart refrigerator could track the items that a consumer frequently purchases and automatically order them when they run out. How does the CPG industry differ from FMCG? CPG stands for consumer packaged goods, while FMCG stands for fast-moving consumer goods. The difference lies in the frequency of purchase and the shelf life of the products. CPGs are products that are used daily and have to be replenished frequently, such as food, beverages, personal care items, and household products. FMCGs, on the other hand, are products that are sold quickly at a low cost, such as soft drinks, toiletries, and snack foods. What are some common examples of CPG items? CPG items are products that consumers use daily and have to be replenished frequently. Some common examples of CPG items include household products, makeup, drinks, food, toilet paper, and clothes. What role does CPG play in the retail sector? CPG is a mayor space as products are sold in a variety of retail channels, including supermarkets, convenience stores, drug stores, or online. Retailers rely on CPG companies to provide products that consumers require regularly. CPG companies, in turn, rely on retailers to distribute their products to consumers. What characteristics define a company as a CPG company? A company is considered a CPG company if it produces and sells consumer packaged goods, which are products that consumers use daily and have to be replenished frequently. CPG companies typically have a large portfolio of products, which are sold at a low cost to consumers. How it works Help center Get label or store design Roadmap Liability insurance Terms of use Privacy policy IP policy Returns Social responsibility Affiliate program Next-Generation Joint Business Planning A group of industry insiders debate the current state of jbp but reach consensus on where it should be heading for the benefit of manufacturers, retailers and, ultimately, shoppers.. The best way to have a productive and meaningful discussion about joint business planning between consumer goods companies and retailers is to establish early on that everyone is talking about the same thing. That’s because joint business planning, or JBP, means different things to different people. “The term is really loose,” says Patrick Fitzmaurice, CEO and “head farmer” of Caterpillar Farm, an organizational change-activation consulting firm based in Atlanta. “It would be interesting to put a stake in the definition of what we mean when we talk about JBP.” Trying to nail down one specific definition based on interviews for this article was a flummoxing and ultimately futile exercise, but though there was no consensus on what JBP means and entails currently, there was a convergence of views on what it means and entails ideally. What came into focus is a vision of next-generation joint business planning, shaped by current and projected disruptions in retail. Modeling the JBP process of the future is beyond the scope of this article, but from those interviews, Path to Purchase IQ has distilled some of the essential elements. The Prerequisites By definition, JBP is collaborative, but in practice, manufacturers and retailers often aren’t truly collaborating. Instead, they’ve just slapped a new label on business as usual. Traditionally, a manufacturer’s sales rep met annually with the retailer’s buyer to discuss operating plans, including basic logistics and pricing, and the relationship that grew out of that was transactional, tactical and, inevitably, adversarial. This relationship based on jockeying isn’t conducive to JBP, which requires true collaboration for win-win results. Going forward, for JBP to work, the plan must be co-created, the timeline longer and the approach cross-functional. Trust is a sine qua non of JBP because of the transparency and exchange of information required of both parties. Each partner needs to understand the other’s business, its target shopper and its strategic goals. This understanding forms the basis of a mutually beneficial plan, and the open exchange of information – within the context of a confidentiality agreement – allows for its co-creation. Trust isn’t the only foundational element that must be built. “I call it getting your house in order – developing supports internally before even having JBP discussions,” says Mike Holcomb, managing director of The Partnering Group (TPG), a Cincinnati-based consulting firm that works with manufacturers and retailers on collaborative planning. Without pillars in place, from the right technology to properly trained people, even the most smartly conceived plan will fail to reach its potential. Because next-gen JBP requires resource reallocation and role changes internally, change management and cultural shift must take place. Toppling siloes, breaking habits and rethinking job descriptions are part of this process because JBP requires cross-functional connectivity, among other new paradigms in supplier-retailer relations. “Businesses run on systems that are slow to change – process systems, technology systems, people systems,” Fitzmaurice says. “A lot of legacy systems are holding manufacturers and retailers back from creating higher-order strategic initiatives.” The Players Traditional planning at the category manager and retail buyer level does not rise to the level of JBP. “Higher-level strategic planning, when done well, has a broad set of players who contribute in some way to the overall plan and its execution,” says Anne Chambers, CEO of Capre Group, an Atlanta-based sales and marketing consultancy that helps clients with JBP 2.0, which it calls “collaborative partnership planning.” Disciplines involved in that planning process include shopper insights, shopper marketing, loyalty, category management, merchandising, sales, revenue growth management, supply chain, e-commerce and others. Team members are connected and aligned throughout each other’s organizations. “Defined roles and aligned performance metrics keep all parties focused on mutual goals,” Chambers says. Omnichannel retailing, e-commerce, voice shopping and other developments bring more players to the team and “have an impact on the overall JBP process,” says Steve McGowan, regional vice president of shopper and consumer activation at Mondelez International. “Some additional people are included from both sides, and the strategic planning and alignment takes a broader look at the shopper journey to ensure that all touchpoints are being met.” Bringing in this many players, and giving them new demands and priorities, makes leadership endorsement critical. “Leadership plays such a key role with change management and creating momentum in the organization,” Chambers says. “People need to understand this is a permanent shift; it’s the way we go to market now.” Senior-level involvement is imperative on both sides to ensure follow-through and accountability. Though not bogged down in every detail, leaders oversee the entire process, from approving plans and allocating the necessary cross-functional resources to evaluating the results. Arguably, the most important player is one who is never physically present: the shopper. A shopper-centric approach inspired by the needs of the partners’ mutual customers becomes the game plan for “the trifecta – the win-win-win for the shopper, retailer and manufacturer,” says Christopher Brace, founder and CEO of the New York-based marketing strategy firm Syntegrate Consulting. Next-gen JBP requires significant time and resources. As a result, “Some retailers are backing away from the formal JBP work while still having really strong business plans with their strongest suppliers,” Holcomb says. Those that do engage in JBP do so strategically and selectively. “The manufacturers doing true JBP are working with two or three retailers in the country, and retailers are maybe doing it with four to six suppliers.” The Process Three essential elements of JBP are transparency, collaboration and agreed-upon performance indicators. “KPIs [key performance indicators] ensure that both sides are working against a consistent set of metrics that will help drive each respective business,” McGowan says. Currently, collaboration tends to be lopsided, “but JBP at its best entails that the retailer and the brand co-create programs that meet the needs of the brand, the retailer and the shopper equally,” says Brace, adding that retailers prefer partners who demonstrate they understand category growth drivers and have a category-first mindset. “A common mistake is going to the retailer and talking all about the brand instead of starting out by saying, ‘Here’s what we know about you and your growth strategy, your strategic priorities and your strategic challenges, and here’s how we can help you meet those challenges.’ Another mistake is showing up with a program idea that’s too fully baked to allow for retailer input.” Manufacturers with a good handle on consumer, shopper and category insights for their brands need to go the extra mile “to customize for the individual retailer’s shopper,” says Karen Sales, founder of Boise, Idaho-based sales and marketing firm KSMarketing and formerly vice president of shopper marketing at Albertsons. Category comes before brand, insights inform the conversation, and each side helps solve the other’s long-term business challenges by pooling resources. According to Fitzmaurice, if there’s one question that drives the planning process, it’s this: “Where is there growth we could be capturing together?” Partners reach an agreement on activities that will drive growth for both of them, as well as financial and nonfinancial targets, relevant KPIs, responsibilities and timing. The traditional 12-month planning cycle is too short for JBP. A time horizon of two or three years makes more sense “in the current landscape where so much can change in so many areas – commodities, shipping, e-commerce, media and measurement tools, supply chain, overall footprint,” says Sales. “Set a joint target and have a rolling plan you are working against with quarterly check-ins and annual reviews.” Technology will facilitate collaboration and program management. Shared access to a dashboard, with a common scorecard, will allow for ongoing joint reviews of the plan’s execution. Both parties can track agreed-upon performance measures. When those metrics are below par, the team can take corrective actions. The written plan is both the product of the process and the continuation of the process. In other words, the plan is a process. Based on mutual objectives and opportunities, it commits to writing the agreed-upon initiatives and activations; how and by whom they will be implemented; project milestones; expected benefits including return on investment; and performance metrics and results. So parties can anticipate and react swiftly to changing market conditions, a joint business plan should take market trends and forecasts into account. Once the plan is deployed, partners continuously evolve it based on real-time results and market shifts. The retail industry is rocked by near-constant disruptors, and part of the plan’s purpose “is to adapt to those challenges and lay out how to positively leverage or counteract them,” Holcomb says. Milestones include periodic check-ins when partners revisit the plan. “In most cases there’s usually an annual broader strategic alignment session followed by periodic check-ins on a quarterly or monthly basis to ensure we are all tracking and working against the collectively agreed-upon objectives,” McGowan says. The performance metrics typically take the form of a joint scorecard with two sets of metrics. “One is the traditional category-health metrics of volume, sales and profit,” Chambers says. “The second set of metrics measures the progress on category strategies. These are specific to the strategy and may include metrics like trips, basket or shopper penetration.” The financial benefits of next-generation JBP are evident on the scorecard, but beyond that are organizational benefits and – most importantly – benefits for the shopper. Many retailers and manufacturers have work to do before laying claim to those benefits or conferring them on the shopper. As Fitzmaurice sees it, the parties’ main problem is they’re not talking the talk, let alone walking the walk, when it comes to business planning. “Their discussions still focus on product and price issues instead of providing a better commerce experience,” he says. Right now, few have mastered true JBP, says Brace, but that just means there’s a vast frontier with plenty of opportunity. “If you’re the first in your category to do it, you’ll gain a competitive edge,” he says. But hurry, “because that’s where the industry is headed.” JBP 2.0 Cheat Sheet Ante Up: What Both Sides Should Bring to the Table • Cross-functional resources • Applicable technology • Shopper data • Consumer and shopper insights • Current and future category growth drivers • Trends (industry-, technology- and shopper-based) • Relevant intellectual property JBP Best Practices for Manufacturers • Show you understand the needs of the retailer. • Give retailers an opportunity to influence programs. Don’t show up with “fully baked” programs. • Share insights as to why shoppers do what they do inside the store, which stems from their life as consumers outside the store. • Identify what is emotionally meaningful to the shopper relative to your brand, your category and the retailer. • Translate those insights into stories that can be told in the retail space and other touchpoints along the shopper journey. Source: Christopher Brace, Syntegrate Consulting What JBP is NOT • Handled at the buyer/category manager level • Tactical trade negotiations • Category management • Promotional planning • Short-term planning • Brand focused Start free trial Start selling with Shopify today Start your free trial with Shopify today—then use these resources to guide you through every step of the process. Consumer Goods: Types and Value in Today’s Marketplace Consumer goods are products you buy for personal use, which differentiates them from capital goods. There are three types of consumer goods, and four categories. From the daily essentials we rely on to the indulgences that elevate our lives, consumer goods are the lifeblood sustaining the global economy. Understanding the nuances of consumer goods is essential for businesses striving to compete in a market flush with choices. Learn about the essence of consumer goods, explore their various subtypes and classification, and discover their significance in today’s dynamic marketplace. What are consumer goods? Consumer goods are items ordinary consumers buy for personal use. They’re also called final goods, because they are the end result of various production processes and the last stop on the supply chain . Some examples of consumer goods are clothes, electronics, food items, appliances, and passenger vehicles. The sale of most consumer goods is regulated by the US Consumer Product Safety Act, a law passed by Congress in 1972 for the purpose of establishing standards for product safety. The act also established the US Consumer Product Safety Commission, which applies these standards. The Commission can seek recalls from manufacturers or even ban products that violate the safety act. 📖 Read more: A Guide to Safe Product Sourcing and Dropshipping Consumer goods vs. capital goods Economists differentiate consumer goods from a secondary subclass of goods known as capital goods . These are goods used by businesses to produce and deliver consumer goods. Consumer goods, conversely, are intended for direct consumption. In other words, consumer goods are sold business-to-consumer (B2C) . Capital goods are sold business-to-business (B2B) . Types of consumer goods Durable goods, nondurable goods. Consumer goods can be broadly classified into three main categories: durable goods, nondurable goods, and services. Durable goods are items serving customers over a lifespan exceeding three years. These can include household appliances like refrigerators and washing machines, electronic devices such as laptops and smartphones, and vehicles like bicycles and cars. Durable goods are often the most expensive of consumer goods and are considered long-term assets by their owners. 📖 Read more: 20 Trending Products and Things To Sell Online Nondurable goods are also known as consumables, fast-moving consumer goods (FMCG), and consumer packaged goods (CPG) . Nondurable consumer goods sell quickly and are consumed relatively quickly, too. Examples of nondurable goods include food items, beverages, toiletries, laundry detergent, and household cleaning products. These items are essential for sustaining daily life in a modern economy and are characterized by their frequent replenishment cycles. This drives the demand for efficient production processes and supply chain management . In addition to tangible goods like durable and nondurable goods, in economic terms, some services are also considered consumer goods. Such services are intangible offerings provided by individuals or businesses to meet consumer needs. Examples of services as a consumer good are haircuts, plumbing work, auto repairs, and even some health care services. 📖 Read more: 8 Service Business Ideas To Turn Your Expertise into Profit Classification of consumer goods Convenience goods, shopping goods, specialty goods, unsought goods. Consumer goods can be further categorized into four main types: convenience goods, shopping goods, specialty goods, and unsought goods. It’s important to note, all four of these categories can contain durable goods, nondurable goods, services, or a combination thereof. Convenience goods are items consumers purchase frequently and with minimal effort. These products are readily available and often sold through multiple distribution channels to maximize accessibility. Common examples of convenience products include household staples like bread, milk, and toilet paper, as well as more discretionary purchases like snack foods, alcoholic beverages, and beauty products. Convenience goods are typically low-cost and serve basic consumer needs, and they may not require extensive marketing when compared with other types of consumer goods. Customers are less likely to compare different brands of convenience goods before making a purchasing decision; for this reason, marketers tend to prioritize store placement and ease of access when selling convenience goods. Shopping goods are items consumers compare and evaluate based on factors such as price, quality, and brand reputation before making a purchase decision . These products often involve more research and consideration, reflecting shoppers’ preferences and priorities. Shopping goods are consequently purchased less often than convenience goods, and tend to be priced at mid-tier points. Examples of shopping products include clothing, electronics, furniture, and appliances, which may vary in terms of durability, style, and functionality. Shopping goods represent a significant portion of consumer spending and require targeted marketing efforts to capture consumer interest and drive sales. Specialty goods are products with unique characteristics catering to specific consumer preferences or interests. These items often command higher prices and target specialized market segments. Examples of specialty goods include luxury watches, fine art, designer clothing, special-function vehicles (pick-up trucks, sports cars, etc.), and higher-end electronics. Specialty goods require tailored marketing strategies and brand positioning to differentiate themselves in smaller, competitive markets to attract discerning customers. 📖 Read more: Luxury Ecommerce Tips To Attract Affluent Customers Unsought goods are products consumers may not actively seek out or consider buying until a specific need or problem arises. They are often one-time purchases, and are often listed at higher price points. Examples of unsought products include insurance policies, funeral services, and certain health care products; they address critical needs or concerns but may not be top-of-mind for consumers. These items typically require aggressive, proactive marketing efforts to generate consumer awareness and interest. Unsought goods present unique challenges for consumer goods companies seeking to stimulate demand and accelerate innovation through targeted marketing campaigns. Consumer goods FAQ Why is it important to understand consumer goods. Nearly all businesses in the global economy deal with the consumer goods industry either directly or indirectly. Since different kinds of consumer goods are better suited to different marketing strategies, knowing the differences can help business owners properly identify and market them. What are consumer goods examples? Consumer goods encompass a wide range of products and services, including: Durable goods (appliances, cars) Nondurable goods (food, toiletries, cleaning products) Services (haircuts, landscaping, insurance coverage) Convenience goods (beverages, makeup, snacks) Shopping goods (clothes, electronics) Specialty goods (luxury items) Unsought goods (life insurance, funeral services) What are the three main categories of consumer goods? The three categories of consumer goods are durable goods, nondurable goods, and services. Durable goods have a life span of more than three years and include items like appliances and electronics. Nondurable goods are consumed or used up quickly, like food and toiletries. Services are intangible offerings provided to meet certain consumer needs, such as pet groomers and catering companies. Keep up with the latest from Shopify Get free ecommerce tips, inspiration, and resources delivered directly to your inbox. By entering your email, you agree to receive marketing emails from Shopify. popular posts The point of sale for every sale. Subscribe to our blog and get free ecommerce tips, inspiration, and resources delivered directly to your inbox. Unsubscribe anytime. By entering your email, you agree to receive marketing emails from Shopify. Latest from Shopify Jun 9, 2024 Jun 8, 2024 Jun 7, 2024 Learn on the go. Try Shopify for free, and explore all the tools you need to start, run, and grow your business. Try Shopify for free, no credit card required. Innovative Prompts Strategies Packs Skills Packs SOPs Toolkits Business Ideas Super Guides Innovation Report Canvas Examples Presentations Spreadsheets Discounted Bundles Search for: What Is Business-to-Consumer (B2C)? Types and Examples Business-to-Consumer (B2C) refers to the transactions between a business and individual consumers. In other words, it is the process of selling products or services directly to the end users. B2C is a popular business model that has gained traction in recent years due to the rise of e-commerce and the increasing number of consumers who prefer to shop online. B2C businesses typically focus on marketing their products or services to a specific target audience, which helps them to build brand loyalty and increase sales. These businesses also tend to offer a wide range of products or services to cater to the diverse needs of their customers. The success of a B2C business depends on its ability to understand the needs and preferences of its target audience and provide them with high-quality products or services that meet their expectations. What is Business-to-Consumer (B2C)? Business-to-Consumer (B2C) is a type of commerce transaction that involves the exchange of goods or services between a business and a consumer. In this model, businesses sell their products or services directly to individual customers who use them for personal consumption or use. B2C transactions occur in various forms, including online shopping, retail stores, and direct mail marketing. The rise of e-commerce platforms has made it easier for businesses to sell their products directly to consumers, allowing for a more personalized and efficient shopping experience. Businesses that engage in B2C transactions typically focus on building strong relationships with their customers. They do this by offering high-quality products, exceptional customer service, and personalized marketing campaigns that cater to the unique needs and preferences of individual consumers. Some of the critical characteristics of B2C transactions include shorter sales cycles, lower transaction volumes, and a focus on building brand loyalty. Businesses that operate in the B2C space must be able to adapt quickly to changing consumer preferences and market trends to remain competitive in the industry. Business-to-Consumer (B2C) vs. Business-to-Business (B2B) Business-to-Consumer (B2C) and Business-to-Business (B2B) are two different types of e-commerce models. B2C refers to transactions between businesses and individual consumers, while B2B refers to transactions between businesses. Understanding the differences between these two models is essential for businesses that want to succeed in the online marketplace. One of the most significant differences between B2C and B2B is the target audience. B2C companies focus on individuals, often selling products or services that are designed for personal use. B2B companies, on the other hand, sell products or services to other businesses. This means that B2B companies need to focus on building relationships with other businesses, while B2C companies need to focus on building relationships with individual consumers. Another important difference between B2C and B2B is the sales process. B2C transactions are typically straightforward and don’t involve a lot of negotiation or customization. B2B transactions, on the other hand, are often more complex and involve a lot of negotiation and customization. This is because businesses often have specific needs and requirements that need to be addressed. Finally, the marketing strategies used in B2C and B2B are also different. B2C companies often focus on creating emotional connections with their customers, using advertising and other marketing tactics to appeal to their emotions. B2B companies, on the other hand, focus on building trust and credibility with other businesses. This often involves creating content that demonstrates their expertise and knowledge in a particular industry. Target audience: individual consumers Target audience: other businesses Sales process: straightforward Sales process: complex Marketing strategy: emotional appeal Marketing strategy: trust and credibility Overall, B2C and B2B are two distinct e-commerce models that require different approaches to succeed. Businesses that want to succeed in the online marketplace need to understand the differences between these two models and tailor their strategies accordingly. 5 Model Types of B2C Companies Direct sellers. Direct sellers are companies that sell directly to the end consumer without any intermediaries. These companies often have a sales force that works on commission and sells products door-to-door or through home parties. Examples of direct sellers include Avon, Mary Kay, and Tupperware. Online Intermediaries Online intermediaries are companies that facilitate transactions between buyers and sellers on their platform. These companies make money by charging a commission or a transaction fee. Examples of online intermediaries include Amazon, eBay, and Airbnb. Advertising-based Advertising-based companies generate revenue by selling advertising space on their platform. These companies often offer their services for free to consumers and make money by displaying ads. Examples of advertising-based companies include Facebook, Google, and Instagram. Community-based Community-based companies create a platform where consumers can connect with each other and share information. These companies often make money by charging a membership fee or offering premium services. Examples of community-based companies include LinkedIn, Yelp, and Reddit. Fee-based companies charge consumers a fee for their services. These companies often offer a specialized service or product that consumers are willing to pay for. Examples of fee-based companies include Netflix, Spotify, and Dropbox. In conclusion, there are several model types of B2C companies, each with its own unique way of generating revenue. Direct sellers sell directly to consumers, online intermediaries facilitate transactions, advertising-based companies sell advertising space, community-based companies create a platform for consumers to connect, and fee-based companies charge consumers a fee for their services. B2C Companies Examples Business-to-Consumer (B2C) companies are those that sell products or services directly to individual consumers. These companies operate in a wide range of industries, from retail to healthcare to entertainment. Here are some examples of successful B2C companies: Amazon Retail Online marketplace for products and services Netflix Entertainment Streaming service for TV shows and movies Uber Transportation Ride-sharing platform Zocdoc Healthcare Online platform for booking doctor appointments Amazon is one of the largest B2C companies in the world, offering a wide range of products and services through its online marketplace. Netflix has revolutionized the entertainment industry by providing a convenient and affordable way for consumers to access TV shows and movies. Uber has disrupted the transportation industry by offering an alternative to traditional taxi services. Zocdoc has made it easier for consumers to book doctor appointments, saving time and reducing frustration. Other successful B2C companies include Apple, Nike, Coca-Cola, and Procter & Gamble (P&G). These companies have built strong brands and loyal customer bases by providing high-quality products and services that meet the needs and desires of consumers. Benefits of Business-to-Consumer (B2C) Increased sales. One of the biggest benefits of B2C is the potential for increased sales. By selling directly to consumers, businesses can tap into a large and diverse market. This can lead to higher sales volumes and increased revenue. Additionally, B2C businesses can use targeted marketing strategies to reach specific customer segments, which can further boost sales. Direct Customer Interaction Another advantage of B2C is the opportunity for direct customer interaction. By selling directly to consumers, businesses can build relationships with their customers and gain valuable feedback. This can help businesses improve their products and services and better meet customer needs. Direct customer interaction can also lead to increased brand loyalty, as customers feel a stronger connection to businesses that take the time to engage with them. Brand Loyalty Brand loyalty is a key benefit of B2C. By selling directly to consumers, businesses can build strong brand identities and cultivate loyal customer bases. This can lead to repeat business and positive word-of-mouth marketing. Additionally, B2C businesses can use social media and other digital marketing channels to engage with customers and build brand awareness. Overall, B2C offers many benefits for businesses looking to reach and engage with consumers. By tapping into a large and diverse market, building strong customer relationships, and cultivating brand loyalty, B2C businesses can achieve long-term success and growth. Challenges of B2C Intense competition. One of the biggest challenges in B2C marketing is intense competition. With so many companies vying for the attention of consumers, it can be difficult to stand out from the crowd. This is especially true in industries that are already saturated with competitors. Companies must work hard to differentiate themselves from their competitors and provide a unique value proposition to their customers. High Marketing Costs B2C marketing can be expensive, especially when it comes to advertising and promotion. Companies must invest significant resources into creating and distributing marketing materials, such as television and radio ads, billboards, and print advertisements. In addition, digital marketing channels such as social media and search engine advertising can also be costly. As a result, companies must carefully manage their marketing budgets to ensure that they are getting the best return on investment. Customer Acquisition and Retention Acquiring and retaining customers is another major challenge in B2C marketing. Consumers have many options when it comes to purchasing products and services, and companies must work hard to attract and retain their business. This involves creating compelling marketing messages that resonate with consumers, as well as providing excellent customer service and support. Companies must also work to build brand loyalty among their customers, which can help to ensure long-term success. In conclusion, B2C marketing presents a number of challenges for companies. These include intense competition, high marketing costs, and the need to acquire and retain customers. However, with careful planning and execution, companies can overcome these challenges and succeed in the B2C marketplace. Effective B2C Strategies Business-to-Consumer (B2C) marketing is all about selling products and services directly to individual consumers. Here are some effective B2C strategies: Personalization Personalization is the process of tailoring marketing messages and experiences to individual consumers based on their preferences, behaviors, and purchase history. By personalizing your marketing efforts, you can increase customer engagement, loyalty, and sales. Some ways to personalize your B2C marketing include: Using customer data to create targeted marketing messages; Offering personalized product recommendations based on purchase history; Creating personalized landing pages and email campaigns. Multichannel Marketing Multichannel marketing is the practice of reaching consumers through multiple channels, such as email, social media, mobile apps, and in-store experiences. By using a variety of channels, you can increase brand awareness, customer engagement, and sales. Some tips for effective multichannel marketing include: Creating a consistent brand message across all channels; Using data to understand which channels your customers prefer; Tracking and analyzing customer behavior across all channels. Social Media Marketing Social media marketing is a powerful tool for B2C companies to connect with consumers, build brand awareness, and drive sales. Some best practices for social media marketing include: Choosing the right social media platforms for your target audience; Creating engaging and shareable content; Using social media influencers to promote your products or services. By implementing these effective B2C strategies, you can drive customer engagement, loyalty, and sales for your business. In conclusion, Business-to-Consumer (B2C) is a crucial aspect of any business that seeks to reach out to its customers. The B2C model is focused on providing products and services directly to the end consumers. It has become increasingly popular in recent years due to the rise of e-commerce and online shopping. One of the key advantages of the B2C model is that it allows businesses to build strong relationships with their customers. By providing personalized experiences and engaging with customers on a regular basis, businesses can develop a loyal customer base that will continue to support them in the long run. Another advantage of the B2C model is that it allows businesses to gather valuable data and insights about their customers. By analyzing customer behavior and preferences, businesses can tailor their products and services to better meet the needs of their target audience. Overall, the B2C model is a powerful tool for businesses that are looking to grow and expand their customer base. By focusing on the needs and preferences of their customers, businesses can build strong relationships and create a loyal following that will help them succeed in the long run. Daniel Pereira Related posts. What is SWOT Analysis and How to Do One with Examples There are a variety of factors necessary to build a successful business or product. One [...] Revenue Streams In the Business Model Canvas, the Revenue Streams component encompasses the money that the company [...] Customer Segments Customer Segments is the first and most important building block of the Business Model Canvas. [...] Key Partners The penultimate component – Key Partners – deals with the network of partners that put [...] What is PESTLE Analysis? Understanding the External Factors Impacting Your Business PESTLE Analysis (also known as PEST Analysis) is a popular tool used by companies to [...] How to do a SWOT Analysis in 7 Steps (with Examples & Template) A SWOT analysis is a strategic planning tool that an organization can use to thoroughly [...] Value Proposition Developing your Value Proposition should always be the second step in designing a Business Model. [...] What is Customer Discovery and Why you Should Care About it? If you are thinking of starting a new business or planning to launch a new [...] RECEIVE OUR UPDATES Username or email address  * Password  * Remember me Log in Lost your password? Search Search Please fill out this field. Capital Goods Consumer goods, key differences, the bottom line. Business Essentials Capital Goods vs. Consumer Goods: What's the Difference? Thomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018. Thomas' experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning. Better Homes & Gardens / Will Dickey Capital Goods vs. Consumer Goods: An Overview Capital goods and consumer goods are terms used to describe goods based on their use. A capital good is any physical asset used for production (by businesses to produce goods or services for consumers). Consumer goods are those used by consumers and have no future productive use. The same physical good could be either a consumer or capital good, depending on how the good is used. For example, a riding lawn mower purchased by a landowner to mow the yard is a consumer good; the same lawn mower purchased by a lawn care business is a capital good. Key Takeaways Capital goods are man-made products used by a business to produce consumer or other capital goods. Consumer goods are products used by consumers. Capital goods include items like buildings, machinery, and tools. Examples of consumer goods include food, appliances, clothing, and automobiles. The same physical good could be either a consumer or capital good, depending on whether it's used by a business in the production process or purchased for consumption and not intended for production or profit. Capital goods are any tangible asset used by a business to produce goods or services for consumer goods or use by other businesses. They are generally durable goods that can be used more than once. The most common capital goods are property, plant, and equipment (PPE). Natural resources not modified by human hands are not considered capital goods. Businesses accumulate capital goods and put them to use to produce the goods and services they sell. In other words, capital goods make it possible for companies to produce goods, often at a higher efficiency level. A consumer good is any good purchased for consumption and not used later to produce another consumer good. Consumer goods are sometimes called final goods because they end up in the hands of the consumer or the end-user. Examples of consumer goods include food, clothing, vehicles, electronics, and appliances. Consumer goods fall into three categories: durable goods, nondurable goods, and services. Durable goods have a lifespan of more than three years and include motor vehicles, appliances, and furniture. Nondurable goods have a lifespan of fewer than three years. This includes consumer staple purchases such as food, clothing, gasoline, and services like haircuts, oil changes, and car repairs. Among the largest group of consumer goods are fast-moving consumer goods, which include nondurable goods like food and drinks. Types of Consumer Goods Consumer goods can be classified in four ways: Convenience goods : Goods consumed and purchased regularly, such as milk. Shopping goods : Goods that require more thought and planning and include appliances and furniture. Specialty goods : Goods that are more expensive and cater to a niche market. Items such as jewelry are specialty goods. Unsought goods : Goods purchased by some consumers to serve a specific need. Life insurance is an unsought good. The sale of most consumer goods is overseen by the Consumer Product Safety Act passed by Congress in 1972. The act created the U.S.  Consumer Product Safety Commission, which regulates product safety and has the authority to seek recalls from manufacturers and ban products under certain circumstances. The purpose of capital goods is to help produce other products. They are meant to be used for production, while consumer goods are bought for personal and final consumption. Businesses, companies, and manufacturers buy capital goods. Consumer goods are bought by consumers. Consumer goods are characterized by having a direct demand, as they directly satisfy the needs of consumers. On the other hand, capital goods have a derived demand since they indirectly satisfy consumer needs. Consumer Goods vs. Capital Goods  Consumer Goods  Capital Goods Intended For Personal consumption Inputs for production End User  Consumers Businesses Marketing B2C B2B Examples Clothing, food, milk, furniture, cars, gasoline Raw textiles, unrefined wheat, milking machinery, tractors, crude oil Capital Goods vs. Consumer Goods Example A capital good is a man-made product that is used in production. A pre-built computer purchased by a graphics design business is a capital good. Additionally, the components of that computer are capital goods because they were used to build a computer designed for commercial use. The same manufacturer could sell the same computer for home use. This computer would be a consumer good, even if it had the same components as the one sold to the graphics design business. Capital and consumer goods can be the same or different products; the distinction lies in how the goods are used and who uses them. What Is the Difference Between a Capital Good and Capital Stock? Capital goods are the assets used by companies and manufacturers in the process of production. Capital stock, on the other hand, refers to the total physical capital available in a company (in the form of plant, property, equipment, machinery, etc.). Capital stock can also refer to the amount of common and preferred shares a company is authorized to issue. Do Durable Goods Include Both Capital Goods and Consumer Goods? Yes, durable goods can be capital goods (man-made, durable items used by businesses to produce goods and services, like tools, buildings, vehicles, machinery, and equipment), as well as consumer goods. Consumer goods that have a long life span (i.e., over three years) and are used over time are considered durable goods. Examples include vehicles, appliances, and technology. Is a House a Capital Good? A house can be a capital good if it's used by a business to produce goods and services. Just like tools, vehicles, machinery, and equipment, buildings can also be capital goods. A clear example would be a hotel. In most scenarios, however, a house would be a consumer good because it is purchased primarily to reside in. What Are Fast-Moving Consumer Goods? Fast-moving consumer goods (FMCG) are cheaper products that sell quickly such as milk, gum, fruit and vegetables, soda, beer, and common drugs like aspirin. The products you buy in stores or online are consumer goods. These are intended for personal use or consumption and are sold by businesses to individuals or households. Capital goods, on the other hand, are those goods that businesses buy to make other goods, including consumer goods. These would include things like machinery, raw materials, and specialized vehicles used on the job. U.S. Consumer Product Safety Commission. " Who We Are—What We Do For You ." Terms of Service Editorial Policy Privacy Policy Unilever Global Change location Leading in the next era of corporate sustainability Fewer things, done better, with greater impact. Our Growth Action Plan addresses these challenges head-on. In the coming years, our focus will be on four sustainability priorities . A montage of Unilever products being used together with agricultural footage. Detailed description A jar of Hellmann’s mayonnaise on a kitchen counter, a sandwich in the background with someone holding a knife. The sandwich is then pressed down ready to cut. Tomatoes growing on a vine. Someone in the foreground with a handful of soil. A woman rubs Vaseline on her lower legs. Rain falling into a pool of water in a rice field. A rice field with water droplets rising up. A man tosses a Persil capsule into a washing machine. A Persil 3-in-1 Bio packshot with the words ‘Dirt is good’. Our ambition is to deliver net zero emissions across our value chain. Our ambition is to deliver resilient and regenerative natural and agricultural ecosystems. Our ambition is an end to plastic pollution through reduction, circulation and collaboration. Livelihoods Our ambition is to ensure a decent livelihood for people in our global value chain, including by earning a living wage. The next era of corporate sustainability The first era was about ringing the alarm. The second was about setting long-term ambitions. The third is about delivering impact faster , by making sustainability progress integral to business performance. We intend to lead in this new era by being: More focused in allocating our resources using capital allocation to make progress across our sustainability priorities. More urgent in our actions with roadmaps, clear accountability and reward. More systemic in our advocacy through deeper collaboration and more assertive policy advocacy. "Our updated commitments are very stretching, but they are also intentionally and, unashamedly, realistic. We are determined that Unilever will deliver against them." Hein Schumacher, CEO Read our CEO Hein Schumacher’s views Our sustainability news Why we’ve updated our Climate Transition Action Plan 16 May 2024 Our updated Climate Transition Action Plan (CTAP) sets out Unilever’s ambitious new climate targets. Discover how we’re focusing our efforts so we can deepen our impact by 2030, and why we believe taking urgent climate action now is good for our business in the long term. UN plastics treaty: reasons to be optimistic With the fourth round of negotiations for a UN treaty to end plastic pollution now concluded, Unilever CEO Hein Schumacher reflects on the progress made and the road ahead. How we’re improving livelihoods across our value chain Head of Social Sustainability, Anouk Heilen, explains how we’re ensuring a living wage for everyone we work with and why better living standards can build a stronger business. How we’re aiming for greater impact with updated plastic goals 30 April 2024 We recently announced an evolved sustainability agenda to make more tangible progress on the big complex challenges we face. Pablo Costa, Global Head of Packaging, explains what that means for our approach to plastic, and how our updated goals are aimed at making greater impact. How powerful partnerships are helping grow resilient agricultural supply chains 22 April 2024 It’s set to be a year of acceleration for our projects that implement regenerative agriculture practices. Lucas Urbano, our Head of Regenerative Agriculture, Business Operations, explains why partnerships with both farmers and tech experts will be key to scaling up the programme. Looking for more on sustainability? Find out about our approach to sustainability and our ongoing commitment to responsible business. Our commitment to responsible business Find out more about our progress and reporting on issues such as positive nutrition, business integrity, and safety. Human rights Human rights continue to underpin our sustainability agenda. Find out more about our progress. Equity, diversity and inclusion Find out more about how we are working towards a society where everyone is treated equally. Unilever Annual Report Read more about our Growth Action Plan and how we are stepping up our execution to deliver improved performance. Legal disclaimer Disclaimer covering our sustainability pages. Read the disclaimer covering our sustainability pages (PDF 92.63 KB) . Salesforce is closed for new business in your area. My View My View Following Following Saved Saved Americans are getting pickier, but they are still spending on hot items Medium Text RETAILER RELEVANCE Sign up here. Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Andrea Ricci Our Standards: The Thomson Reuters Trust Principles. New Tab , opens new tab Thomson Reuters Ananya as the U.S. Consumer and Retail Sector Specialist covers breaking and business news on major firms including Walmart, Nike, Procter & Gamble, PepsiCo and Coca-Cola among other U.S. listed Cruises, Apparel Makers, Discount Stores, Beverages, Second-hand Retailers, Restaurants, Luxury companies. She writes long-form initiative stories supported by data sets explaining the current consumer demand trends in the U.S. and the impact of macroeconomic conditions on retailers and companies. As a sector lead, she mentors and trains newer members of the team bringing them up to speed with sector knowledge. Business Chevron European nations compete for Chinese EV factories, jobs even as EU weighs tariffs European governments may be wary of budget Chinese electric vehicles flooding their markets but they're also fiercely competing for a share of the manufacturing investment and jobs the new competitors bring. Advertisement Supported by Feeling Consumers’ Pain, Retailers Bring Back Discounts The pandemic shopping boom led many stores and brands to widen profit margins by charging more. Now value is the watchword as shoppers grow choosier. Share full article By Talmon Joseph Smith and Jordyn Holman U.S. consumers, fatigued by a three-year bout of inflation, want lower prices. And large retailers that have increased prices, partly to contend with their own rising costs, appear to be responding to customer concerns — to an extent. Walgreens said last week that it was lowering prices on over 1,000 items. Target recently announced modest price cuts on 5,000 food products and household goods. Craft and furniture stores like Michael’s and Ikea have also said they will drop prices on popular items. A broader range of companies have indicated on quarterly earnings calls that they plan to slow price increases and seek other ways to expand profitability. Signaling empathy with customers facing higher living costs is an increasingly important marketing strategy, retail analysts say. But regardless of motivation, a shift is in motion that may help ease inflation in the coming months. “Retailers have recognized they have to make some movement on pricing because the customer now is getting to the point where they’re shopping around more, they’re cutting down on the amount that they buy,” said Neil Saunders, managing director at GlobalData Retail, a research and consulting firm. In some ways, the industry seems to be entering a new phase. After a slog for retailers during much of the 2010s, when they often resorted to heavy discounts to gain or maintain market share, the pandemic upended consumer habits. Suddenly, bank accounts were buoyed by emergency federal aid, and millions of consumers unable or unwilling to spend on in-person services shifted to buying goods. We are having trouble retrieving the article content. Please enable JavaScript in your browser settings. Thank you for your patience while we verify access. If you are in Reader mode please exit and  log into  your Times account, or  subscribe  for all of The Times. Thank you for your patience while we verify access. Already a subscriber?  Log in . Want all of The Times?  Subscribe . What consumer-goods sales leaders must do to emerge stronger from the pandemic Coming into 2020, the relationship between consumer-goods manufacturers and retailers showed signs of strain, with each battling to stay ahead of new challenges. For consumer-goods companies, there were threats from niche and private-label brands and from the squeezed margins that came with selling more goods through higher-cost channels. Retailers, meanwhile, were trying to step up their digital game while dealing with pressure from discounters, e-commerce giants, and price-driven consumers. About the authors Then COVID-19 became a global pandemic and everything changed. As we noted in a recent article , COVID-19 is amplifying a dozen trends that have been disrupting the industry for more than a decade. The move to online shopping seemed to accelerate at warp speed, with US grocery’s penetration into e-commerce rising from 13 percent before the pandemic to more than 31 percent by the end of March. 1 David Bishop, “Online grocery: New consumer research press release,” research conducted August 21–23, 2019, and March 23–25, 2020, Brick Meets Click, March 26, 2020, brickmeetsclick.com. As consumers stayed home to stop the spread of the coronavirus, they used mobile apps and websites to buy a different mix of products than they had previously purchased in stores, with more focus on pantry staples and at-home occasions. Those who did venture into stores found the experience transformed by new rules on physical distancing, hygiene, and mask use. By mid-June, McKinsey’s consumer-sentiment survey  found that more than 75 percent of Americans had tried new brands from new places or otherwise changed how they shop as a result of the crisis. By mid-June, McKinsey’s consumer-sentiment survey found that as a result of the crisis, more than 75 percent of Americans had tried new brands from new places or otherwise changed how they shop. With so many factors in flux, the case for deeper ties between consumer-goods companies and retailers has rarely been stronger. Along with the challenge of keeping products stocked during the current public-health crisis, retailers and manufacturers now need to collaborate more closely to adapt to new consumer preferences, shopper behaviors, and regulations. In doing so, they will be better equipped to navigate trends that many thought would take years to play out: touchless payments, curbside pickups, automated fulfillment, omnichannel marketing, and more (Exhibit 1). The COVID-19 crisis has transformed the value proposition that consumer-goods companies can offer to retailers. McKinsey’s recent consumer-sentiment survey indicates that many  pandemic-related behaviors  are likely to continue after the crisis. We have argued that consumer-goods leaders need to make changes across the entire value chain , from how they manage talent to how they set and fund priorities. To succeed in this challenging environment, they must also reimagine how they sell their products. In this article, we will examine the growing impetus for partnerships, as well as the four imperatives for how consumer-goods leaders can—and must—reshape their sales function to adapt. A complicated and sometimes competitive partnership As shoppers have embraced a broader mix of brands and channels, maintaining profitability and market share has become increasingly challenging for both consumer-goods manufacturers and retailers. While e-commerce has created new opportunities to reach and sell to consumers, it has also brought added costs, risks, and competition from a wider array of brands. At the same time, retailers increasingly compete with consumer-goods companies, creating their own brands to build loyalty with consumers and develop higher-margin income streams. After a decade when consumer-goods companies and retailers posted joint profit growth of around 9 percent, combined economic profits began to dip in 2014 (Exhibit 2). Manufacturers bore the brunt of that shift, with their profits falling, while retailers still managed to eke out some gains. Faced with an overall trend of lackluster growth and tight margins, retailers have pressed manufacturers to offer products that are more tailored, sustainable, and exclusive to their stores or platforms. While such pressures have sometimes increased tension between manufacturers and retailers , they have also led to more creative collaborations. The COVID-19 crisis has added another dimension, creating more urgency to partner around new technology, data, and insights on shoppers across sales channels. With the sudden shift to new ways of buying, the need to coordinate and collaborate has never been greater. For consumer-goods companies that have struggled to retain shelf space and consumer loyalty to their products, this creates a rare opportunity for sales teams to reinforce and reimagine their retail relationships. In particular, three shifts are materially changing how consumer-goods players and retailers work together: changing consumer preferences, accelerating omnichannel demands, and the need for increased speed and responsiveness. Changing consumer preferences. With the unprecedented scale and scope of the lockdowns, consumers have naturally developed an appetite for products and services centered on the home. It’s no surprise that sales at US quick-service restaurants, excluding those for coffee and pizza, have dropped by more than a third, while sales at casual-dining restaurants have dropped by as much as 70 percent. The question is whether consumer preferences will revert back to prepandemic norms once the restrictions are lifted. We believe that consumers are likely to continue spending a significant amount of time at home, driven by a desire to save money and reduce the risk of infection—plus, a newfound pleasure in nesting. Our research indicates that it could take anywhere from three to ten years for out-of-home channels to fully recover. 2 Earnest; Foursquare; industry reports (for example, from Bernstein); McKinsey research and analysis in partnership with Oxford Economics. For makers of consumer goods, the implications are profound. While staying home could help sustain demand through online channels, it does not bode well for consumer-goods sales to restaurants, hotels, and other commercial partners. Within retail channels, the longer-term shift away from physical stores and higher-priced retail brands has also been accelerated by the pandemic. We estimate that grocery supermarkets and convenience stores are likely to lose up to seven points of market share to discounters, hypermarkets, and online sales. This is the new norm. For consumer-goods companies, it’s time to shift from crisis mode to a more fundamental realignment of their portfolio and route-to-market strategy to reflect this. Accelerating omnichannel demands. As consumers move more seamlessly between online retailers and brick-and-mortar stores, they increasingly expect the brands that serve them to do the same. The need for manufacturers and retailers to deliver omnichannel excellence has become more acute as the pandemic gives rise to a hybrid model that combines digital commerce with products and services delivered by a neighborhood store. Having been forced to shop online by the pandemic, many consumers are discovering that they quite like doing so. The ease and convenience of e-commerce are especially appealing when the alternative is wearing a mask to stand in line and risk infection by shopping inside a store. Our research suggests that 70 percent of consumers plan to continue or increase their online shopping after the restrictions end. Many of those consumers—57 percent—said that they intend to order online and pick up their goods at local stores. Moreover, 28 percent of them said that that they plan to avoid stores altogether. When consumers do visit stores, they are likely to walk down the aisles with less money, more safety concerns, and their phones at the ready to compare prices. If brands and retailers are not prepared to respond with unique product offers, experiences, and other incentives to buy, they could lose sales to competitors that can understand and deliver what each shopper wants. Increased speed and responsiveness. The progression of this pandemic is likely to remain unpredictable for a while. Rising infection rates can quickly result in renewed restrictions, which means retailers and manufacturers must adopt a more fluid and dynamic approach to getting goods into the hands of consumers. For many companies, that’s meant more emphasis on creating rapid-response teams and resilient operations, as well as a willingness to take risks. When COVID-19 hit, one multinational retailer expanded grocery deliveries from a modest pilot to all of its stores in a matter of days. Instacart hired 300,000 employees in a month to meet demand for at-home deliveries. Both retailers and manufacturers have been forced to speed up their decision making and comfort with ambiguity as they respond rapidly to the pandemic. Even more important than acting quickly is the ability to act quickly together. In our recent survey of consumer-goods sales leaders, conducted in collaboration with The Gap Partnership, 60 percent of respondents indicated that they had canceled promotions in response to the pandemic. Of course, many pandemic-related issues, from supply-chain hiccups to shifts in demand, have been beyond the leaders’ control. Half of all sales leaders expect to work with retailers on managing assortment rationalization, net-price deflation, and new promotion events coming out of COVID-19 (Exhibit 3). The results will depend on the levels of trust and transparency between manufacturers and their partners, as well as the willingness to pool data and other resources. Four sales imperatives for consumer-goods leaders Throughout the crisis, we have explored how consumer-goods companies need to adapt their strategy and collaborate across every aspect of their business  to create sustainable growth in this new environment. To increase sales, four priorities stand out: differentiate, diversify, be dynamic, and digitize. Differentiate: Tailor your sales team and capabilities to the unique needs of each retail partner As sales tools and practices become more standardized, consumer-goods companies need to be much more intentional in how they approach new channels, customers, and consumer segments. That means customizing how they leverage data and other assets to address the unique aspirations and needs of each retail customer. It means analyzing shopper data and market insights to understand not only what retailers want but also what they need. One US manufacturer, for example, has reorganized its cross-functional sales teams to tailor its services to specific needs. For one retail customer, that meant adding more data-analytics expertise to help hone an omnichannel strategy ; for another customer, the consumer-goods sales team added more supply-chain and operational expertise to help the retailer streamline its operations. By adding more flexibility to the sales model, this manufacturer was able to gain a leading share with both customers. No manufacturer can offer all things to all retailers. Differentiation is critical in choosing the right trade-offs to manage profitability. With a dynamic customer-portfolio strategy, a consumer-goods manufacturer can provide each customer with different resources and measure them by different metrics to balance overall costs (Exhibit 4). Although new products and a strong track record will always be key selling points for any manufacturer, those that invest in developing a more sophisticated understanding of their customers and category prospects, as well as new technologies and profit pools, will ultimately forge stronger relationships. With so much uncertainty in the current environment, helping retailers fill gaps and gain insights on what’s around the corner is invaluable. Diversify: Provide retailers with the partner they need to deliver an omnichannel experience As retailers increasingly serve consumers across multiple channels and touchpoints, they need a partner that can be there with products, services, and insights. Navigating seamlessly between brick-and-mortar stores and mobile apps or e-commerce platforms is not enough. Consumer-goods companies must help their retail partners move beyond the traditional four walls to capture new shopping occasions and build greater shopper loyalty. To set priorities, consumer-goods sales teams must ask themselves several questions: Am I working with my retail partners online and in stores in the best way? Are there other opportunities to collaborate (such as ship-to-home and click-and-collect)? Have I allocated resources in line with the channel strategy (covering product, people, trade, promotion, and advertising spending)? How do I manage channel conflicts among retailers, e-commerce players, and direct-to-consumer channels? Do I have the right channel partners? Have I thought beyond the “usual suspects” to explore new marketplaces and emerging platforms? What is my direct-to-consumer value proposition? Is it responding to new shopper and channel realities? To win in an omnichannel environment, the more data, the better. While a retailer knows what’s happening in its own ecosystem, manufacturers can see how their products are performing across multiple channels and markets. By leveraging pooled data, they can help retailers understand and optimize their omnichannel offering. An even more powerful strategy is using the insights to identify new ways to innovate and engage shoppers. To develop the opportunities, omnichannel expertise must be infused throughout the organization, from the e-commerce team to people working in sales, supply chain, and marketing. Be dynamic: Adopt a more flexible and agile approach to customer management Consumer-goods makers have just begun to explore agile ways of working that enable teams to shift quickly to meet market needs. Our advice: encourage retail partners to join you on the journey. Almost every sales leader believes that the manufacturer–retailer relationship needs to become more agile (Exhibit 5). It’s time to reevaluate the ubiquitous joint business-planning process, aiming to morph it from a static agreement to a working plan that is constantly recalibrated as trends and conditions shift. That means more flexibility around product mix and shelf space, as well as more willingness to iterate, tweak, and learn from mistakes. In our recent survey of 135 global consumer-goods sales leaders, 60 percent said that they believe 2021 planning sessions will continue to be conducted remotely. Another 93 percent believe that virtual communication with retailers is here to stay. One reason may be that including virtual meetings in the mix makes it easier to tap cross-functional experts and foster collaboration based on expertise rather than geography. Imagine how such flexibility could transform interaction with key accounts. In trusted relationships, data flow both ways, enabling all partners to connect the dots and spot trends that they might not recognize on their own. Dynamic partnerships also require more frequency of interaction and alignment on processes, which can strengthen bonds and create more opportunities for innovation. At the same time, less strategically important retail partners could be transitioned to a B2B online portal that enables them to manage their own ordering and planning with light-touch support. That would lead to lower costs for manufacturers and higher satisfaction from retailers that want less friction and more flexibility around managing product flow. Digitize: Deploy digital tools to drive greater efficiencies The COVID-19 pandemic has ushered in the era of contactless commerce. Shutdowns immediately forced companies to prioritize processes and products that minimize the risk of infection. The crisis also accelerated plans to digitize more aspects of order taking, delivery, and customer service. It forced consumer-goods companies to minimize human contact in the production and delivery of their products, just as it forced retail partners to minimize human contact in their distribution facilities and stores. We see three priorities for field-sales forces coming out of the crisis: digitizing route-to-market models for getting their products in front of customers, automating in-store activities, and using advanced analytics to gain deeper insights on shoppers and product performance. As consumer-goods sales teams have turned to telesales and online-ordering platforms in response to the pandemic, many have discovered that retail customers prefer those digital options to in-person calls. Such models are also more efficient for manufacturers, which means telesales, messaging apps, and specialized B2B e-commerce platforms are likely to retain their popularity after the crisis passes. That said, in-person sales activities are often necessary, especially for new retail locations or manufacturers that deliver directly to stores. To minimize the risk of infection in such settings, companies are accelerating efforts to automate or outsource core sales functions. Activities such as restocking or installing signage can often be handled by store employees in return for incremental fees or additional merchandising material. Image-recognition technology can enable companies to automate execution and shelving compliance. Now is the time to review how sales activities can be streamlined, automated, redesigned, outsourced, or eliminated altogether. One leading North American manufacturer was able to reduce its time in stores by 25 percent by automating and outsourcing activities. Another global manufacturer discovered new growth opportunities and savings by using advanced-analytics algorithms to assess the potential value of every outlet. Shaping the postpandemic partnership In an unpredictable and often perilous landscape, consumer-goods companies and retail partners can prove their value by pooling resources. They can also form strategic partnerships that span the entire value chain, from working together on logistics costs to innovating on products and services. In trying to navigate new tools, opportunities, challenges, and trends, manufacturers are finding that their sales teams have become mission critical to success. To win, consumer-goods sales teams will deploy new tools to anticipate and deliver exactly what each customer needs exactly when that customer needs it. They will help retailers develop new micromarkets, personalized marketing solutions, and other opportunities. They are the natural hubs through which manufacturers can synthesize trends, rapidly interpret real-time data, and work with both customers and internal leaders across different functions to shift strategy in real time. In all conditions, through fair weather or foul, leading sales teams can stay focused on driving mutually profitable growth by bringing new value, capabilities, and knowledge to the table. While COVID-19 has created numerous challenges across the consumer-goods industry, it has also brought into focus the power and importance of collaborative retail–manufacturer relationships. Amid lockdowns and panicked buying, companies with recognized brands and resilient supply chains have delivered. They have enabled retailers to pivot to new ways of selling and delivering products, reinforcing the importance of shared intelligence and joint value creation after years of focusing on price. The full impact of the COVID-19 pandemic will take years to play out. But in previous crises, the most resilient companies were those that acted faster than their rivals and were more disciplined in executing to get results. In many ways, the current crisis has reinforced the value of consumer-goods brands, putting them in a better position to leverage their strengths with retail partners. Now is the time for consumer-goods sales leaders and retail executives to sit down (over videoconferences, of course) and lay out a plan for how to work differently together to create more value for their collective organizations. Brandon Brown is a partner in McKinsey’s Dallas office, Lindsay Hirsch is an associate partner in the Houston office, René Schmutzler  is an associate partner in the Hamburg office, Jasper van Wamelen is an associate partner in the New Jersey office, and Matteo Zanin is a senior partner in the Milan office. The authors would like to thank Max Magni and Miguel Saudi for their contributions to this article. This article was edited by Diane Brady, a senior editor in the New York office. Explore a career with us Related articles. 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World Class Business Plans & Financial Models The financial plan should include a revenue model that is organized according to the various products or product categories that will be sold and have detailed cost of goods sold, marketing, and G&A expense assumptions and projections. A consumer product business plan is typically approximately 25 to 35 pages in length and typically range from ... Reinventing the Consumer Goods Value Chain The consumer goods industry is on the brink of profound change. We expect to see companies reinvent every part of the value chain within the next five years. Consumer goods companies are facing cost pressures and high inflation. Enabled by generative AI, reinvention offers the ability to deliver 3-5% improvements in operating margin over the ... Consumer Goods Connected data-driven decisions. In consumer goods, every decision counts. 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