Posts filed under ‘Pricing’

Writing Your Business Plan, Step 6: Marketing Plan (Niche, Strategy, and Forecasting)

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Creative Commons License

This week, we are writing the Marketing portion of the Business Plan in three parts.  On Tuesday we covered research and economics.  Yesterday, we focused on products and services, customer demographics, and competition.  Today, we are going to cover niche, marketing strategy, and sales forecasting.

Onward and upward!

Niche

What is your niche?  Where does your company fit in the market?  What is that sweet spot?  What is the best personal match between you and the customer?  Wendy Robinson, owner of Sacred Moment Weddings in Phoenix, Arizona, writes “Aspire to Plan” a valuable blog for aspiring planners.  She recently wrote that the best niche for a business is one that matches your talent and passion with the customers’ needs and wants.  By having synergy between these  three elements you can create a unique niche for your product or service.

Marketing Strategy

Last month, we discussed marketing strategy and explored the definition of marketing as the process or technique of promoting, selling, and distributing a product or service.  For the marketing strategy section of the business plan, we’ll have three subsections: promotion, sales, and distribution.

Promotion

What is your strategy for promoting your business?  How do you get the word out to customers?  What is the cost of these methods of promotion?  How effective are they at getting you business?

Here are the most common methods of promotion within the wedding industry.  You can elaborate on them in the marketing plan to the extent that they are applicable to your business.

  • paid print advertising
  • paid online advertising
  • blogging on your company website
  • networking within your industry and your community
  • facebook and twitter
  • exhibiting at wedding shows
  • customer referrals
  • vendor referrals

If you want to track their performance and determine how effective they are in yielding returns, I recommend the following two posts:

Sales

In this sub-section discuss your sales approach.  What is the process by which you make a sale?  When the client contacts you, what happens?  When is the sale recognized?  How do your clients make their decisions?  Here are some helpful Secrets of Selling (little unique cost-effective sales tips).

An important part of the sale equation is Pricing. Recently, we discussed why Pricing (and under-pricing) is a common mistake that people make in the wedding industry, particularly when one enters the market.  Think hard about your pricing and how under-pricing your services is not only impacting your business, but the industry on a whole.  It is better to compete on value, quality, and service as opposed to competing on price.  Write about your pricing in your plan.

Distribution

Distribution answers the question: how will you get your product or service to clients? The ability to deliver and to do so efficiently and effectively is the cornerstone of marketing your product.

Here are some questions to think about:

  • How do you distribute your product or service: online, mail-order, appointment-only, retail?
  • Where is the competition located?
  • What time frames are relevant to this distribution?
  • What personnel (if any) are required for this distribution?
  • What is the transaction process involved?
  • What sort of training of employees will be required?
  • What sort of payment is accepted?

Sales Forecast

We are at the end of the marketing plan – YAY!  The last piece we need is the sales forecast to pull of the pieces together.  A forecast is a plan that shows your future sales expectations.  You’ll need to create a month by month plan.  Start with year 1 and if you feel ready flesh it out for 2, 3, 4, or 5 years.  I find it helpful to incorporate my promotional activities in my sales forecast.  My plan looks something like this:

salesforecast

(If you need an Excel refresher/intro class, check out our classes.)

Here are some tips from SCORE:

  • Base the forecast on your historical sales, the marketing strategies that you have just described, your market research, and industry data, if available.
  • You may want to do two forecasts: 1) a “best guess,” which is what you really expect, and 2) a “worst case” low estimate that you are confident you can reach no matter what happens.
  • Remember to keep notes on your research and your assumptions as you build this sales forecast and all subsequent spreadsheets in the plan.
  • Relate the forecast to your sales history, explaining the major differences between past and projected sales. (This is critical if you are going to present it to funding sources.)

Next Step

YAY!  We’ve unearthed the marketing plan!  We’ll see you here Monday for a continuation of business plan writing: the operational plan.  Tomorrow, we’ll feature another great industry insider with her sage wedding business advice!

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May 14, 2009 at 6:20 am 2 comments

3 Common Mistakes that Wedding Pros Make

Creative Commons License

Creative Commons License

There are three common mistakes that wedding professionals make in their businesses.  These are mistakes that if not corrected will continue to plague your ability to succeed.  We’ll be discussing these mistakes this week:

  • Under-pricing your services
  • Paying for advertising that gives little or no returns
  • Not setting boundaries for balance between work and personal life

Let’s get into our first mistake…

The PRICING problem

Many entrepreneurs open their business with this thought:  “I’ll set my pricing low in order to compete in the industry and raise my pricing once I’m established.”  This can backfire in so many ways:

  • Clientele will become accustomed to your pricing and will come to expect it
  • People will begin to refer you as the “budget” vendor and you will be pigeon-holed
  • Potential clientele may not want to do business with you because they may see you as providing a less-than-valuable service (often a more expensive item is perceived to be of higher value; a less expensive item can be perceived as cheap or of poor value)
  • You won’t be able to turn a reasonable profit (eg: if your business expenses are greater than what you are charging, you will be operating at a loss)
  • It devalues the services of all of those in your profession

In setting your pricing, you should ask yourself the following questions:

  • How can I provide exclusivity of certain products or services?
    This goes hand-in-hand with finding a market niche.  Find something that you are unique at and build on marketing that as something special.  Your pricing should reflect the exclusivity of what you offer.
  • How do I add value to my client?
    This is very important in understanding how you will service your client and add value to their wedding.  The value proposition gives your customer an understanding of the benefit you are exchanging for the price you have set on the product or service.
  • What does my brand say about my product and my level of service?
    Branding is extremely important in marketing a product or service that is of high-value and worth.  A brand that is synonymous with service and value is a brand is associated with the higher cost.

A few more thoughts…

Sean Low, President of Preston Bailey Designs, Inc. recently wrote a great post on pricing and gave some very strong recommendations on pricing strategies for creative types.  I recommend reading the post here.

A small business seminar I once attended mentioned that most small business owners under-price their goods and services.  Their recommendation was this:

price what you think you should charge,
and then add 10-20% for what people would actually pay.

The thought behind this is that people are usually willing to pay more for your services than you give yourself credit.  Don’t undersell your skills, value, products, and services.  You are worth it!

Tomorrow… we’ll be talking about advertising… and how to make sure it’s working for you!

April 13, 2009 at 6:00 am 5 comments


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