Business Plan - Building the marketing phase of your home business plan

No section of your business plan is unimportant, but a sound marketing plan can make the difference between a viable business and a slow death as you are slowly starved out due to insufficient cash flow.

Your two most important marketing decisions.

Businesses move forward on one of two paths. Either by deciding on a product or service, and determining what target market wants or needs it, or by picking a target market and finding an unfilled want or need within that target and then providing it. It's pretty easy to see that these paths are really two sides of the same coin. In either case, you need to clearly know what you offer, and clearly be able to identify who wants, or needs, what you are offering.

Most products and services fit neatly into a buying pattern, defined by the demographics of a target market. Skate boards, for instance, are purchased by one particular age group more than others. So are life insurance, Buicks, and baby clothes. Demographic characteristics that play a role in defining a target market include age, gender, education, income levels, and cultural and religious backgrounds.

A clearly defined target market makes market planning a snap. The demographic profile of a radio station's listeners, or a magazine's readers, tells you immediately whether it is a good place to invest your marketing dollars. Events attended by a group that matches your target market demographics are a good bet to sponsor or attend. Organizations that attract your target market should also attract your volunteer or networking activities.

Setting clear objectives for your marketing activity is also very important. A marketing goal should be specific, have a clearly defined timeframe for its accomplishment, and include a way to measure success.

As an example, let's say you intend to increase sales of service contracts along with a product by 15% over last year. You plan on doing this by promoting the benefits of service contracts with mailouts to your customer list. Your marketing objective might look like this: Increase Service contract sales (your specific objective) by 15% over service last year's sales (a measure of success), through a mailout of promotional material to our customer list by March 30 (a specific deadline date).

Mistakes People Make Planning their Marketing Strategy

1. Unclear about their product, or service. Hard to believe? I've seen it over and over again. You need to know what you are selling and why people are buying, or not buying. It's not as easy as it looks on the surface, either. If you are running a home cleaning service, what are your customers buying? A clean home? No - they are buying time. Time to spend doing what they want rather than being tied down to house work. If you have the money you can buy time. If you don't have the disposable income, you spend your time cleaning your own house.

2. Thinking people buy for the seller's reasons. Again, hard to believe. People buy for their own reasons. You may think the quality of your service is most important and stress it strongly when your customer is looking for the lowest price. You may think price is the most important issue when your customer is looking for convenience and a speedy completion or delivery. Never assume you know why people are buying - research it at the market level, ask at the sales level.

3. Thinking everyone is their customer, or being afraid to target a specific market. It may seem counter-intuitive, but the road to success is paved with tight targeting and finely tuning your product to a clearly defined target market. The road to struggle and uncertainty is paved with trying to have something for everyone. Everyone is not your customer. If you believe you have one of those products or services that everyone wants - you are laboring under a common, and costly, home business misconception.

4. Ineffective goals setting. Remember that to be effective, goals must be specific, include a way to measure success and have a definite deadline for their accomplishment.

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