Dear Friend,
Welcome to the concluding part of “Complete Sample Business Plan Format.” Please if you are just joining us, i will recommend you go back to the archive to read the part 1 & 2 of this write up. In the previous article, we stopped at Positioning of products/services, today we will proceed with:
SALES AND MARKETING
MARKETING STRATEGY
Our basic marketing strategy is to work with our retailers on a one-to-one basis to develop unique marketing programs for them. Especially because we want to develop close working relationships with our customers we want to establish accounts in as personable a way as possible too. Hence we will overwhelmingly emphasis in-person sales calls to build accounts.
We will closely integrate all of our marketing and sales efforts to project a consistent image of our company and a consistent positioning of our products or services. We will build this image around our name “Rainbow Kites, Inc.” and will emphasize to retailers to wonderful color and excitement that a well-done display of top quality kites can add to their store.
While we will attend some trade shows and produce a color catalog, these marketing initiatives are seen as supporting, not competing with our independent sales representatives.
SALES TACTICS
Our primary sales method is face-to-face selling by independent reps A particularly important aspect of our sales process is that we will fly all of our independent reps to our West Coast office to extensively train them in how product line, in building displays, and in building a bigger kite business for our customers.
We will insist that our independent reps represent only non-competing, non-kite lines. We will stay in close phone contact with our reps in addition to having sales meetings with them at least four times per year, usually at major trade shows.
We will pay our reps on a “ledger” basis, giving them commission on all sales in their exclusive territories even if the account phoned the order in directly to our main office.
ADVERTISING
We will have a small advertising budget, devoted exclusively to trade publications designed to reach buyers and owners of upscale independent stores. The objective of our trade advertising will be limited to reinforcing the image of our company and the excitement of stocking upscale kites. All ads will be four-color and between 1/4 and 1/8 page in size. Each ad will prominently feature our logo and a bright, colorful, changing display of upscale kites.
We will also work with our retailers to obtain co-op advertising funds for their own local advertising. Currently very little co-op money is being provided by kite manufacturers, but we believe that we can make more funds available especially if we work with a US ad agency to develop effective advertising layouts and copy that our retailers could use.
PUBLICITY
Our publicity effort will be three fold. For one we will send news releases to trade magazines to try to get product or company feature coverage in front of the eyes of retailers. Second we will product a few generic press releases about kites that our retailers can use to try to obtain publicity coverage for their stores in local publications. Third we shall have a quarterly newsletter for retailers that we are currently serving or hope to be serving. We anticipate sending 1,000 copies of the news release out our first year and gradually increasing to 2,000 copies by our third year. In the newsletter we will highlight not just our products, but also display ideas and success stories of stores who increased their kite sales.
TRADE SHOWS, ET. AL.
We will have a small booth or table top display at four national conventions each year, including the National Toy Show in February in New York, The Toy and Hobby Show in April in Toronto, The International Gift Show in Las Vegas and the West Coast Toy and Gift Fair in May. We will emphasize not just our products but the custom-built displays that we are producing for retailers.
We will also provide limited funds for display space for our independent reps at regional trade shows that they attend. Typically we will pay for one table top display.
OPERATIONS
KEY PERSONNEL
The Company will be managed by the two founding partners, whose individual areas of expertise cover many of the functional aspects of the business. Tom Anderson will serve as the President of the Company, and will be responsible for Product Selection and Sales & Marketing. Nancy Anderson will be the Vice President, in charge of Administration. She will be responsible for customer service, accounting, shipping and the general administration of the business.
Tom Anderson has a long history of experience in the Toy Business and specifically in Kites. For several years he grew the Kite business at Ocean Gifts and Toys in Los Angeles into one of the largest and most profitable exciting in the country. Tom has a many industry contacts and an in-depth knowledge of the kite and toy business. See Tom’s resume for further details.
Nancy Anderson directed a staff of twelve as the manager of customer service for LA Selections, a major local jobber of novelty goods. She has also held a wide variety of other inside business and operations positions. See Nancy’s resume for further details.
ORGANIZATIONAL STRUCTURE
The organizational structure is very simple. The independent commissioned reps will report to Tom Anderson. And support staff at the office and warehouse will report to Nancy. Because Tom will frequently go on buying trips to the Far East or be on the road selling, Nancy will be able to support any day-to-day needs that the reps may have. However, even when Tom is on the road he will be in constant touch by computer or phone.
PRODUCT/SERVICE DELIVERY
In order to deliver high quality, personalized service we will carefully select all employees–especially sales reps and customer service representatives who deal directly with customers. Tom is currently interviewing candidates for sales reps. We will carefully review references not from past employers or manufacturers but from retailers whom these sales reps have served. We will also make sure that each employee understands our way of delivering quality service to each customer. We will have immediate back-up support available by phone from our office for more difficult service issues. And we will give employees enough latitude so that they can respond immediately to almost all customer requests or complaints, which in this industry usually means granting prompt credit for damaged merchandise.
CUSTOMER SERVICE/SUPPORT
We intend to prioritize customer service and make it a key component of our marketing programs. We believe that providing our customers with what they want, when and how they want it, is the key to repeat business and to word-of-mouth advertising. Not only will we train our employees to deliver excellent service, we will give them the flexibility to respond creatively to client requests. In addition, we will continually monitor our clients’ level of satisfaction with our service through surveys and other convenient feedback opportunities.
Initially we expect to have few enough accounts so that Nancy and one additional employee can handle all customer service issues. Having just one employee to train should help insure that Nancy can help make the new hire a top performer. As our business grows we intend to hire additional customer service people one at a time and pay a premium over market labor rates to attract and retain quality help.
Shipping problems are a huge issue with the firms that we compete with largely because they insist on using surface shipping methods to keep their costs down to charge low prices to keep their mass merchant accounts happy.
We intend to use air freight to import our kites from the Far East. This will add to our costs slightly. But because all of our products are more expensive it makes more sense for us. It will also allow us to have much thinner inventories in our warehouse without risking stocking out.
Our relatively high cost of shipping has put us at a competitive disadvantage. The current cost of shipping for an average order is $…, which we feel can be reduced by …%. We intend to achieve this cost reduction by putting our overall shipping requirements out to bid.
FACILITIES
We plan to lease approximately 10,000 square feet of space as soon as our financing is finalized. We have a specific property in mind and have a tentative agreement with the landlord’s agent. This building located near LAX airport has 8,500 feet of warehouse space and a small 850 square foot office. The lease rate is $6.35 per foot triple net for a 2 year lease with the option for two additional years at an increase of 5.9% per year.
The building is located in a busy industrial neighborhood, but because we do not intend to have customers visit us we have decided we are better off with a lower-rent location, than a location that could double as a fancy showroom.
Wow !!! At last, we have concluded this article, i hope the issue of how to write a business plan has been trashed out. I believe with this article as a guide, you can comfortably write a business plan.
I really appreciate your patience, it is not easy to patiently wait for a series. All the same, i know your knowledge base has increased. Till i come your way with another exciting business development strategy. Remain Strong.
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