March 2004

Sound Marketing Strategies Make Good Business Sense--Elements of a Business Plan

by Sharon Williams

This column's main area of focus is marketing. However, without a good business plan, a sound marketing strategy cannot be developed - and if a good strategy is created - it will eventually falter because it does not have the correct foundation, a written and thoroughly researched business plan as its' anchor. Therefore, this edition's marketing strategies focus is creating the foundation -- the essential elements of a business plan.

Except from Marketing Your VA Practice without Breaking the Bank . . .

A written business plan is the benchmark to evaluate every phase of a business. A virtual assistant should consider if the plan would help achieve her goals and objectives. Are the goals and objectives economically feasible? Will achieving them provide adequate financial and emotional return?

At a VA conference I asked two questions. The first, how many in the audience has a business plan? About 15 attendees raised their hands. Then I asked how many have a written business plan? The number dropped tremendously. The balance of the approximately 60 participants had not taken the fundamental step of creating one. Some had a general plan of action, but it was not a written plan of action. They did not have written goals and objectives.

I believe VAs should have written benchmarks to assess their goals and objectives. Are they on track with their original intentions? Has a shift occurred, naturally or by happenstance? How can they tell? Can they decide that if they were in a business they thought would prosper? Has it? Can they assess their strengths and weakness and work to improve each?

If a virtual assistant seeks funding, the prospective financier normally uses the written business plan as a tool to evaluate the feasibility and viability of the business. However, and more important, a written business plan provides a road map for your business and makes the business owner focus.

While virtual assistants may recognize the importance of a written business plan, they have not often created it. Some say, "I do not have time to draft one and my business is growing." They ask, "Why do I need a written business plan? I know what I need to do to promote my business. I'm creating a website and distributing business cards. I know I am going to get great response because I know how to type. I have several years' experience as an office worker. I have a computer, and want to work from home."

It takes more than just knowing how to type to run a successful and profitable VA practice. The first step is putting your plan in writing. Developing and starting a sound strategy is a fundamental, important step in business planning.

Again, it is about the details. What are the parts of a business plan? We can divide the body of the business plan into four distinct sections: 1) the description of the business, 2) the marketing plan, 3) the financial management plan, and 4) the management plan. Addenda to the business plan should include the executive summary, supporting documents and financial projections.

This brief overview provides the basic information necessary to prepare a business plan. I strongly recommend that VAs who haven't yet written one do so. It doesn't have to be long, but it should cover the fundamental parts described above. If you intend to obtain a start-up loan or want to purchase equipment, lenders require a written business plan. It is also useful when seeking funding from a financier or relative.

The Business

In this section, provide a detailed description of your business. An excellent question to ask is: "What business am I in?" In answering this question include your products, market and services, and a thorough description of what makes your business unique. The description of your business should clearly identify goals and objectives and clarify who you are and, why you want to be in business. Remember, however, that as you develop your business plan, you may have to modify or revise your initial questions and responses.
Products and Services

Try to describe the benefits of your goods and services from your customers' perspectives. Successful business owners know or at least have an idea of what their customers want or expect from them. This type of anticipation can be helpful in building customer satisfaction and loyalty. It is a good strategy for beating the competition or retaining your competitiveness.

The Marketing Plan

Marketing plays a vital role in a successful business venture. How well you market your business, along with a few other considerations, will ultimately determine your degree of success. The key element of a successful marketing plan is to know your customers - their likes, dislikes, expectations. By identifying these factors, you can develop a marketing strategy that allows you to stimulate and then fulfill their needs. You should include your marketing plan in your business plan.

Competition

Competition is a way of life. We compete for jobs, promotions, scholarships to institutes of higher learning, in sports, and in almost every aspect of our lives. Nations compete for the consumer in the global marketplace, as do individual business owners. Advances in technology can send the profit margins of a successful business into a tailspin causing them to plummet overnight or within a few hours. When considering these and other factors, we can conclude that business is a highly competitive, volatile arena. Because of this volatility and competitiveness, knowing your competitors is important.

Pricing and Sales

Your pricing strategy is another marketing technique you can use to improve your overall competitiveness. Get a feel for the pricing strategy your competitors are using. Determine if your prices are in line with competitors in your market area and if they are in line with industry and geographic averages.

The keys to success are to have a well-planned strategy, to establish your policies and to constantly monitor prices and operating costs to ensure profits. It is a good policy to keep abreast of the changes in the marketplace.

Advertising and Public Relations

How you advertise and promote your services may make or break your business. Having a good product or service and not advertising and promoting it is like not having a business at all. Many business owners operate under the mistaken idea that the business will self-promote, and they channel money that should be for advertising and promotions to other areas of the business. Advertising and promotions, however, are the lifelines of a business. Without them the business will eventually fail.

Devise a plan that uses advertising and networking as a means to promote your business. Develop short, descriptive copy (text material) that clearly identifies your services and prices. Use catchy phrases to arouse the interest of your readers, listeners or viewers. Make sure the advertisements you create are consistent with the image you are trying to project. Remember, devoting care and attention to your marketing program brings more success to your business.

The Management Plan

Managing a business requires more than just the desire to be your own boss. It demands dedication, persistence, the ability to "make a decision", the ability to manage employees (if you have any) and finances. Your management plan, along with your marketing and financial management plans, sets the foundation for, and helps the success of, your business.

The Financial Management Plan

Sound financial management is one of the best ways for your business to remain profitable and solvent. How well you manage the finances of your business is the cornerstone of every successful business venture. Each year, thousands of potentially successful businesses fail because of poor financial management. As a business owner, you will need to identify and set up policies that will ensure that you will meet your financial obligations.

To effectively manage your finances, plan a sound, realistic budget by determining the actual amount of money needed to open your business (startup costs) and the amount needed to keep it open (operating costs). The first step to building a sound financial plan is to devise a startup budget. Your startup budget will usually include such one time only costs like major equipment, down payments, etc.

An operating budget is prepared when you are ready to open for business. It will reflect your priorities, concerning how you spend your money. Also, it describes the expenses you will incur and how you will meet those expenses. Your operating budget also should include money to cover the first three to six months of operation. Realistically, virtual assistant practices do not require such a large infusion of operational funding because of limited overhead. However, every virtual assistant should have a financial contingency plan available for slow periods, equipment breakdowns, etc.

In a nutshell,

Decide where you want your business to go, create the road map and checkpoints, and mark them as you achieve them.

1. Evaluate what you have done in the past, has it worked, and use that as the benchmark to plan future marketing strategies.

2. If you have no experience or clients, do industry-based research to evaluate your overall strategy and what you have to offer.

3. Record your results and periodically review your campaign to see if it's providing the results you seek. Are you prospering financially from your efforts?

4. Make changes to the plan as you progress. Keep what works and throw away what does not.

If anyone has a question regarding the tenets of marketing or a marketing strategy to share, contact me at: marketing@theVirtualAlliance.com. Future articles will investigate the components of a good marketing strategy.

About the Author

Sharon Williams is a Master Virtual Assistant and president of The 24 Hour Secretary. Subscribe to her free monthly e-zine about virtual assisting support that creates freedom, at www.The24HourSecretary.com. She is the author of Marketing Your VA Practice: It's Not About Money, It's About Having the Right Strategy, offering business-marketing strategies that won't break the bank. For more information about the VA industry, business support, or the book, send email to: sharon@The24HourSecretary.com.