If you have started a business (or intend to do so in the future), you have likely determined it will be important to have a business plan moving forward. It is equally important to have a sound marketing plan. Creating plans that work with one another is crucial to your success. Doing so will enable your company to stay organized and will help you take measurable steps to achieve whatever level of accomplishment you are aiming for. So, what makes the difference between a marketing plan and a business plan, and how do they both benefit you?
A business plan is, basically, an over-arching snapshot of your business. It will succinctly map out what your business is all about and what steps you will need to take, to grow it successfully. Within a business plan, you will devote some time and energy into determining your overall strategy, finding your target market, explaining your services and products in detail, outlining your operations, determining a realistic financial plan and more. A business plan can be beneficial for your own use to keep you on track, and to help potential investors understand the ins and outs of your company. Developing a business plan can be a lengthy process but is typically well worth the time that goes into creating it.
Startup companies will use business plans to get off the ground and persuade outside investors to work with them. The elements of a solid business plan are straightforward and easy to learn, but very important to maintain. A business plan’s length can vary depending on the type of business you run. All key information you include in a business plan should fit into a document that is anywhere from 15 to 20 pages long. All business plans have these same following elements:
In this section the company is outlined and the mission statement is introduced. This section also includes information regarding leadership, workers, daily operations, and the company’s location.
Products and Services
The products and services your company will offer can be outlined in this section. Pricing, product lifespan, and consumer benefits can also be included. If other important factors need to be mentioned, such as the processes of production and manufacturing, any patents your company have claimed, and proprietary technology, then those factors should be recorded in this section.
Along with understanding your target market, your company should understand the industry you reside in. By undergoing a thorough market analysis, you can outline exactly who your competitors are in your industry and how much influence they currently have. The strengths and weaknesses of a competitor will be highlighted in this section. A consumer’s demand for products and services is always changing, and the expected demand for what a company is selling will be plainly described in this section. Will it be easy or hard for your company to grab the market share from the existing competitors? That is the main question this section will answer.
Having a marketing strategy section will seamlessly dovetail into your marketing plan document. It will spell out what needs to be done when you begin a marketing campaign. Attracting and maintaining a customer base is at the heart of this section, and how your company intends to reach out to the consumer must be fleshed out. Clear distribution channels should be shared in this section, to give your team an idea of how your marketing campaign is getting funneled out to customers and investors.
Having the support of investors is critical for many businesses, and the strength of your business plan will reside in the financial planning section. This is where you utilize accountants and the most economically savvy members of your team to provide numbers and statistics. Businesses that are already established will need to provide financial information such as the income statement, balance sheet, statement of cash flows, statement of comprehensive income, and statement of stockholders’ equity. If you are a new business, prepare documents that will discuss targets and estimates for the first few years of operation and any potential investors you desire to work with.
What kind of budget does your company have? A business plan isn’t complete without an established budget. Costs that relate to staffing, development, manufacturing, marketing, or anything miscellaneous will make up your budget. Whether your budget is loose or tight, this figure will be a helpful stepping stone in guiding your company to its desired goals.
Within the framework of the business plan, you will find a section dedicated to the marketing plan. A marketing plan can also be split out into its own document or plan, rather than just being one section of the business plan. We highly recommend doing this (for reasons we will dive into later). Marketing plans focus solely on determining how to get your service(s) and/or product(s) into the hands of the consumers that will benefit the most from them. Within this portion of your business plan is where you will work on determining who those consumers are as well as deciding on your marketing goals and strategies, researching your competition in the market and determining what types of marketing channels you will use to educate your audience about the thing(s) you are offering. In other words, how will your company stand out from your competitors and grab your audiences attention?
How it Compares to a Business Plan
Compared to a business plan, a marketing plan is a more comprehensive document that heavily outlines the marketing and advertising efforts of a company. Marketing plans are best used as internal documents, and not to be shared with the general public. The marketing plan document should change as your business experiences growth, and as new marketing trends emerge. You will have an easier time finding customers and clients if you know who they are and where they are located.
Marketing is about having the knowledge of what your product or service is and how it can help a target market. Whatever your marketing messages are, they need to speak clearly and effectively to your target market. A marketing plan has the following elements:
Marketing Objectives of the Business
Your company should be specific about its goals. This can include increasing the email list by a certain number of subscribers over the course of a year, or acquiring a specific number of new clients. One way to measure the effectiveness of your marketing plan is to have a quantifiable goal. The objectives you make for your company should be relate to “SMART,” which is short for Specific, Measurable, Attainable, Relevant, and Time-bound.
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Current Business Marketing Positioning
When it comes to the marketing positioning of your business, there should be an analysis of the current state of your company prepared. What is currently working with your marketing strategy? What do you find challenging about generating new customers and clients? What are the potential issues you might encounter throughout the year, such as moving your company’s headquarters or new laws that could negatively effect how you do business? Doing a SWOT analysis will help with this step of the marketing plan.
This is a section dedicated to research on current market trends, customer needs and demands, sales volumes of the industry, and the expected direction the industry will take.
Business Target Market Outline
This section is where you define the target market demographics of your business. Whatever your target market is, let that guide you in determining what marketing strategies you will implement. Where does your market socialize? How can you convince that market to check out your business? Does the majority of your target market use a specific social media platform? For example, if most of your market uses Facebook, then consider launching a Facebook fan page or group for your business. This part of the marketing plan will be easier to execute if members of your team have experience in social media marketing.
Learning how to create a marketing persona will help significantly with this aspect of creating your marketing plan. Here’s a related blog post we’d suggest reading: How Do You Create a Perfect Buyer Persona?
Any actions that relate to marketing goals, that were scheduled for a specific period of time, should be listed in this section. Have there been any sudden changes to the industry since identifying a desired goal? Will new actions need to be taken as a result of these changes?
Key Performance Indicators (KPI)
This is an integral part of the data that your company will need to explain how you are progressing (and sometimes not progressing) towards your established marketing goals. A key performance indicator is basically a measuring stick that can illustrate the efficiency of a company when it achieves their objectives. KPIs are often used by companies in their marketing campaigns to determine whether or not they are effectively investing their budget.
Customers are not always influenced by only one factor when they purchase products. It takes a combination of factors to entice them to buy. Product, price, promotion, and place make up the 4 P’s of marketing. In this section, outline what your product is and what it does. Provide detail on how much the product will cost, along with where and how you will promote it.
What does the competition look like? Which organizations will be directly competing against you in the marketing industry? The strategies of your competitors should be identified in this section. You should also attach proposed ways to counter your competitors and gain market share.
Forming a strategy is simple. Executing that strategy can be very challenging. How will the various strategies work with your marketing plan to accomplish the desired goals? Promotional strategies, advertising, and other marketing tools your company can use should be highlighted in this section. There is often confusion regarding the difference between goals, strategies and tactics. Consider reading this blog post to come up with appropriate strategies: The Difference Between Marketing Goals, Strategies and Tactics
Your company’s allocation of financial resources to marketing activities should be outlined in detail. Along with the general budget you have for your business plan, you should also have a specific marketing budget kept in mind. Without identifying your marketing budget, it will be impossible to properly carry out marketing activities. Here’s another blog post to check out: How to Set a Marketing Budget for Your Business
Mechanism for Monitoring and Performance
The marketing tools you put in place need to be fruitful. If they aren’t, then these tools should be revised based on the state of your company, whether it is past, current or the expected future state. A plan should be implemented for monitoring the basic daily functions of your company and how well all members of the team are performing. This plan should also reflect how the industry and the overall business environment are trending. You can’t just monitor your own company and not get a feel for what the industry you work in is currently doing.
Different Purposes for the Same Objectives
Now that you know what goes into a business plan and a marketing plan, it is important to know the specific purposes of both plans and how they serve the same objectives your company is attempting to achieve. These plans cover different periods of time and they don’t have identical reasons for being created. Oftentimes business owners see the need to create both plans to secure their financing. Banks and investors will ask for both plans before they agree to invest in your company or send any loan money.
The Purpose of a Business Plan
Your decision-making tool is your business plan. The goals that you have for your business and the target market you intend to reach dictate the content and formats used in this plan. For example, if you run a non-profit organization, your business plan could discuss how your organization’s mission works with its stated objectives. You craft this plan to ask for loans to start a new company or expand one that already exists. A business plan basically prepares you for the future and gives you a better idea of where your company currently stands and what types of resources and initiatives you need to meet your goals.
The Purpose of a Marketing Plan
Your marketing plan is the blueprint that will give you proper instructions on how to achieve your business objectives. This is a key reference piece that will need to be frequently assessed. Should this plan ever become irrelevant in any way, then it needs to be updated immediately. This plan usually assists the growth of your business by defining the appropriate marketing strategies. It also integrates business functions to consistently operate. These functions include marketing, sales, production, finance, and human resources.
How A Marketing Plan and a Business Plan Work Together
While you are unlikely to create a business plan without including a marketing plan, some business owners do choose to decide on their marketing without diving into an entire business plan. While there are times when this might be the best idea for your business (and only you will be able to determine whether or not that is true for you), having both can be extremely helpful, being that one really compliments the other. Some of the very real benefits you might find of having both plans available to you are:
Your business plan will help you to identify the goals of your company and offer you a path to follow. The marketing plan will then give you tangible steps to take that will help you to achieve those goals. Having a business plan without a marketing plan is like having a ladder without any rungs. You will have all the ideas you need without any clear ways as to how to implement them. Using both plans together will help to increase your revenue as you consistently track your progress and make any changes you deem necessary. If the overall goals of the business change, the marketing plan can also shift to keep sales high.
While your business plan will include your initial projections based on your previous research, your marketing plan will give you the opportunity to more accurately track how well you align with those projections. Changes can then be made to better support or clarify your initial estimates.
Again, your business plan will outline both the short and long-term goals you have for your company. Your marketing plan will lay out the small steps needed on a daily basis that will help you to consistently meet those goals at a reasonable pace (rather than trying to do everything at once or dragging your feet and never getting any traction).
Surpassing Your Competition
Your business plan will help you to understand your competition and give you a chance to really educate yourself on what strategies have and have not been working for them. This will enable you to focus on putting your resources into marketing channels that will yield the best benefits.
Your business plan will propose what strategies you will implement to achieve your business goals, while your marketing plan will help you to laser focus those strategies. Having the business plan accessible will ensure that your marketing strategies stay aligned with your greater vision.
A Functional Master Plan
Utilizing these two plans in conjunction with one another regularly will help you create a master plan that will continually guide the workings of your company. This last piece is so important because it foreshadows a larger truth. You WILL have to maintain both of these plans if you want them to continue to work together for the greater good of your business.
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Next Best Steps
So, what exactly does maintaining these two plans entail? As your business grows and changes, so will its needs, making it extremely important that you review these plans on a regular basis.
A business plan should be reviewed once per year, giving you an opportunity to notice any areas where you are not meeting your goals or where you may be out of alignment with your bigger vision. Are you operating to the standards and guidelines that you initially intended? If not, do you need to make changes in the business plan or in the way your business is operating?
The marketing plan, on the other hand, should be reviewed each quarter. This is largely because the economy is constantly shifting and changing and, therefore, you may need to quickly adapt your marketing techniques to whatever new situation arises. Additionally, checking this plan regularly allows you to track which marketing modalities are working the best and worst for your business at any given time. Through continual monitoring, you can begin to identify patterns and adapt or plan your future marketing around those patterns.
As you review these plans, you can make whatever changes need to be made to one or both, keeping them constantly working for you.
A Perfect Match
Overall, businesses that understand the differences between a marketing plan and a business plan, and how they can work seamlessly together are likely to have greater success as they move toward achieving their goals. If you don’t know how to create a business or marketing plan, there are several reliable resources and templates available online! And if you need assistance with the planning or execution of your marketing plan, let us know. You can connect with us via the contact form below!