This is the part of your business plan where you will describe the specific products or services you’re going to offer. You’ll fully explain the concept for your business, along with all aspects of purchasing, manufacturing, packaging, and distribution. You’ll go over suppliers, costs, and how what you’re offering fits into the current market and stacks up against your competitors.
How do you write the Products and Services section of a business plan?
While your product may be technical, don’t get caught up in complicated industry jargon. Explain and describe what you’re offering in layman’s terms, so someone who isn’t familiar with your business will understand and be excited about it. It may be necessary to give some basic background if this is an area or industry people are unfamiliar with.
While you write up the Products and Services section of your business plan, keep your reader in mind. Things that you might take for granted or know inside-out might not be common knowledge to potential lenders or investors. As you write, avoid being too technical, assuming too much knowledge from your readers, and using buzzwords.
You don’t want to come off as condescending, but you do want to make sure everyone understands what you’re talking about. To see if you’ve succeeded, have some trusted people who aren’t in your industry proof-read this section for you, and ask them to explain your product or service in their own words, along with the benefits to using them.
Here are the points you want to write up in the Products and Services section of your business plan:
The Product or Service Description
What is your product or service, and how does it work? How does it benefit customers? How do you make it or how will you get it made?
What makes this product or service unique or better than what’s already available in the market? Why would someone choose to buy your product or do business with you over someone else?
Have you had the product tested or certified? Gotten approvals from industry experts? Did you trademark, copyright, or patent your product? These can add substance and credibility, so be sure to mention them.
Where are you currently with this product or service? Is it in the idea stage or do you have a prototype? Have you produced some and are looking to expand? Have you started offering this service already or are you still in the planning stages?
How much will you charge for the products or services you’re offering? Where does this fit in with what’s currently available?
Sales and Distribution Strategy
How will you sell it? Will you market it online or in retail stores? Have you lined up any vendors? How will you distribute it or deliver the service you’re providing?
How will you fill orders or deliver the service? Will you manufacture items yourself or outsource to someone else? Who will handle distribution, and how?
Will you need any special equipment or technology to provide your product or service?
Do you envision future products or services as an extension of the business once it’s successfully launched?
Photos or Brochures
It’s beneficial to include a visual representation of your offering. Photos or brochures would generally get put in the plan’s appendix, but you would refer to them in this section.
How Do You Stand Out?
Perhaps most importantly, emphasize how and why you are competitive. How do you stand out, and why does this business have such a terrific chance at succeeding? In talking about your product or service, always try to answer why a client would want it. How will your offering make your customers’ lives better or more profitable? What need are you fulfilling or what problem are you solving?
To sum up, the product and services section of your business plan gives the reader a clear understanding of why you’re in business, what you sell, how you compete with what’s already available, or how you fill a niche that no one else is meeting.