Your Product/Service

Writing and Presenting a Business Plan Chapter 2 Your Product/Service Writing and Presenting a Business Plan Chapter 2

Suggested Length: 1-3 pages Objective To describe the product and related services, special features, benefits, and future development plans

What Is the Purpose of the Product/Service? Does the product solve a problem or address an opportunity? Is it a luxury item/service or a necessary item/service? How does the product/service achieve these objectives?

What are its Unique Features (cost, design, quality, capabilities, etc What is its technological life? What is its susceptibility to obsolescence? To change in style or fashion? How does it compare with the state of the art?

In What Stage of Development is the Product?/Service Full Manufacturing/ Production (at what level?) Engineering Prototype Production Prototype Idea Model Working Prototype Small Production Runs

How Will the Product be Produced? Is it capital-intensive? Is it labor-intensive? Is it material- intensive? Will all or some of the production be subcontracted? Is this an end-use item or a component of another product? Does your company’s survival depend on someone else? What new products (spin-offs) do you plan to develop to meet changing market needs, in this industry or others?

Are there Liabilities This Product and/or Service May Pose? What are the insurance requirements? What are the regulatory or approval requirements from government agencies or other industry participants? Is the product/service dependent on any natural, industry, or market life cycle? What cycle? Introduction Growth Maturity

How Does This Product Compare to Similar Products of Competitors? What kind of engineering studies, testing, and evaluation has the product undergone? If more than one product is involved, how will the manufacture and/or promotion of one affect the other? If equipment is involved, what is its reliability factor? What is its downtime? What are the related services you will provide? How will they enhance and increase the profitability of the venture?

Subheadings to Include Description of Product/Service Description of the Facilities Proprietary Features Future Development Plans Product Liability

The following is a suggested sequence What to Accomplish In layman’s language, explain your product and related services, what they do (that’s special or different), and whom they serve. Briefly highlight future plans for improvements or for introducing new products/services. The following is a suggested sequence of presentation

Description of Product/Service Describe exactly what your product/service is and for what it was designed. Discuss how it works, special features, capabilities, and resulting benefits (economic, social, environmental, leisure, etc.). If more than one service or product line is involved, discuss them and how they function together and/or affect each other. State what stage of development the product/service is in.

Description of the Facilities If the facilities are a focus and part of the product or service (such as a hotel would be), describe them in this section. Describe the facilities and why they are unique or better, i.e., none other like them, more attractive, better proximity to customer base, offer more, etc. Discuss location and why it is advantageous. State what percentage of the facilities is used for revenue-producing services, operations, storage, etc.

Proprietary Features Discuss any patents, copyrights, trademarks, service marks, or other legally binding agreements that protect your product or service. State if a patent is pending. Overall, discuss how you intend to protect the integrity, confidentiality, and competitive nature of your product and services. Briefly mention any regulatory or approval requirements your product or service must meet. State who has jurisdiction and how you will satisfy these requirements.

Future Development Plans Describe the nature and application of future development plans. Discuss whether these plans are improvements, an extension of the current product/service line, or plans for other products/services. State whether these plans will address your current market or other markets. Discuss the time frames for these plans. Justify why these plans are important by showing increased or newly generated profits.

Product Liability Discuss the liability and insurance considerations that are inherent in manufacturing and/or marketing the product. Describe how you plan to limit the company’s liability. Provide an estimate of the percent cost of the product that will be applied toward liability coverage.

Common Mistakes to Avoid Describing the product/service too technically, too broadly, or too ambiguously Failing to identify new, unique, or better capabilities, features, or benefits Failing to do the homework on protection availability or not showing how to protect product/service from liability or competition

Common Mistakes to Avoid Identifying too much red tape and too many uncertainties from regulatory agencies Including weak future development plans for improvements, expansion, and staying ahead of market needs and competition Failing to consider the reliability, maintenance, and/or updating factors to keep downtime at a minimum Failing to include a third-party evaluation of your product/service