business plan definition

your business plan has to lay out your
product development roadmap that roadmap should spell out what the major phases
are in product development as well as the timelines that go along with it
describe what’s in your Minimum Viable Product the first product that you put
in the market what are the features you’re going to release then discuss
what the next level of prototypes are going to be as well as when that final
product is going to be available and released into the market the business
plan should also describe your approach to testing research and development and
what that future product roadmap will be explain the key risks in your product
development lifecycle and how are you going to mitigate or account for those
risks when you layout your product development roadmap lay out those
features and functions at each stage of development and articulate what the
gates are for you to build that next level of functionality pricing is one of the most critical
decisions you’re going to have to make and your business plan needs to spell
out your pricing model as clearly as possible
you need to understand even a 1% differential on pricing can have a
disproportionate impact on your total profitability let’s assume your business
has a 10% profit margin if you raise prices by just 1% on the top line for
revenue you’ve increased your profitability by 10% that 1% will go
from your revenue line all the way to the bottom and your pricing will drive
margin from 10% to 11 pricing is huge do not under invest in thinking about it so
how do you come up with your pricing benchmark some of your competitors look
at their pricing model as well as their price points and use those price points
as anchors for pricing your own service also determine your pricing model and
the rationale behind it are you going to sell on a cost-plus basis are you going
to sell on a value basis is it going to be a one-time fee or ongoing fees or
some combination thereof laying out this model is critical because you’re going
to have to message it to the market as well as build the model into your
ultimate financial model as part of your business plan in the sales section of your business
plan you have to spell out how are you going to sell your product or service
will you use a sales force or will you just go direct consumer maybe from your
website if you’re using a sales force what’s the sales cycle going to look
like how long will it be what’s the conversion rate from prospect to
customer and make sure in the business plan if possible have supporting
evidence for that how are you going to compensate your sales force will it be a
base salary we pay them a commission is it going to be a combination of the two
because that’s going to drive your sales forces behavior and in the sales section
how are you going to conduct contracting will you have long-term contracts will
you have certain payment terms that you’re going to expect what type of
salespeople do you need and how are you going to compensate them and having that
clarity in your business plan is going to make it clearer how those people will
perform as well as how it will show up in the financial performance of your
business you

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