If your business involves creating, manufacturing, developing, or publishing products, product planning can be incredibly beneficial. Whether it’s for a formal business plan, a lean business plan, or simply for better management, including product-related elements is crucial.
Start by listing the key products and services your business offers. It’s up to you to decide how detailed this list should be. Use common sense and context—group products into main categories if that makes sense; avoid an overly exhaustive list if it’s unnecessary. For a typical business plan, broad categories work better than a detailed breakdown. While team members might need extensive details, outsiders will find too much information overwhelming. Make sure your items or categories align with your sales projections. Consider who will be reading your plan. Bankers, for instance, will look for sales history to validate financial performance, while investors are interested in seeing potential for future growth. You can include detailed product information, like published price lists, in the appendices.
A business plan should look to the future, so include product roadmaps. Show plans for improvements, new features, and versions. Anticipate growth and development. It’s important to include specific dates, deadlines, and details to mark progress and keep the business on track.
If outsiders will be reading your plan, include practical descriptions of any involved technology. Also, explain sourcing if you’re buying components or products for resale. The importance of these details depends on your context, but they are critical for high-tech products, apps, and physical products.
For plans aimed at outsiders, list your intellectual property. Strong patents can demonstrate barriers to entry for competitors, but even without patents, list any copyrights, trademarks, or trade secrets. Mentioning your market position, trade secrets, and relationships can act as a “secret sauce” that defends your business against competition.
When dealing with physical products, analyze unit economics and scalability. Unit economics detail the cost to deliver your product, what you charge for it, and margins within your delivery channels. Investors favor scalable product businesses. In professional services, like consulting or accounting, increasing sales often means increasing headcount and fixed costs. However, some service businesses, like web tools, can scale more easily. Achieving scale means boosting sales volume without a proportional rise in overhead and fixed costs.
Bankers will want to see sales history, steady growth, clear distribution channels, stability, and easy sourcing. Existing businesses need to show distribution agreements, vendor contracts, and other pieces of evidence to demonstrate stability.
Startups looking for investment need to offer as much validation as possible. Show sales if you have them, even those made through crowdfunding sites like Kickstarter, Indiegogo, or FundRazr. Contracts with buyers or signed letters from potential buyers or distributors can also help greatly.
Remember, all business planning is context-sensitive. Include only the elements necessary to meet your business objectives. For internal use, such as lean business plans, bullet points, action points, tasks, deadlines, and budgets are sufficient without detailed descriptions. When sharing your plan with outsiders, add the necessary descriptions to help them understand and absorb the information.
