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					SCORE                              ®
Counselors to America’s Small Business




                              Create a Winning
                               Business Plan
                                         Session 2
                                             Competitor Analysis
                                         Your Competitive Advantage
                                              Setting Strategies
                                           Sales and Margin Goals
                          Marketing Section
          Product and/or services – from customer’s view
          Industry Description, size, growth, major trends
          Characteristics of target buyer and her unmet
           needs
          Target market – your niche
          Competitor Analysis – Strengths and Weaknesses
          Your competitive advantage & niche; i.e., why will a
           customer do business with you?
          Strategies – selling, pricing, purchasing, location
           and advertising
          Goals (sales volume and margins) based on
           forecast; list of key assumptions
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                                                                          Worksheet 5
                    Marketing Section                           (continued)




           Competition          Strengths                       Weakness
           Competitor 1
                               1. How many direct competitors do you
                                  have?
           Competitor 2        2. Are there competitors or products that
                                  may offer indirect competition?
                               3. In what ways do they compete?
                               4. Will there be additional competitors?
           Competitor 3


           Competitive    ( Describe your unique competitive advantage)

           Advantage

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                              Define Your
                      Competitive Advantage
      1.   Cost                       3.   Service
           –   Buying power                –   Customer service
           –   Distribution                –   Strong sales force
           –   Technology                  –   Extra services
                                           –   Customization


      2.   Quality/Performance        4.   Convenience
           –   Technology                  –   Location
           –   Features                    –   Broad line
           –   Guarantees                  –   Product bundling
                                           –   Hours of service


           Define this advantage in your target market (or niche)
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                        Example - Competition

          Competition comes from health clubs
           – national, regional, and local

          Few fitness centers located in downtown Seattle
           except several small fitness facilities
          These organizations are primarily exercise
           facilities with little emphasis on personalizing
           individual plans to improve working performance
          None of these cater their services to corporations



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               Example – Competitor Analysis

          YMCA
           – market is lower-income families and/or students

          Gold's Gym
           – targets motivated and dedicated individuals

          Better Bodies
           – aimed at casual fitness-seekers




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            Example – Competitive Advantage

          We manage health care costs, by working with
           client companies to implement wellness strategies
          An integral part of our service is follow-up and
           monitoring the individuals
          Many employees will benefit from our program
           without ever visiting the fitness facility




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                                                                             Worksheet 6
                      Marketing Section                             (continued)



           Selling        Retail;  Wholesale;  Service
           strategy       Home-based;  Internet
           Location      (Describe advantages or disadvantages vs. competition)
           Strategy      Is your location important to your customers?
                         Is it convenient?
                         Is it consistent with your image?
                         Is it better for you to be near your competitors or far?
           Pricing        Mark up;  Cost+;  Bid
           strategy
                         What are the current pricing practices in your industry?
                         What is the mark-up used by your competitors?
                         How aggressive is the “Sales” pricing?
                         Is chosen strategy consistent with your image?
           Purchasing Major categories
           strategy
                      Vendors for each (List up to 5 vendors)
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                  Example - Selling Strategy

          We will target small- to medium-sized businesses
           in downtown Seattle
          The first task is to convince senior executives of
           the benefits and needs of wellness programs
          This will be accomplished by aggressively
           pursuing interaction and relationships with
           business professionals who would profit from using
           this service




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                 Example - Location Strategy

          Corporate Fitness headquarters are located within
           the first club located in downtown Seattle
          Upon expansion, offices will be moved to a
           different location, not within any individual club




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                  Example - Pricing Strategy

          Prices for using Corporate Fitness' services are
           comparable to those of higher-end fitness centers
           and reflect the quality of the equipment and
           service
          An employee choosing to utilize a Corporate
           Fitness center will pay a $100 monthly fee
          For each employee enrolled in the general
           wellness program, regardless of whether or not
           they use the fitness facility, the employer will pay
           $150 annually


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              Example – Purchasing Strategy

          All fitness machines are purchased from exercise
           equipment distributors, while all medical
           equipment is bought from a reputable supply
           company




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                                                                                Worksheet 7
                           Marketing Section                           (continued)




           Advertising Strategy                   Develop a Message
           What is the purpose of the              Promote your product;
           message?                                Promote your image
           Define the image you wish to
           promote
           What BENEFITS of your products,
           or doing business with you should it
           emphasize?
           How will it motivate the buyer?


           Write Your message


           Is it clear, concise, understandable?  Yes;  No
           Is it easily remembered?                Yes;  No
           Is it supported by credible facts?      Yes;  No
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                                                                   Worksheet 5
                     Marketing Section                    (continued)




           Advertising   Select the Media
           Strategy
           Define        Sex:
                         Age :
           demographic   Race:
           s of your     Money:
           target
           audience

           Select the     Word of Mouth  Networking  Community involvement
                          Newsletter  News release  Publish
           right media   articles/testimonials
                         Flyers  Door hangers  Signage  Billboards
                          Internet  Newspaper  Directory/Yellow Forms
                         Radio  TV  Catalog/Direct Mail
                         Why did you make this selection?
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                    Advertising Budget
                      start-up + maintenance

          Avoid start … stop advertising
          Set affordable ad budget as % of
           revenue
          Perform cost / benefit analysis
           – Track sales outcome from each ad strategy
           – Compare it to the cost
           – Decide if it is worth it


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               Example – Advertising Strategy

          Initial promotional activity
           – advertisements in newspapers, magazines, and on television and
             radio

          Maintenance advertising
           – word-of-mouth to attract more clients
           – occasionally supplemented by small promotions thru media




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                   Forecast Sales & Margins
             Educated view of the future with data which can be defended

          Start with Market Research
          Disaggregate product lines or services for
           improved estimates
          Make reasonable assumptions & realistic premises
           (list them)
           – Census data
                 Demographics & competition
                 Spendable income and growth patterns
           – Industry data
                 RMA, D&B, Bizstats
                 Trade Association data
                 Vendor input and own or other data
           – Constructive estimates
                 Pre-sold contracts / Commitments from buyers
                 Market research and focus groups
                 Historical experience – own or others

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                                                                                       Worksheet 8
               Sales Volume-Margin Forecast
           Month                        1   2   3   4   5   6   7   8   9   10   11   12   YEAR


           # of customers

           Average # of units
                per customer
           # of units you
                 expect to sell
           Average sales price

           Average cost of sale

           Gross margin
           = price - cost

           Gross Profit
           =Sales units x gross margin


                                   Develop it here and reuse it in the
                                      Cash Flow Forecast in the
                                           Financial Section
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           Sales Forecast Example




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                       Homework
                         Session 2
          Finish the Marketing Section by completing
           template pages 5, 6, 7, 8. E-mail to the
           instructors by Sunday noon, and bring to
           session #3.
          Use your SCORE counselor




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