Products or Services Section of Your Business Plan
How to Describe What You Sell in Terms Lenders and Investors Will Appreciate
Having created an executive summary that piques the reader’s curiosity and has them wanting to know more, you’re ready to move on. Next, you’ll be able to expand upon things that have only been touched upon earlier. Start with a more complete description of your products or services.
For more details, click the links in the Included in this Section box on this page.
What Does Your Business Offer Its Customers
The products and services section of your plan tells the reader what you do for customers. Don’t be concerned if you already briefly described that in your executive summary. Business plans are not always read start-to-finish in order. Plus, this section will go into more detail.
Simple Outline for Products and Services Section
Use the high-level outline below to draft the products and services section of your business plan.
- Describe your products and services in enough detail that an investor or lender would understand what you do for your customers.
- For highly differentiated products or new inventions, expand upon your products in more detail. The reader should be able to tell someone what you do accurately, even if they don’t understand how you do it.
- Insert a table or simple listing of your products, or those products that collectively will make up 80% of your revenue. If necessary, categorize and group your products to avoid lengthy lists. Indicate the percent of your revenue expected to come from each product or category. Round numbers are fine for this section.
What to be Sure to Include
The primary purpose of this section of your business plan is to answer two questions for the reader:
What does your business provide that customers will find so compelling that they will give you their money to provide it?
An investor or lender needs to understand the products and services you provide that generate revenue. While that sounds obvious, you should start the products and services section of your plan with a clear and succinct answer to this question. It’s tempting to go into the explanation of what’s behind it, why they need your products or the history of how you created these products. That can come later, maybe. Start by clearly stating what it is that you sell.
The next question provides you with more opportunity for pride of authorship.
What makes your products or services different from others selling the same or similar things?
Now that it is clear what you sell, take the time to explain how your products or services are differentiated or specialized in a way that makes them more attractive than similar ones that might be available. Describe your products in a way that makes it clear that they are not simply “me-too” offerings that are basically like every other product of its kind.
A Common Mistake to Avoid in Your Business Plan
Business owners, especially those that are the founders, tend to have a lot of pride in their products and services. That’s great! You shouldn’t be in a business where that is not the case.
For your business plan, keep in mind who your reader will be and what they need to know. They need to understand your products and how they are differentiated in the marketplace. It’s better to tell them why people will buy your products, without providing them with a sales pitch or a brochure. The marketing materials, if you have them, can be provided in an appendix.
As a guideline, provide details on the benefits and very few details on the features. Remember that this section should not read like a spec sheet or a training manual for your products and services. Instead, state the benefits that customers appreciate about your products and services, with only enough ‘feature’ details to make the benefits clear.
What about Research and Development or R&D?
If your product or services are highly reliant on an invention, a proprietary methodology, trade secrets or patents, then your business plan should include a section on Research and Development. Research and Development, or “R&D” is included in the Products and Services section of your business plan.
For more information on R&D or other parts of the Products and Services section of your business plan, click on the links in the “Included in this Section” box on the right for desktop users and below for mobile visitors.
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