Business people often miss this important stage of the company plan process because they think it is obvious and simple and slough off it. You don’t just have to know what products and services you want to offer, but also what they are and in what price range you would like to sell them. You also have to have an idea what you eventually want to market later on.
It is not a simple process to secure products and it certainly isn’t easy to establish costs. You want to be distinct, you would like to stand outside. There’s no sense being the same as everyone else. Let’s look at a couple of different companies to better understand what I am talking about.
Are you going to strike your competitors with cost – a bad idea in most instances – or by adding advantages for your customers?
What value-added gains are you going to offer?
Are you really going to offer a seasonal bundle of services or are you really going to charge by the trip?
Are you going to add fertilizing and weed control jointly with yard upkeep or are those services going to be extra?
Are products like fertilizer paid for separately?
Are you really going to bill your customers the exact same price for fertilizer you pay or upcharge them?
By answering questions like these, you will have the ability to make decisions about what services you want to provide and what revenue streams you may expect to have once you are in operation. You have to recognize your potential earnings streams because it is those streams that fuel your earnings. The greater amount of revenue streams you have, the greater chance you have to build your earnings. In addition, you need to know what services you’re going to offer because you want to know what abilities your employees need. If you are not a certified’that’ or’that’, then you’ll need to have somebody on your staff who’s if it is a requirement.
Let’s look at a clothes store. Say you have decided you want to open a ladies’ wear socket in the local mall.
Are you really going to take accessories?
What about outerwear?
Are you really going carry sportswear or business wear or both?
What’s your price point?
Are you really going to offer an alterations service?
Is it going to become in-house?
Are you going to charge for the support or add it in the price of purchases?
As you can see there is a great deal of work to perform. You have to do your own homework. You must be able to’see’ what is happening on your business BEFORE you start.
You also must know about the potential changes in the marketplace throughout the year. Seasonal shifts in demand for services and products can be spectacular. Summer sales could be good or bad. Perhaps you run in a college town and from June through September the people base tumbles. Angola may be boom or float depending upon where your business is situated.
Once you’ve got a good handle on your services and products, you will have the ability to better predict your sales – you’ll have your revenue streams – and you are going to be able to predict your cost of goods sold since you will know where you’re buying things out of and how much you’re paying for them. It’s all about projections for your financial prediction.