Consequences of Not Having a Marketing Plan
For a small-business owner, the end goal seems intuitive -- to sell a product or service and succeed in business. However, a business owner with a marketing plan has a big advantage, because she knows not only what she wants to achieve but how she intends to achieve it. A marketing plan is a road map to achieving your goals, and not having one can derail your business.
A marketing plan is an analysis of your business and its place in the market, with clearly defined goals and a time line for meeting those goals. The marketing plan should include an analysis of who your most likely customers are, how you plan to let them know about your product or service, who your competitors are and what distinguishes you from your competitors. Your plan should also state what your goals are for the next six months, the next year or whatever other time period you want to consider. Finally, the plan should include a budget for meeting these goals. If you don't have a marketing plan, you won't know the answer to any of these questions.
Business owners often focus too much on their own excitement about the product or service provided by their company, rather than on the question of who will be buying that product and how to reach them. For example, if you own a company that sells hand-crafted duck decoys but you don't know who would be in the market for such a product, what websites they usually visit or what magazines they read, you will probably have a very difficult time selling your decoys. Unless you determine the answers to these questions, you won't know where to buy advertising or how much to budget for it. A 2003 survey conducted by a company called Capital Connection found that the most common mistake in business was failing to identify the target market and how to reach it.
Along with identifying your customers and understanding their habits, you also need to make sure you understand your competition and what sets your product apart. For instance, other companies might offer less-expensive mass-produced duck decoys in competition with the hand-crafted decoys offered by your own company. The competition may be able to offer a lower price, but your company might be able to offer superior craftsmanship and attention to detail. If you don't have a marketing plan to spell out what distinguishes you from the competition, you won't know what factors to emphasize in your advertising.
Understanding your customers and your competition should give you a good idea of how much money you need to budget for marketing. If your intended customers spend a lot of time on a particular website, you can contact the site to find out the cost of a banner ad. If they subscribe to a certain magazine you can do the same. If they tend to go to an annual trade show, you can set up a table or a booth there. Without a marketing plan, you can't budget ahead of time to cover these expenses. A good marketing plan should also include specific goals, such as increasing sales by 25 percent in the next six months. If you have a marketing plan, you can compare your goals to your results to determine which marketing campaigns were most effective in practice. Without a plan, you would have no way of knowing.