Product or Service
The product or service section can be repeated for each major category that you offer. You should probably do the same in the marketing section.
You should offer a detailed description of the product or service in this section. You can supplement any verbiage with charts, graphs, pictures, or video productions. If you are selling a service you should accurately describe the entirety of the service, any continuing follow up service, and any warranties and guarantees. Technical jargon and specifications are not warranted. If you feel they are critical to the understanding use layman’s terms here and put the technical specs in the appendix.
Features and Benefits
People purchase goods and services for the benefits they receive from their consumption. Benefits usually include saving time, money or aggravation. They can also add to your enjoyment, relaxation, safety and convenience. The reader of your business plan will be disappointed or confused if they cannot envision the use of the product or service by the buyer. The reader wants to know that the consumer will be satisfied, that they will recommend it, and/or will purchase it again? Do not leave your reader with troubling or nagging questions as to how the product satisfies the consumer’s need. An important part of describing the good or service is giving the reader a mental picture of the prospect using the product or service and conveying how satisfied the client is with their purchase.
a. Not only does your product or service have to benefit the customer but it has to be able to do this in the face of strong competition. It is important to clearly articulate how or why your concept is better than the other products or services already there. A company must have some sort of competitive advantage or there is little chance of success. Yes, it is true that some companies can ride on wave of enthusiasm for a while, but unless there is some distinct advantage that they can maintain and defend from the competition there will be little long-term success.
b. Remember that competitive advantage takes many forms. The business can have a superior product, unique concept, customized product or service, or be in a location that is not currently being served. When you are going head-to-head with other competitors you have to convey your advantage to the customer. Conveying this advantage may require extensive advertising, demonstration or promotion. Be sure that your business plan and financial projections are realistically tied together.
Production or Development
No matter how good the product or service is, it must be produced at a price point that reflects good value for the customer. Value doesn’t automatically mean low price, although that is one option. Value confers a personal evaluation of the price vs. the product or service received. Because different people will evaluate the value proposition differently it is critical that the segments of the market you strive to satisfy are valuing your product or service as a superior for their need at your price point.
The production must be consistent and the quality must be the same over time. Can other persons involved be trained to provide the same level of performance? Will the demand continue if the product or service is copied or duplicated by a competitor? Can you grow, expand or modify the product or service to stay viable in a changing marketplace? The reader of your plan will be thinking this as they read through your narrative and will constantly evaluating how well you have answered these nagging questions.