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Even if you are the only person who will ever see your business plan, there are certain elements that should be included. These will help make it a working document, not one written in December and filed away for safekeeping.
A business plan serves two purposes. First, it provides you with a guide to operate your business. Second, if you are seeking working capital it is a sales tool that will impress bankers. It will also impress distributors and publishers that you are serious about what you are doing. An elementary business plan includes a marketing plan, financial plan, facilities plan and personnel plan. It should describe the following:
Summary. Always include a short summary of your business particularly if you intend to use it to woo investors. It also serves as a reminder of where you propose to focus your efforts. Limit the length of the summary to one page and include the following:
What you will accomplish in this period in terms of unit sales, gross revenue and net income.
Remember the 4Ps of marketing: product, place, price and promotion. Describe broadly how you intend to manipulate each of them strategically to reach your objectives.
These are the details of specific actions you will take to implement the strategies that will ultimately achieve your objective. Again, it is helpful to categorize them by the 4Ps.
Can you make your book more detailed than competitors' works? More up-to-date?
What will you do next? A new book or planned second edition will enhance your stature among publishers and distributors. They are more likely to take you seriously if you can demonstrate you are not a single-title author.
If distributors or sales representatives will be used, describe how they will be attracted, compensated and what geographic areas will be covered.
Always consider the discount the people in your distribution channel will assess.
Public relations. Describe how you will generate free publicity through appearances on television and radio shows. How will you stimulate book reviews?
Sales promotion. Give examples of the sales promotional tools you will implement. What kind of promotional literature will you develop? Four color? Black and white?
Advertising. In what media will you advertise? How will you use continuity to create awareness of your new book? How will you use direct mail to reach your targeted lists? Include a description of the trade shows you will attend such as the BEA or regional shows.
Personal selling. Describe how you will stimulate sales through personal presentations, book signings and seminars you will conduct.
If you perform all these tactics, how many books will you sell. Here you will provide an estimate of sales in terms of units and revenue. Identify any major customers who have made or are willing to make purchase commitments.
Given the revenue you expect and the costs for implementing all your tactics, create a budget. The amount of financial information presented in your business plan will depend largely on the stage of your financing and the amount of money you are seeking. Your plan should describe in general terms the type and amount of funding you need.
Make sure you allocate for returned books and bad debt. Also take into consideration the 90-120 day payment policies of retailers and distributors. You will find yourself doing many revisions of your financial statements. For example, some tactics may have to be delayed until the next period if you do not project the revenue to pay for them.
It will take a considerable amount of time to create this document the first time, but it will be well worth the effort. You will have a prepared list of actions to take to sell more books. Your objective will be there to motivate you to work more. and your budgets will keep you fiscally responsible. Use the typically slow time around the holidays to plan your efforts and results for this year and beyond.
James A. Cox
Midwest Book Review
278 Orchard Drive
Oregon, WI 53575-1129
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