If you’re considering opening a new business, odds are lots of new terms and phrases have been thrown at you lately. Profit and loss sheets…break even analysis…value propositions…if you’re starting to feel confused and overwhelmed, we don’t blame you.
It takes a lot of research, specialized knowledge, and patience to get a business off the ground. And while there’s a lot of paperwork awaiting you as a new CEO or entrepreneur, just know that few are more important than your business plan – or the report that lays out your business model and strategy – and your marketing plan – or the document that explains the budget, timeline, and strategy of how your business plans to reach new customers.
But what are both documents, actually? Are they both really necessary? And what’s the difference between the two of them, anyway? Let’s get into the nitty gritty of each one, and the differences between them, below.
Business Plans and Marketing Plans: Do I really need them both?
While the two titles may sound similar, let us assure you that business plans and marketing plans serve two different purposes. If your business plan gives an overview of your business as a whole, such as your mission statement, management team, profit projections, and more, your marketing plan is specifically focused on – you guessed it – marketing!
More specifically, your business plan proves that your business is well thought out, logical, and has the potential to be profitable for the long term. It proves that your business adds something to the market that’s not already there, and it shows that you have a vision for being competitive and successful. You not only know who you are as a company, but you also know what sets you apart from the competition. In short, your business plan really is the document that shows you’ve thought about every aspect that must be considered when taking a business from a dream to a reality. It sets you apart from every other “Joe Shmoe” who’s pitched a business idea but has never taken action. It shows that you’re serious about your idea and that you’re willing to roll your sleeves up, do the work, and put your money where your mouth is.
Conversely, a marketing plan really is just focused about one thing as it relates to your business: marketing (surprising, right?). In a marketing plan, you’ll break down exactly how you plan on reaching your target market, or intended customers. Because, as one wise business man once said, “You can have the greatest product or service in the world, but if no one knows about it, it’s pretty much worthless.” Therefore, your marketing plan really lays out who your customers are and exactly how and when you plan to advertise to them. This is crucial because in business, as well as in life, few things happen without a well-thought out plan in writing to back them up. Your marketing plan is not only proof of, but also a commitment to, a well-researched marketing strategy.
So in short – yes – you MUST write up both documents as they serve two very different, yet two very important purposes for any new business. But our advice? Write up the business plan first, because it’ll give you a broad overview of your business that will help you better understand your business model. This in turn will help you better understand your customers and how to reach them in your marketing plan.
And as always, don’t think you’re alone when it comes to writing a business or marketing plan. You can always hire a specialist to take on these very important tasks for you, or get current employees involved via brainstorming or proofreading sessions.
So what’s the difference between a Business Plan and a Marketing Plan, tit for tat?
In the spirit of keeping things simple, we’ve created a chart of this very information. But basically, think of it this way. People who might be most interested in seeing your business plan are future investors, lenders, or partners. They want to make sure your business model is sound and well researched. A business plan will assure them that your business idea is in fact profitable, since your business plan will be chock-full of statistics to back your claims of profitability up.
A marketing plan, on the other hand, summarizes your marketing strategy. This is a document that your business’ advertising department, social media manager, or salesmen and saleswomen might be interested in viewing. It should describe your company’s marketing goals, timeline, description of target customers, and more.
But without further ado, let’s let the chart speak for itself.
|Business Plan Format||Marketing Plan Format|
|Executive SummaryA hook into your business plan that explains your business and ultimate goals in specific terms. I.e. “Our business’ ability to create higher quality products at a faster rate than our competitors make us the more desirable choice for consumers 85% of the time.”||Business Summary i.e. When did your business start? What product or service do you provide? Are you primarily online or in-person based? etc.|
|Company DescriptionAlso known as the “Company Summary” or “Company Overview,” this section quickly gives key facts and information about your business, like location, starting date, and competitive advantage.||Marketing SummaryOverview of company’s advertising and marketing goals.|
|Marketing AnalysisPerhaps by the name itself – it might feel as though this section in itself could be interchangeable with your Marketing Plan – however this is not true. Market Analysis simply defines your market i.e. who wants your product? It doesn’t lay out in as much, if any detail, exactly how to reach them like a Marketing Plan should. Although it is definitely information you’ll need on hand when writing your Marketing Plan.||Brand OverviewDescription of your company’s current brand identity or marketing position (how do customers see your brand, and how do they see it as compared to your competitors?)|
|Organization and ManagementWho works at your company? Oftentimes, you’ll find this section of a business plan includes an organizational flowchart to visually lay out a company’s chain of command.||Strategy Timeline Perhaps the most thorough part of your Marketing Plan, this section describes in detail what type of ads you will run and when. i.e. When will each print ad be released? Will there be radio ads? What are the dates of your upcoming social media campaigns?|
|Service or Product LineWhat product(s) or service(s) does your business offer? What is the process of making your product or service a reality? And what’s your profit margin on said product or service?||Description of Marketing Channels In detail, list each marketing channel. And, beyond specifying radio vs print vs TV vs social media, explain what radio show, what time slot, what type of social media ads, etc.|
|Marketing and SalesIn less detail than your Marketing Plan, you’ll be expected to explain your marketing rationale (To whom do you market? Why? How?) and the process of making a sale (How do you build customer relationships? How do you keep them? How do you ensure your customer base will grow?)||Marketing Budget and Breakdown i.e. How much will you spend in quarter one on each marketing channel?|
|Financial ProjectionsPerhaps one of the most important sections of your business plan, this shows the predicted growth of your business. And, if you’re a business that’s already been up and running for a while, feel free to provide past sales and profit numbers to give more validity to your future projection numbers.||Your Intended KPIs (Key Performance Indicators) i.e. X% increase or social media engagement, or X more service inquiries submitted per month via our Instagram form.|
|Optional Sections: Funding Requests and AppendixesIf you plan on asking for capital in order to make your business happen, you may add a funding request section, where you outline how much money you’re looking for and what you plan to use it for.The optional appendix section, on the other hand, should be included if there are separate documents that you referred to throughout the business plan but weren’t able to include earlier, like patents, product pictures, etc.||Market DescriptionFinally, include a description of your customer’s needs and your target market. Pull on Census.gov or other reliable demographic data when possible to prove that your customer cross-section exists and can be reached with the marketing channels included in your marketing plan.|
|Free Business Plan Generating Software to get you started||Free Marketing Plan Template to get you started|
A marketing plan and business plan have some similarities, and some differences, but both are necessary for your business to have. And, because both documents can be complicated and require lots of research and background knowledge, some businesses prefer to hire these tasks out.
Whatever you choose to do, just know that neither of these documents are a place to take shortcuts, and the more effort you put into each of them, the more returns your business will see.
And as always, before you go, make sure you’re subscribed to our exclusive members only newsletters for the latest Business Plan King advice and updates. Because a businessman who stays up to date is a businessman who remains competitive.