Describe available distribution channels and how you plan to use them.
Many entrepreneurs fail to give adequate thought to method of sales. How you get the products to the end user – your method of distribution and sales – is one of the most important elements of your plan. In this section you demonstrate the ability and knowledge to get your products into the hands of your target customers.
Will you be selling directly to your customers? Will you be using sales representatives, distributors, or brokers? Do you plan to have a direct sales force in place? See the list of definitions for some help in determining what method of sales to use.
You must also elucidate your plan for reaching your distribution channels. Will you be selling directly to your customers? Will you be using sales representatives, distributors, or brokers? Do you plan to have a direct sales force in place? See the list of definitions for some help in determining what method of sales to use. Will you use a “ground service” like UPS? Will you use a next-day delivery service? Parcel post? A trucking company? Make sure to include these costs when you calculate your financials later in the plan.
- Don’t make the mistake of confusing sales with marketing. Sales focuses on how you get your products into the hands of your customers. Marketing is concerned with how you educate your potential customers about your product.
- If you’re using an outside or indirect sales force – like sales reps or distributors – be sure to describe the companies that will be carrying your products. What are the benefits of using these specific firms? What unique talents do they bring to the table?
- Many small businesses assume that a sales effort can be set up with minimal timing, effort and expense. This is not the case. It can take as long as a year for a sales person to become acquainted with a product and territory. Even if you use sales reps who are intimate with a territory and market, expect there to be ramp-up time.
- Don’t assume a distribution network will give your products or services equal sales time. You may need to create an incentive structure that will encourage your network to push your products/services.
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