Marketing Plan Outline - Step Three - SPRING 2024

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Simon Fraser University *

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Apr 3, 2024

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Marketing plan – Step Three - MRKT 4331 Please refer to step one preamble to required elements as it fully applies to step three all steps in the marketing plan. FINANCIAL PLAN: It’s time to talk Numbers. Background / Preamble: You are asking for and supporting your request for the seed capital money. This section will explain how much you need; how you arrived at that number; what purchases will be made and how you plan to earn back borrowed monies with sales revenue and pay it back by the end of the first year of operation. How much you ask for should be supported by the total of your Start-Up costs (everything you need to spend before you open the doors) + any Operating costs for the first few months that you need to pay until sales start coming in (enough to cover your ongoing expenses). Start-up Costs: These are required to start your business. Start-up costs may include tools & equipment, inventory, supplies, systems setup, materials, and consumables, etc. Add your start- up costs to the financial spreadsheet. Overhead – These are your ongoing monthly costs. Show how much you need every month to keep the lights on, pay bills and keep the business operating. Rent, utilities, employee wages, internet, website hosting fees, and more. Add your Overhead costs to the financial spreadsheet. Sales Forecast: Every business starts slow and grows into more consistent sales. Incorporate all the activities discussed in the previous steps that affect your growth in the financial spreadsheet. Add your marketing activities and business initiatives along with the associated costs to the financial spreadsheet. These will include:  Step one: Section 3. Goals and Business Initiatives - supports unit sales by month forecast.  Step two: Section 4. Marketing Channels Table – supports unit sales by month forecast.  Step two: Section 5. Promotion strategy and cost – supports all promotional costs.  Step two – Influencer table – Supports influencer costs  Step two: Section 7. After Sales Strategy - supports all after-sales costs.  Other expenses – start-up costs, overhead, shipping, inventory, insurance, etc. Page 1 of 8 Sources for Business Plan: Business Development Bank of Canada, Marketing-3 rd CDN Ed. Grewal et al. & Paul leigh

Marketing plan – Step Three - MRKT 4331 1. Financials There are four parts to this section: Parts A, B, C and D. Part A – BREAK-EVEN : Requirement: Calculate your Break-Even point:  Show your formula.  Calculate the BE using your formula.  Indicate which month in the first year of operation BE is forecasted to occur. Part B – ANALYSIS : Requirement: How you arrived at your forecasted unit sales - supporting calculations / assumptions / etc.: This is where you now support / prove how you arrived at your forecasted unit sales for each month of the first-year pro-forma income statement forecast. You will tie the metrics discussed in previous sections to your monthly forecasted unit sales using various and supported conversion rates for each of the marketing / business activities you had planned in steps 1 & 2 of the Marketing Plan. Complete each of the tables below and then incorporate the information from these into your Financial Forecast spreadsheet. For each table below show how you derived your numbers. Do this for all metrics related to the Financial Spreadsheet as they apply to marketing activities and business initiatives. Show all assumptions. The following example for Facebook posts / advertising demonstrates the level of detail required to support your unit sales numbers in your proforma income statement spreadsheet. You would fill this in for all your Goals & Business Initiatives, Marketing Channels, Promotional Activities, and After-Sales activities. Page 2 of 8 Sources for Business Plan: Business Development Bank of Canada, Marketing-3 rd CDN Ed. Grewal et al. & Paul leigh

Marketing plan – Step Three - MRKT 4331 Example Only: Facebook post / ad If you are using Facebook as one of your social media platforms and your strategy is to use Facebook post / advertising to drive traffic to your website and pay for each click to your website, then the following analysis and proof might apply. This Example is using the “Beauty” industry for the research metrics. You would complete the following tables after this example. The research tables / charts that support your analysis would go into the appendices.) Social Media Platform Avg. Posts / Ads per month * (based on research) Average CPC $** (Based on research) Total Cost per month (Set a budget) Total Clicks (CTR) (Based on research & budget) Total CTR’s per month Avg. Conversion rate of FB ads** (Based on research) Unit Sales per month*** FB 30 1.81 60.00 60/1.81=33 33 7.10% 2.34 Other *Posts per 30-day month will vary based on the Social Media platform selected and the range of posts suggested by research – take the average of the range for your forecast. FB recommended posts range from 1-2 per day. I will use one per day for this example. ** Conversion rate based on research – see chart below for 2022. If I am in the Beauty sector, then the conversion rate is 7.10% and the Average CPC for the Beauty industry is $1.81. *** This is the calculated number based on the analysis and research that supports sales each month based on FB and your budget. 33 X 7.10% = 2.34 Page 3 of 8 Sources for Business Plan: Business Development Bank of Canada, Marketing-3 rd CDN Ed. Grewal et al. & Paul leigh

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Marketing plan – Step Three - MRKT 4331 Page 4 of 8 Sources for Business Plan: Business Development Bank of Canada, Marketing-3 rd CDN Ed. Grewal et al. & Paul leigh

Marketing plan – Step Three - MRKT 4331 Use the following charts to complete your analysis and input the results into the financial income statement pro-forma spreadsheet. Goals and Business Initiatives Goals and Business Initiatives Month(s) Unit Sales are expected to occur Costs to Implement $ Hard Metrics to Measure Conversio n Rate Total Annual Forecasted Unit Sales Initiative #1 Initiative # 2 Marketing Channels Table - Website Website Month(s) Unit Sales are expected to occur Costs to Implement $ Hard Metrics to Measure Conversion Rate Total Annual Forecasted Unit Sales Website Other if needed Marketing Channels Table - Social Media Social Media Platform Avg. Posts / Ads per month* (based on research) Averag e CPC $** (Based on research) Total Cost per month (Set a budget) Total Clicks (CTR) (Based on research & budget) Total CTR’s per month Avg. Conversion rate of FB ads** (Based on research) Unit Sales per month (Formula) Total Annual Forecasted Unit Sales SM Platform #1 SM Platform #2 SM Platform #3 Other if needed *Posts per 30-day month will vary based on the Social Media platform selected and the range of posts suggested by research – take the average of the range for your forecast. ** Conversion rate based on research – see chart below for 2022. Page 5 of 8 Sources for Business Plan: Business Development Bank of Canada, Marketing-3 rd CDN Ed. Grewal et al. & Paul leigh

Marketing plan – Step Three - MRKT 4331 Promotion Mix Table Promotion Strategy Month(s) Unit Sales are expected to occur Costs to Implement $ Hard Metrics to Measure Conversio n Rate Total Annual Forecasted Unit Sales [ Example :Affiliate Marketing [ Example :Email Advertising [ Example : Digital PR [ Example :SEM Campaigns [ Example :Video Advertising [ Example :Mobile Advertising [ Example : etc. After Sales Strategy After Sales Month(s ) Unit Sales are expected to occur Costs to Implement $ Metrics to Measure Conversion Rate Total Annual Forecasted Unit Sales [ Example : Remarketing on Google] All 12 months Example: average cost for remarketing on Google is $0.66 to $1.23 per click. The average is $0.95. 25% of the display advertising budget of $500 per month is $125 per month for remarketing or $125 x 12 = $1500 annually at 100% utilization yields $125/$4.22= 29 Clicks. *CTR of 6.11% *CPC of $4.22 * Conversion rate of 7.04% Plus 10% = 7.74% Example: At a conversion rate of 7.74% 2 sales per month should occur. Therefore, 2 X 12 = 24 sales generated per annum. Page 6 of 8 Sources for Business Plan: Business Development Bank of Canada, Marketing-3 rd CDN Ed. Grewal et al. & Paul leigh

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Marketing plan – Step Three - MRKT 4331 Part C – PROFORMA INCOME STATEMENT: Requirements: 1. EXPLAIN YOUR PROFORMA IN DETAIL – Do not simply put this in your presentation and expect the audience to read, interpret and understand the pro- forma – this is your job to do accomplish this in your narrated PPT presentation. Include the Spreadsheet as a significant part of your presentation and explain the contents and outcomes to your audience to convince them to invest the seed capital with your business Marketing Plan proposal. Review your assumptions, analysis, etc. Demonstrate to your audience your business / marketing plan is worth advancing the seed capital funds. 2. Complete the one-year Pro-forma Monthly Income Statement excel spreadsheet supplied on the course Moodle site as to how you believe sales will start and grow over the first 12 months. 3. Ensure these are NOT made-up numbers or guesses. The number should have been generated from your research and analysis in Part B – Analysis section above. Numbers from analysis sections above must be accurately reflected in your pro-forma monthly income statement. 4. You are not required to complete any other financial statements. 5. Feel free to modify this spreadsheet as required to adapt this to your business situation. Remove any line items not used and add any you need to capture your financial activity associated with the income statement and operating the online business. 6. Demonstrate that you can pay back the seed capital and possibly generate a profit proving this is a viable business and not a charity. 7. Treat this as a cash-based business. Costs cannot be deferred or accrued. Your supplier may provide up to 30 days for payment, however as a cash-based business, you must pay on the date you order your inventory from the supplier. You are asking for and supporting your request for the seed capital money. You may spend more than the initial amount of the seed capital provided as you generate profits and recycle the profits back into operating the business. Remember, to have a viable business, you must generate enough sales to pay back the seed capital within the first year of operation. This is a for profit enterprise and NOT a charity. This is not a multi-year plan in which you may break even or turn profitable in years 2 or 3. The following Wikipedia Marketing Strategy link may help. Page 7 of 8 Sources for Business Plan: Business Development Bank of Canada, Marketing-3 rd CDN Ed. Grewal et al. & Paul leigh

Marketing plan – Step Three - MRKT 4331 Part D – Risks To wrap up the entire story – you need to acknowledge that there are risks and it is possible that things could deviate from this strategic plan. Talk about a maximum of two (2) significant and probable risks or unfavorable outcomes you can identify that might impact your business and your chances for success. Tell the reader what you will do to counter these risks. Consider: new competition, lower than projected sales; change in cost of raw materials; key team member illness, etc. Appendices. Additional useful information, supporting research/analysis/calculations, industry benchmarks, infographics, Citations, etc. that might clutter the plan should appear in an appendix. Maximum PowerPoint slides permitted for appendices is 5 slides. Page 8 of 8 Sources for Business Plan: Business Development Bank of Canada, Marketing-3 rd CDN Ed. Grewal et al. & Paul leigh

Marketing Plan Outline - Step Three - SPRING 2024

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