Products and Services in a Business Plan: What it is and How to Write it

Products and service section in a business plan is the section that gives details of your product or service and shows their competitive advantage. It articulates the benefits and value that your products or service give to your customers.

The main purpose of the products and services section of your business plan is to inform stakeholders such as investors or lenders the products and services that you sell. Understanding your products and services is important to stakeholders as they will use the information to assess whether your business sells what customers want.

The products and services section is written after the company description and right before the market analysis. Writing the products and service section requires a customer centric approach because the goal is to cater for customers’ needs through the section. 

What is the Products and Services Section in a Business Plan?

The products and services section in a business plan is a detailed description of the problem your business solves, the prices you charge and the intellectual property you own. The section is the essence of your business and the point around which every other section of your business plan is built.

The products and service section outlines your products and services, why they are needed in the market and how they will compete with other similar products and services. Its main purpose is to inform stakeholders what products or services your business sells.

Your products or services section should include a detailed description of your products or service, explain how they will be priced and elaborate how orders from customers will be processed.

Include needs that your business has to create or deliver your products and services such as manufacturing processes, partnerships and equipment. The products and services section convinces investors that you will outperform competitors and get the funding your business needs. 

What to Include in the Business Plan’s Products and Services Section?

Items to include in the products and services section of a business plan entail a portfolio showing the range of products or services that your business offers to potential customers.

Explain the features and benefits of your product or service in terms of what they do and how they work. Explain the problem that the product or service solves and how the product or  service solves it.

Include innovations that your business is doing and explain why the market needs your innovation. Add intellectual property such as patents or trademarks and exclusive agreements with vendors or suppliers.

How to Write a Products and Services Section in a Business Plan

Writing a products and services section is a step by step process. You will be required to keep it to the point and don’t make the section lengthy. Focus on the benefits of your product or service as the goal of the section is to solve a pain point in the market.

Be customer oriented when writing the section by indicating what is special about your product or service. Show your expertise but explain everything in simple language to make the section generally understandable. The following are elements that you must include when writing the products and services section in a business plan.

Product Description

The product description element of the products and services section of a business plan includes all details regarding your offerings. Mention the details of your ideal customer and include the features, ingredients, costs and dimensions of your products. Indicate if your product is designed for a specific purpose and specify where customers use it such as indoors or outdoors.

Give information on how your product fulfills customers needs and how they should use it. Include critical user instructions and the ideal usage frequency  that customers should follow while using your product.

Pricing Strategy 

Pricing strategy refers to the tactics you use to set prices for your products and services. Conduct a price analysis to help you determine the best pricing strategy that works best for your business model.

The first step of a pricing analysis is to determine the cost of goods sold which is calculated by adding all the expenses incurred before sale of a product such as labor costs, manufacturing, labeling, marketing, distribution and packaging costs.

You will then add a  profit markup to set the final price of your product. Secondly, collect data about the price preferences of your target customers to help you know their price sensitivity.

The third step is to study the prices of your direct competitors to help you understand the price range for similar products in the market currently.

The final step is to consider all the legal and ethical aspects of pricing to avoid practicing predatory pricing which entails setting a price that is too low to cut off competition.

Product Comparison

Product comparison entails comparing your products with those of your competitors by listing down similarities and differences. Categorize the information to qualitative and quantitative aspects. You will then determine the features and benefits of your product in relation to those of your competitors.

Product comparison helps you identify where you should make improvements on your products. It  as well helps in shaping future product development based on the needs of customers. 

Sales Literature

Sales literature refers to the informative promotional material you use to convince your customers to buy your products and services. Examples include brochures, newsletters, catalogs, price lists and customer testimonials.

List all the sales literature you use to market your products and services outlining briefly the information it conveys. Explain how your sales literature contributes to your sales for example selling your products and services directly on your website. 

Management of Orders

Management of orders covers the entire process from when a customer places an order, to the delivery as well as the after sales services. Explain how customers will order and buy products and detail your process of delivery.

Describe each step of the product order process and elaborate on how to execute a customer’s order. The steps involved in the order process include order placement, order processing, inventory picking, sorting, packing as well as shipping. Seamless management of your customers orders ensures that customers receive their products on time and in good condition hence building credibility of your business.

Delivery Requirements 

The element of delivery requirements entails what you need to deliver your products and services to customers. Mention the resources for delivery that you need which include equipment, vehicles and technology. For example, as a cafe business owner you will need kitchen equipment and an accounting system to provide services to customers.

Excellent service delivery helps your business to maintain customer loyalty which in return enhances the reputation of your business. With the right equipment, the quality of your products and services will be high as errors are eliminated.

Intellectual Properties

Intellectual properties refer to the intangible creations of the mind such as innovations and have legal protection from being used, distributed or sold without authorization by the owners. Include all intellectual property documents related to your products and services such as trademarks, permits, licenses and patents.

Mention any legal issues that you are facing currently and explain how you are dealing with them. Mention issues that you foresee occurring in  future and mitigating measures you will take to prevent them. Having Intellectual properties in the products and service section of your business plan helps inform investors of the opportunities available to your enterprise. 

Future offerings

The future offerings element discusses whether or not your business has the ambitions to increase the range of its products and services in future. Writing your future offerings  is a chance to impress your investors by informing them about your future products and services.

In the case where your future products are an extension of the current products, provide an outline of the improvements you will make. Clarify if the future offerings are in the development stage or ready for launch. To validate your ambitions for expansion, provide market research data that shows how the future offerings will be accepted in the market.

When is the products and services section of a business plan written?

The products and services section of a business plan is written  after the company description and before the market analysis section. The company description is a snapshot of who you are and what your business is all about.

The market analysis on the other hand provides evidence that there is a niche in the market that your business should exploit.

Other sections of a business plan include the executive summary, management and organization structure, marketing plan and operations plan. Additionally, a financial plan and the appendix are sections of a business plan.

Who writes business plans?

Business plan experts help in writing business plans. They possess experience and expertise crafting comprehensive business plans specific to your business niche.

Business plan experts take the time to understand the goals of your business, target market and competitive landscape. They then collaborate with you to incorporate your ideas into your business plan resulting in a plan that reflects your vision.

How much are business plan writers paid?

Business plan writers are paid between $ 2000 and $ 25000. However, the charges vary with factors such as the length of the business plan, experience of the writer as well as the size of your business.

Business plan writers will be paid  more for a lengthy  plan as well as that of a large business. A highly experienced business plan writer is paid more than a less experienced one.