Sales funnels are the most important part of your business. Get an early glimpse into how they can help your business by reading this early draft excerpted from my Sales Funnel Bible book.
Over the years, I’ve read a lot of business plans. I’ve never seen one that included a sales funnel. It’s disappointing, since I see the sales funnel as the most essential aspect of the business.
True, you could probably piece together parts of the sales funnel by reading a business plan but it wasn’t obvious. Want to piece together the sales funnel of a business based on the existing business plan structure? You’d have to look in the Opportunity section of the business plan to see what need is being met. You’d have to look in the marketing and sales section to see some of the high-level marketing and selling ideas. You’d have to look in the offering section to see what the business was going to sell.
And that’s only part of the story: You wouldn’t see how each one connected to the other; you wouldn’t see how smooth the process was; you wouldn’t see how the numbers aligned with the effort; you wouldn’t see where the pitfalls might be.
Why make your business plan audience do all of that work when a simple sales funnel image posted near the beginning of your business plan can do so much for you. The sales funnel is a fast and easy way to explain your business at glance to others. By putting it front and center, your business plan shows how all the key pieces are integrated together to run the most important money-making system in your business!
I propose the following change to business plan outlines in use today: After an introduction, the very next section should be the sales funnel (perhaps even a one-page Sales Funnel Strategy Matrix or some other simple at-a-glance depiction of the sales funnel). In one simple image, the business plan reader gets a quick, high-level view of who the business’s target market is, how the business intends to reach this audience, and what the business will sell.
That initial image, or a brief overview that describes it, then becomes a sort of table of contents outlining the rest of the business plan – the plan would go on to describe each element of the sales funnel from top to bottom:
- The market need, opportunity, and target market, and projections
- The marketing methods and then the sales methods, including the messages, activities, and channels used at each step – in order, and with projections
- The product or service being sold, as well as monetization considerations (like paygates)
- Any follow-up or additional notes (such as an explanation of the evangelist program)
- Plans for future expansion
Of course there are other things to include in a business plan and those can come after. This is where you’d include your management team, competitive analysis, etc. The sales funnel can be shown again here, perhaps indicating the areas that each member of the management team is in charge of, and the competitive analysis can show a similar sales funnel picture but with competitor sales funnels depicted for comparison.
Then, in the financial section, the sales funnel could be shown again as a supplementary image in which key financials are added in to show the impact of income and expenses on the sales funnel.
And for venture capitalists and angel investors who read business plans: Insist on a sales funnel in the business plans submitted to you. And when you receive a business plan from a prospective investment, grill them about their sales funnel. Make sure they understand how all of the parts fit together – how their target market will be drawn into their funnel, what mindset evolutions will take place, and how those mindset evolutions will eventually turn into sales. Then ask about price – ensure that the price covers the cost of running the business now and the cost to investment in scaling up the sales funnel.
And when you see a business plan that includes only a sales funnel with a problem, use it as an opportunity to drill down. How many unviable businesses could have been passed over (instead of invested in) during the dot-com bubbles if a picture of a sales funnel at the beginning of the business plan prompted discussions about adequate monetization?
Use the sales funnel as a way to view the business, dissect it, analyze, and help you determine whether or not to invest.
This chapter is excerpted from an early draft of my book. Comments and constructive criticisms are welcome. Please be aware that the chapter content and chapter order may change by publication.