Service Business Plan: Differences From A Product Business Plan
When creating a service business plan, either start with a business plan template
created specifically for a service business to save time and worry, or take great care to adjust the plan to be appropriate for a service rather than a product. These are a few elements of the plan that will require changes.Terminology
Certainly, a plan with focuses on product, product design and product development must have those terms adjusted. Within the marketing section, place is often discussed as one of the 4 Ps (product, promotion, price and place). In a service business plan, place should refer to both the location where the service will be delivered to customers (whether this is a physical location or a website) and the methods of delivery (such as sales by phone, over the internet, in person, etc).
Inventory
For a pure service business, there generally is no inventory. The product of service is created at the same time as it is consumed. For that reason, operations management terms like inventory management do not apply. Mentions in the balance sheet of inventory may need to be removed to show that you are focused on a service business and demonstrate that you are not using a cookie cutter financial model (even if you did start out with a model template).
Exit Strategy
When a pure service business is designed around the work of the entrepreneur (for example, a consulting or brokerage business), exit strategy as it normally exists in other plans becomes more challenging. This is because the exit strategy for many small businesses is a strategic sale of the company to a larger business that values its resources. However, if most of the key resources of the business are in the entrepreneur, larger businesses would rather hire the entrepreneur away than buy the business itself. In this case, the entrepreneur may profit to a certain extent, but value does not flow to investors to provide them a return for the capital they put in. Take this into account and either show other assets being developed in the company (i.e. proprietary systems) or consider a different type of exit.
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