26 | HOW TO WRITE A BUSINESS PLAN
businesses, depending on the skill.
The end product of a service business
is normally some sort of advice or the
completion of a task. Occasionally, a
service business sells products as an
ancillary function. For example, a baby
diaper cleaning service may also sell
diapers and baby accessories. Service
business customers normally come
from repeats and referrals. It’s common
to have to meet state licensing
requirements.
Hairdressers, carpet cleaners, con-
sultants, housecleaners, accountants,
building contractors, and architects are
examples of service businesses.- Manufacturing. Manufacturers assemble
components or process raw materials
into products usable by consumers or
other businesses. This type of business
ranges from an artisan who makes craft
items to Toyota. The most difficult part
of the manufacturing business is to find
a product, or even better, a series of
products, that have acceptance in the
marketplace and generate a steady sales
volume. Or, as one businessperson put
it: “Production without sales is scrap.” - Project development. Developers
create and finish a saleable com-
modity by assembling resources for
a one-time project. Normally, the
developer knows the market value of
the finished product before she begins
work. When the project is complete,
the developer sells her interest in the
project, normally directly to the user or
consumer.
To understand project developers,
consider a woman building a single-
family house on speculation. She
buys the lot, secures permits, hires a
contractor, gets a loan, builds a house,
and sells it. She is then ready to go on
to another project. Other examples of
project developers include someone
who buys, restores, and sells antique
cars and someone who purchases
dilapidated buildings at a bargain
price, fixes them up, and sells them.TiP
Software development note: Soft ware
development differs from soft ware production
and sales in that software developers create
a product that another entity produces and
markets. For example, Fred Jones creates a
bookkeeping program for employment agencies
on his own time. Then he sells or licenses
production and marketing rights to the Acme
Programs Co. for $1,000 cash and 5% of future
sales. Fred is the project developer and Acme is
the manufacturer. If Fred also produces copies
and markets them himself, he acts as both
developer and manufacturer.