276 Planning and Forecasting
three Super Bowl ads).^5 Resource-constrained entrepreneurs need to care-
fully select the appropriate strategies. What avenues most effectively reach
your PTA (primary target audience)? If you can identify your PTA by names,
then direct mail may be more effective. Try to utilize grassroots techniques
such as public relations efforts geared toward mainstream media. Sheri Poe,
founder of Ryka shoes, geared towards women, appeared on the Oprah Win-
frey show touting shoes for women, designed by women. The response was
over whelming. In fact, she was so besieged by demand that she couldn’t sup-
ply enough shoes.
As you develop a multipronged advertising and promotion strategy, create
detailed schedules that show which avenues you will pursue and the associated
costs (see Exhibits 9.9a and 9.9b). These types of schedules serve many pur-
poses including providing accurate cost estimates that will help in assessing
how much capital you need to raise. These schedules also build credibility in
the eyes of potential investors since it shows that you understand the nuances
of your industry.
Sales Strategy
This section provides the backbone that supports all of the above. Specifically,
it illustrates what kind and level of human capital you will devote to the effort.
How many salespeople, customer support staff, and the like do you need? Will
these people be internal to the organization or outsourced? Again, this section
builds credibility if the entrepreneur demonstrates an understanding of how
the business should operate.
Sales and Marketing Forecasts
Gauging the impact of the above efforts is difficult. Nonetheless, to build a
compelling story, entrepreneurs need to show projections of revenues well into
the future. How do you derive these numbers? There are two methods, the
comparable method and the buildup method. After detailed investigation of
EXHIBIT 9.9a Advertising schedule.
Promotional Tools Budget over 1 Year
Print advertising $1,426,440
Television advertising 780,000
Sales promotions 100,000
Direct marketing 100,000
Public relations 93,560
Total $2,500,000