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New product launch business plan for starting your own business
Clueless on how to add a new product line to your enterprise? Well, adding a product line is not a simple process. It isn’t just hiring a few more people and acquiring additional equipment.
Establishing a new product line needs adjustments on all organizational levels, and your operational plan & strategic plan. It may require you to carry out marketing analysis and overall risk assessment again. And therefore, you require a comprehensive business plan to launch a new product no matter how established your business already is.
A good practice is to get developed a business plan online or by industry experts near you so that all features of the new product launch can be taken care of.
To help you fathom how a new product launch in the market is introduced we are providing a sample business plan guide adopted by NYC House Cleaners when they added construction debris cleanup to their services.
Executive Summary
2.1 The Business
NYC House Cleaners was a cleaning company founded in New York. The company was established in 2009 and in 2021, the enterprise owner decided to add a new product line and broaden his services to the city’s construction sector. In this sample, we will provide some segments of the business plan for launching a new product following which the owner successfully launched a new product.
2.2 Management of new product launch
Management of a new product launch is just as complicated and expedient as that of initiating a new startup. Only by properly following the steps for launching a new product can you ensure better management.
In this business plan for franchise, we will explain how to launch a product line and how to adjust all the segments of your previous business plan according to the new needs.
2.3 Customers of new product launch
The buyers (of your new product line) depend on the type of your basic business. In the case of NYC House Cleaners, they were contractors, construction managers, disaster management organizations, and construction firms.
2.4 Business Target
Presenting a new product, you would have certain fiscal and social expectations. In your business plan for a new product launch, it is expedient to pen them down so you can remain focused on achieving them.
The business targets of NYC House Cleaning are demonstrated in the graph below.
Company Summary
3.1 Company Owner
NYC House Cleaning is owned by Frank Max. Max is a Harvard graduate with a passion to provide unparalleled services to consumers and make profits.
3.2 Why the new product launch is being started
In almost 10 years, Max was able to strengthen the business working with which he started. To bring innovation, and explore more opportunities, he decided to launch a new product.
3.3 How the new product launch will be started
Step1: Create Business Plan New Product
The foremost step is to study as many business plans for new products as are available. They will help you understand the process for different types of businesses. After that, you should delineate launching a new product plan.
In case, you lack a professional business diploma or degree, you should consider hiring a business consulting firm to make for you a new product business plan sample. You can have a great deal of insight into what that plan would look like by reading this sample product business plan.
Step2: Execute the Plan
The second step is to execute and administer each part of your business plan. You have to recruit more people with qualifications that match your product specification. You will have to develop sales strategy and marketing strategy accordingly.
Step3: Use the Web
The forthcoming step is to make your consumers aware of the new product or service. Using the web and social media will be the best choice as your reach can grow multiple times using them.
Step4: Manage and Grow
After you have integrated the new product into all the business features, you will have to develop a brief strategy on how to grow your business even further by capitalizing on the new product.
| Start-up Expenses | |
| Legal | $110,000 |
| Consultants | $0 |
| Insurance | $19,000 |
| Rent | $20,000 |
| Research and Development | $10,000 |
| Expensed Equipment | $45,000 |
| Signs | $2,600 |
| TOTAL START-UP EXPENSES | $206,600 |
| Start-up Assets | $202,000 |
| Cash Required | $199,000 |
| Start-up Inventory | $32,000 |
| Other Current Assets | $230,000 |
| Long-term Assets | $245,000 |
| TOTAL ASSETS | $908,000 |
| Total Requirements | $1,114,600 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $206,600 |
| Start-up Assets to Fund | $908,000 |
| TOTAL FUNDING REQUIRED | $1,114,600 |
| Assets | |
| Non-cash Assets from Start-up | $1,142,000 |
| Cash Requirements from Start-up | $115,000 |
| Additional Cash Raised | $43,000 |
| Cash Balance on Starting Date | $32,000 |
| TOTAL ASSETS | $1,332,000 |
| Liabilities and Capital | |
| Liabilities | $17,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $45,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $62,000 |
| Capital | |
| Planned Investment | $1,114,600 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,114,600 |
| Loss at Start-up (Start-up Expenses) | $155,400 |
| TOTAL CAPITAL | $1,270,000 |
| TOTAL CAPITAL AND LIABILITIES | $1,332,000 |
| Total Funding | $1,114,600 |
Operational and Strategic Planning
Services of new product launch
When you have concluded which product or service you want to add, the forthcoming step is to thoroughly investigate how to launch a product line. For a systematic approach, you should discuss all the features of the new product in very specific terms in your business plan for product launch.
If you don’t know how that can be accomplished, you can study business plans for new products available online like this one. In this business plan sample for new product launches, we will explain what type of new products are usually added by enterprises.
- Extension of Service
Enterprises whose model is based on service provision usually extend the service line. This includes either providing the same set of services to other areas or increasing services on the list.
- New Product
This includes adding an entirely new product to your business. This needs a proper business plan sample for new product since the areas to consider are the same as they were when you launched your business.
- Product Mix
This category caters to the scenario when a startup entirely shifts its range of products.
- Changing Product Features
This includes adding new features or bringing innovation to an already existing product or service.
In this product business plan sample we will explain how NYC House Cleaners extended their services. You can also see the new arrangement and staff in the later segments of this product business plan example.
Marketing Analysis of new product launch
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Even if you have already carried out the flawless market analysis in your operational plan, you are required to do it again when making a marketing plan for the launch of new product. It includes understanding market statics and dynamics and taking them down in your business plan for the new product launch.
For micro-trends, you should include a portfolio of your business rivals, their offerings, services, and sales. In your new product marketing launch plan, you should outline how you can outperform your competitors. Macro trends such as interest rates and inflation can also impact your earnings profoundly, that’s why it is expedient to consider them as well in your marketing launch plan new product.
In this sample business plan for new product we will explain marketing steps to launch a new product. Based on your type of business, you may also benefit from business plan for video game or Mexican restaurant business plan.
5.1 Market Trends
In the United States, it is quite common for businesses to keep on adding new products and service lines. It is because technological changes are happening at a pace never witnessed before. Either it is needed to bring innovation to the service or product or drop the prior product altogether.
5.2 Marketing Segmentation
When you are marketing for launching a new product, you are actually adding customer segments to your business. To make sure you meet the new criteria, it is incumbent to mention the new consumer groups in your sample marketing plan for the new product launch. This will help you in reaching a wider audience as well as gathering best business ideas.
If you are marketing a new product launch, your consumer groups would depend on your niche. For instance, in the case of tobacco shop business plan, they will mostly be adults and seniors. If you make oyster farming business plan, they can be youngsters, teens, adults as well as seniors.
In this new product launch marketing plan example, we are listing a generic list of groups that can be your consumers for the new product.
5.2.1 Individuals
If you are a restaurant, a gym, or a service provider whose prior consumers belonged to individuals of all ages, your customer groups will likely remain the same.
5.2.2 Small Businesses
In case you run a business that offered services like hardware or software outsourcing, office management, office cleaning, and business consulting, then your consumers will mostly belong to small enterprises.
5.2.3 Large Businesses
Based on services, large and already established businesses can be a customer group as well.
5.2.4 Manufacturing Industries
If your new product line provides raw materials for manufacturing industries whether they deal in food, chemicals, or technical products, then your consumers will fall in this category.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Individuals | 19% | 25,000 | 30,000 | 36,000 | 43,200 | 51,840 | 10.00% |
| Small Businesses | 31% | 45,000 | 54,000 | 64,800 | 77,760 | 93,312 | 10.00% |
| Large Businesses | 26% | 35,000 | 42,000 | 50,400 | 60,480 | 72,576 | 10.00% |
| Manufacturing Industries | 24% | 29,000 | 34,800 | 41,760 | 50,112 | 60,134 | 11.00% |
| Total | 100% | 134,000 | 160,800 | 192,960 | 231,552 | 277,862 | 10% |
5.3 Business Target
By adding a product line, NYC House Cleaners intended to:
- Acquire a CSAT score of 90+ concerning the new product
- Make at least $55k in monthly profits by the end of the first five years
5.4 Product Pricing
NYC House Cleaners decided to keep the prices of construction debris cleaning in the same range as their competitors.
Marketing Strategy of new product launch
if you are presenting a new product, you have to look for marketing strategies for a new product launch so that your consumers learn about it. You can meet your monetary expectations from the new product only if you successfully carry out your product launch marketing strategy.
In this business plan for new product sample, we are providing NYC House Cleaners’ marketing strategy to launch a new product.
6.1 Competitive Analysis
- Our biggest competitive advantage is that we have built the name and reputation of our brand by providing excellent customer service during the past years.
- We have been in contact with enterprises and contractors who will hire us for professional cleanup.
- We are situated in a location where construction cleaning service is not offered by most startups.
6.2 Sales Strategy
- We will contact our target consumers by sending our sales executive and digital business cards.
- We will offer a 20% discount to our consumers for the first two months of our launch.
- We will promote ourselves through the web and social media.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Extension of Service | 1,500 | 1,590 | 1,685 |
| New Product | 2,500 | 2,650 | 2,809 |
| Product Mix | 1,200 | 1,272 | 1,348 |
| Changing Product Feature | 2,300 | 2,438 | 2,584 |
| TOTAL UNIT SALES | 7,500 | 7,950 | 8,427 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Extension of Service | $100.00 | $116.00 | $134.56 |
| New Product | $250.00 | $290.00 | $336.40 |
| Product Mix | $260.00 | $301.60 | $349.86 |
| Changing Product Feature | $220.00 | $255.20 | $296.03 |
| Sales | |||
| Extension of Service | $150,000.00 | $184,440.00 | $226,787.42 |
| New Product | $625,000.00 | $768,500.00 | $944,947.60 |
| Product Mix | $312,000.00 | $383,635.20 | $471,717.84 |
| Changing Product Feature | $506,000.00 | $622,177.60 | $765,029.58 |
| TOTAL SALES | $1,593,000.00 | $1,958,752.80 | $2,408,482.44 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Extension of Service | $35.00 | $38.50 | $40.43 |
| New Product | $120.00 | $132.00 | $138.60 |
| Product Mix | $130.00 | $289.00 | $335.00 |
| Changing Product Feature | $100.00 | $110.00 | $115.50 |
| Direct Cost of Sales | |||
| Extension of Service | $52,500.00 | $61,215.00 | $68,132.30 |
| New Product | $300,000.00 | $349,800.00 | $389,327.40 |
| Product Mix | $156,000.00 | $367,608.00 | $451,687.20 |
| Changing Product Feature | $230,000.00 | $268,180.00 | $298,484.34 |
| Subtotal Direct Cost of Sales | $738,500.00 | $1,046,803.00 | $1,207,631.24 |
Personnel plan of new product launch
For putting forward a new product, you need to have a team that is acquainted with the new production procedure. While drafting your business plan for launching a new product, you should clearly define the personnel you would require to carry out additional responsibilities.
In this business plan sample for a new product, we are providing the general staff that you can need to hire to incorporate a fresh product line. You may need to hire more people according to the product specification and adjust your business plan to launch a new product accordingly.
7.1 Company Staff
- 1 Operation Manager to manage the distribution
- 1 Social Media Manager to make the product known
- 1 Sales Executive to reach out to enterprises
- 1 Web Developer to develop a website for a new product launch
- 1 Customer Care Executive to assist consumers with the new product
- 1 Business Strategy Consultant to help integrate the new functionality
- 2 Technical Assistants
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Operation Manager | $33,000 | $36,300 | $39,930 |
| Social Media Manager | $24,000 | $26,400 | $29,040 |
| Sales Executive | $23,000 | $25,300 | $27,830 |
| Web Developer | $20,000 | $22,000 | $24,200 |
| Customer Care Executive | $15,000 | $16,500 | $18,150 |
| Business Strategy Consultant | $30,000 | $33,000 | $36,300 |
| Technical Assistants | $20,000 | $22,000 | $24,200 |
| Total Salaries | $165,000 | $181,500 | $199,650 |
Financial Plan of new product launch
Even if you had done accurate fiscal planning for your enterprise at the initiation time, you will need to still do it again to incorporate the new product. A new product launch will have its risks, investments and profits associated. To make sure you can generate profits and strengthen your business by putting forward the new product, it is expedient to renew financial planning in your business plan for a new product launch.
Sometimes, financial planning for a new product line is considered more complex than the one for a startup. It is because, for the new product launch, you have to carefully analyze if and how you can use your prior resources to build manpower and funding for the new venture.
In this new product launch business plan template, we are documenting the financial plan of NYC House Cleaners. These segments are taken after Max had incorporated revised figures for the product launch in his new product launch business plan.
If you are looking for legal assistance or document destruction business plan, you can have a general idea from here.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.11% | 8.22% | 8.26% |
| Long-term Interest Rate | 8.26% | 8.25% | 8.47% |
| Tax Rate | 23.52% | 24.23% | 24.60% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5329 |
| Monthly Revenue Break-even | $129,500 |
| Assumptions: | |
| Average Per-Unit Revenue | $231.00 |
| Average Per-Unit Variable Cost | $0.62 |
| Estimated Monthly Fixed Cost | $161,420 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $16,002,000 | $19,676,059 | $24,193,682 |
| Direct Cost of Sales | $15,642,600 | $18,278,958 | $20,599,717 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $15,642,600 | $18,278,958 | $20,599,717 |
| Gross Margin | $359,400 | $1,397,101 | $3,593,965 |
| Gross Margin % | 2.25% | 7.10% | 14.85% |
| Expenses | |||
| Payroll | $165,000 | $181,500 | $199,650 |
| Sales and Marketing and Other Expenses | $120,300 | $148,000 | $156,000 |
| Depreciation | $2,200 | $2,350 | $2,500 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,700 | $3,000 | $3,100 |
| Insurance | $1,900 | $2,100 | $2,100 |
| Rent | $2,500 | $2,600 | $3,200 |
| Payroll Taxes | $13,000 | $15,000 | $18,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $307,600 | $354,550 | $384,550 |
| Profit Before Interest and Taxes | $51,800 | $1,042,551 | $3,209,415 |
| EBITDA | $51,800 | $1,042,551 | $3,209,415 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $10,360 | $208,510 | $641,883 |
| Net Profit | $41,440 | $834,041 | $2,567,532 |
| Net Profit/Sales | 0.26% | 4.24% | 10.61% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $52,000 | $56,160 | $60,653 |
| Cash from Receivables | $23,000 | $24,840 | $26,827 |
| SUBTOTAL CASH FROM OPERATIONS | $75,000 | $81,750 | $88,290 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $76,000 | $82,000 | $89,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $43,000 | $46,000 | $48,000 |
| Bill Payments | $21,000 | $22,000 | $23,000 |
| SUBTOTAL SPENT ON OPERATIONS | $64,000 | $68,000 | $71,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $64,000 | $69,120 | $74,650 |
| Net Cash Flow | $20,100 | $22,500 | $23,600 |
| Cash Balance | $26,510 | $27,000 | $29,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $255,000 | $285,600 | $314,160 |
| Accounts Receivable | $23,000 | $25,760 | $28,954 |
| Inventory | $4,200 | $4,704 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $278,000 | $311,360 | $349,969 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $18,200 | $20,384 | $22,932 |
| TOTAL LONG-TERM ASSETS | $23,200 | $25,984 | $29,232 |
| TOTAL ASSETS | $291,200 | $326,144 | $366,912 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $17,500 | $19,600 | $22,030 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $20,000 | $22,400 | $25,178 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $14,200 | $15,904 | $17,876 |
| Paid-in Capital | $29,000 | $30,000 | $31,000 |
| Retained Earnings | $51,000 | $55,590 | $61,149 |
| Earnings | $191,000 | $208,190 | $229,009 |
| TOTAL CAPITAL | $284,000 | $309,560 | $340,516 |
| TOTAL LIABILITIES AND CAPITAL | $298,200 | $326,144 | $366,912 |
| Net Worth | $289,000 | $315,010 | $346,511 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.23% | 8.01% | 8.88% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.20% | 10.19% | 11.29% | 9.80% |
| Inventory | 5.26% | 5.83% | 6.46% | 9.90% |
| Other Current Assets | 2.13% | 2.36% | 2.61% | 2.40% |
| Total Current Assets | 148.60% | 149.00% | 152.00% | 158.00% |
| Long-term Assets | 11.56% | 11.58% | 12.01% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.88% | 4.92% | 4.96% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.54% | 7.60% | 7.67% | 7.38% |
| NET WORTH | 100.41% | 101.21% | 102.14% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 93.25% | 95.77% | 98.45% | 99.00% |
| Selling, General & Administrative Expenses | 92.35% | 94.84% | 97.50% | 97.80% |
| Advertising Expenses | 1.49% | 1.53% | 1.57% | 1.40% |
| Profit Before Interest and Taxes | 40.26% | 41.35% | 42.50% | 33.90% |
| Main Ratios | ||||
| Current | 34 | 35 | 36 | 32 |
| Quick | 32.2 | 33 | 33.825 | 33 |
| Total Debt to Total Assets | 0.18% | 0.18% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 73.26% | 74.03% | 74.50% | 75.00% |
| Pre-tax Return on Assets | 95.50% | 100.28% | 105.29% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 32.15% | 33.15% | 34.17% | N.A. |
| Return on Equity | 54.23% | 55.91% | 57.64% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 33.12 | 34.776 | 35 | N.A. |
| Accounts Payable Turnover | 15.26 | 16 | 16.3 | N.A. |
| Payment Days | 26 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.5 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $237,000 | $250,272 | $264,287 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.86 | 0.87 | 0.88 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 29 | 29.11 | 29.13 | N.A. |
| Sales/Net Worth | 2.1 | 2.2 | 2.2 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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