Business Plan

Consumer Product Business Plan

Consumer product startups need to deal with unique challenges posed by the industry. A consumer product business plan deals with a number of issues that do not appear in the cyberspace, applications or Internet-related business plans. However, a consumer product business plan must also still contain important sections found in other business plans such as the product description, the need, business environment analysis, go-to-market and financial projections.

Development, production and distribution

Development – Development in the area of consumer products has similar characteristics to software products. Software product development requires programmers & UX / UI and consumer products require engineers & industrial designers.

Production – Consumer products use production process that are not needed for software products. Practices such as making production a unique & important focus in a consumer product business plan. Costs and production time are important parameters that have an impact on a company’s profitability. Production funding is one of the main issues for enterprises in the field of consumer products, as the payment for products arrive in most cases only after delivery.

Distribution and Transportation – As with all manufacturing processes, distribution and transportation pose challenges to projects in the field of consumer products. Consumer product business plans must include a description of the value chain and define which processes will be carried out within the company and which will be outsourced.

Market penetration

Ventures that develop consumer products need to finance inventory. Production is usually outsourced and the manufacturer puts constraints on the minimum amount of units that need to be manufactured. During the introduction phase, other than marketing expenses there are inventory and distribution expenses. These expenses significantly increase the budget required to jump-start activity and create difficulties in the process of financing and recruiting investors. One solution to this problem is mass financing platforms that allow the company to sell the product in advance directly to the final consumer without the need for distribution channels and finance inventory.

The marketing plan for innovative consumer products typically includes visits to exhibitions and working with distributors. An exhibition is a great place to make connections with retailers and distributors that will help you reach the end consumer.

Targo helps entrepreneurs build a strong strategy for the penetration process. We think that an effective penetration strategy is the ongoing success of the company. This approach allows startup to identify an attractive target audience and provide a tailored value proposition to the customers’ needs and strengths of the company. Our approach also enables the company to deliver the product to market while continuously adapting the product to the changes in the market based on extensive research.

Intellectual property IP

Some of the most common questions asked by investors is “Do you have a patent on the product?” “What will prevent competitors from copying the product?”. Start-ups in the field of consumer products and mature companies sometimes have to deal with these questions on a daily basis. One of the barriers to intellectual property theft is the right strategy.

Initially, patents were used to protect specific applications of an invention such as the main feature of a new product, manufacturing method, or a new service. Obtaining a patent was a way of decidedly preventing direct competition.

More recently, a strategic approach became more common. The strategic approach includes legal & technical information about the invention and the competitive environment that is used to determine which innovations should be protected and the best way to protect them. The recommended approach is to identify potential patent renewals (ie, those not eligible for a patent) with strategic value, and then seek patent protection for a broader interpretation. IP strategy is essential in order to build a proper business plan.

Competitive Advantage

Competitive advantage is an important part of consumer product business. In order to define it: market research and a competitor analysis must be done. You can achieve a competitive advantage by offering greater value to consumers. The consumer identifies quality products  with products that can deliver added value; this in turn creates  brand loyalty.

It is important to distinguish the competitive advantages of patents. A patent is a barrier to entry and prevents copying, but does not guarantee that the service provided adds value to the consumer. More than 90% of the patents have no commercial value. Before patenting, a business plan is needed to assess the degree of attractiveness of the invention to consumers and then build the correct IP strategy.


Consumer product business plan requires a different approach than building a business plan for application-based or medical device start-up. It should be ensured that the entity responsible for the construction of the business plan should have experience in the consumer products industry.