The 3 Cs and 4 Ps – A Critical First Step in Business Planning

Proper Business Planning: The 3 Cs and 4 Ps – A Critical First Step in Business Planning

Any business venture that you plan to embark upon should go through the “3Cs and 4Ps” exercise. While at first you may think that you’re wasting your time, you’ll soon realize how incredibly valuable and insightful this exercise is. It may seem simple, but the “3Cs and 4Ps” exercise really allows you to think about a business venture in a structured way. Once you force yourself to really go through this exercise, you’ll realize how much you didn’t know about the business idea you had in mind.

Let’s review what the 3 Cs and the 4 Ps are. The 3 Cs are: Company, Customer and Competition. The 4 Ps are Product, Price, Promotion and Place (distribution). Here is a little more detail about each part of this exercise.

First, the 3 Cs:

Company: You first need to think about what type of company you plan to operate. What will it look like? What values will you aspire to? What is your company’s mission? Will it be a corporation, an LLC or a sole proprietorship? Where will it be located? What will you name it?  Basically, you need to think about anything that that defines the type of company you plan to run.

Customer: Next, you need to think about your target audience. What type of customer will most likely be interested in your product or service? What are the demographics? Where will they live? To what income brackets will they belong?

Competition: Last but not least, you really need to consider your competition. Believe me, if you leave this part out, you’ll get eaten alive. There’s a famous poker saying that sums this up nicely. It basically says that if you don’t know who the sucker is on the table, then it’s probably you. The same holds true in the business world. You need to know your competition very well. You need to learn how they operate, what marketing tactics they use, who their supplier’s are, what financial position they are in and anything else you can dig up.

Now the 4 Ps:

Product: This is where you define your product or service. If you’re selling something, then define exactly what it will do. But equally important, you need to define exactly what it won’t do. What will it look like? How will it be packaged? Will it need special certifications such as a UL listing?

If you’re offering a service, then the same applies. Your service needs to be really well defined. You need to clearly articulate what you do offer and what you don’t offer. If this is not clear, then you may fall victim to “scope creep” where customers will keep expanding the scope of what you had originally promised them.

Price: How will you price your product or service? If you are selling a product, what price can your target market pay? Do you have any pricing power? That is, if you’re a famous coffee house, then you may be able to sell coffee at higher prices then a local coffee shop.

If you’re offering a service, how will you charge for your work? Will it be hourly, fixed bid or some other combination? You will look much more professional if you can clearly define your services and your prices to a customer. You don’t want to look like you’re winging it during a sales call.

Promotion: How will you market your product? What advertising channels will you use? What social marketing strategies will you deploy? Will you consider pay-per-click advertising? Will you attend any trade shows? What is your marketing budget? What return on investment (ROI) do you want to achieve from the money you plan to invest in marketing?

Place (Distribution): How will you store and distribute your product? Basically, you need to figure out how you’re going to get your product from your supplier to your warehouse and then to your customer. What shipping methods will these steps require? Will you have a warehouse or will you use a public warehouse? Perhaps you plan to have everything drop-shipped for you so you don’t have to carry any inventory. What distribution channels will you use? Will you sell through distributors or are you planning on sell direct to your customers?

If you’re offering a service, then where will this service be offered? Will it be out of your office or in a coffee shop? Will it require you to go to your clients or will they come to you? What are the traveling costs associated with your service?

Conclusion: Trust Me, It’s Worth It. Just Do It!

I can’t stress enough how important the 3 Cs and 4 Ps are in the business planning process. In fact, you should start your business planning with this exercise. Remember that the 3Cs and 4Ps will continually need updating as your business grows and changes. It is what we call a “living exercise” so you need to come back to it often to refine your strategy and approach. The exercise may seem obvious, but once you start thinking about each step in the process, you’ll be amazed at how much more organized your business planning will become.


Business Consulting Services: If you’re a small business owner looking to start or improve an online business then let me show you how to benefit from my experience. I have helped several online resellers grow their businesses by developing an online strategy to sell on Amazon, eBay or any other marketplace. Call me at 310-574-2541 or email me at for a complimentary business review.

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