Making a Business Plan: 3. Competition Analysis
The most challenging section of writing a business plan is competition analysis. They must be researched before they can be analyzed.
Who is the local competition?
First, determine the competition in your area. You can do this by simply driving around the area and/or looking through a phone directory.
It will be important to determine the distance customers are willing to travel to purchase your competitor’s goods and services. Some businesses have other non-local competitors, such as mail-order companies.
Competition Analysis: What is the target market?
It is important to identify the market they are targeting and the benefits they provide. It is important to understand why customers purchase from them, as well as to collect information about their products or services, pricing, and promotions.
You can gather information by visiting a business and/or checking their website. A person can gather information about a company’s product and how they treat customers by visiting multiple businesses.
More sources of information
The company’s suppliers, vendors, and employees are good sources of information. Another great way to gather information is to attend a trade show where competitors exhibit.
Once you have gathered the data, it is time to analyze it. It is possible to identify a market niche by analyzing the offerings of competitors.
The purpose of this analysis is to determine and increase your competitive advantage. It focuses on the benefits that your business can offer that your competitor doesn’t, or won’t.
A business plan is an essential document for anyone commencing a new business, already in business and critical for anyone seeking funding from a venture capitalist. The business plan needs to be comprehensive, well thought and should contain sound business reasons.
A business plan is just part of the Business Success Programme. To find out more, book your free Discovery Meeting today.
