Coastal Business Strategies has helped hundreds of North Carolina Small Businesses and have written business plans on every imaginable business. One thing that every small business needs is a business plan. Whether you are in the beginning phases of starting a business, expanding a business or simply need to keep your business’ vision and goals in check, a business plan will help you. Writing a business plan can be a very overwhelming process for some people but we want to share a series that will go through each section of the business plan and discuss what to do and not to do in each section. You can use this business plan outline as a resource in assisting you when writing the business plan. Keep in mind the SBA states that it takes the average person around 400 hours to write a business plan and using as many resources as possible will only make your plan more accurate. Follow along in our series and be sure to CONTACT US if you need help in completing your business plan!
As we continue the series, more and more sections will be available to you. Have input, questions or need elaboration on a certain section? Comment or shoot us a message and we can help! Today we talk about Competition in the Business Plan and the 4 Major Parts.
How to Write a Business Plan – a Step-by-Step Outline
In this section of “How to write a business plan” we will be discussing the competition section. This is a very important section because you will learn what makes your competition successful and ultimately what you can do to be more successful. Researching and learning from your competitors mistakes and successes will drastically shorten your learning curve in the industry and increase your chances of success.
There are 4 major parts to your competition section:
1) Competition (Discussed here) – This is where you learn and analyze what your competition is doing.
2) Direct Competition (Future post) – Break your competition down to competitors who do exactly what you are planning on doing.
3) Indirect Competition (Future post) – Break your competition down to competitors who have a similar product or service to yours that ultimately takes some of your market share.
4) Strategic Alliance (Future post) – After analyzing your competition there may be opportunities for alliances among your competitors that could provide synergy.
In the initial competition section you will need to take several steps to lay out the necessary information:
1) What market or market segments your competitors serve.
Research your competitors and define their target market, why do they target a certain demographic and are they successful? Knowing your competitors target market will help you understand your target market better and offer insight as to why you or your competitors are targeting the right group of customers.
2) What competitive advantages your competitors offer.
Why are your competitors successful? What are they offering that other competitors are not and is it making them successful? Understanding your competitors “secret sauce” helps to define whether or not your new approach to the industry will be successful. In many cases you can learn a great deal about the industry by seeing other people’s successes and failures, this will greatly reduce your learning curve and ultimately save you time and money.
3) Why does your target market choose your competitors?
Looking at your most successful competitor why do you think customers choose them over other competition? Do they have a different marketing campaign, significantly different product or service, outstanding customer service, or is their location better? Once you define this, will your planned business be able to outshine your best competition, or will you need to rethink your proposed competitive advantage?
4) How does your business compare to your competitors?
Once you have a solid understanding of your competition and how they function how does your proposed business compare? Do you bring new ideas and offerings to the table? Will you be able to better serve your target market and at the same time get their attention and draw them away from your competitors? In many cases you will learn many different best practices from several of your competitors. The goal of researching this is to not only offer one thing that is better than your competitors but learn why each competitor excels in each area and combine them all into a new better business that excels in all areas.
We hope this section of the Writing a Business Plan series helped shed some light on writing your own business plan.