The Industry Analysis section of your business plan is where the research part is going to kick in. Describe your industry in detail: trends, completion and any long-term opportunities. Are you a product, service or both? What is the current state of the industry?
You can start with internet, government and industry trade association data to determine:
- Past and future (expected) growth
- Units sold
- Other benchmarks, processes, norms
Your business may fall under more than one industry and you will need information for all. If you are currently in business you should benchmark your company against the industry averages and norms. If your company is not in line with the industry, you should explain how and why.
What phase is your industry in? Your business plan should address the stage as it relates to potential growth, competition, standards, marketing, market share, products and customers. This will impact your product mix, positioning and marketing. The four stages are:
- New – high growth rate, increasing competition and no customer loyalty
- Expanding – high growth, shake-out of competitors, emerging market leaders and strengthening customer loyalty
- Stable – plateaued growth, entrenched competition, fixed market leaders
- Declining – minimal growth, decreasing competition, weakening customer loyalty
You will also want to discuss trends in your industry for:
- Seasonal swings; holiday spikes, summer lows
- Economic conditions; the good and bad (and ugly)
- Technology changes; improvements, obsolescence
- Regulation by government
How does the industry supply and distribution chain impact your business? Are parts and/or materials readily available? Can you easily get your finished goods to your customers? Describe potential issues and how you plan to overcome these obstacles.
And don’t forget! You should talk about how your business functions in your industry, how it can grow and your position in the market.
As always, feel free to contact me for questions or how to apply this to your business.