Writing Your Business Plan: Part III - Industry Analysis

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
• Revenue
• 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:

1. New - high growth rate, increasing competition and no customer loyalty
   
2. Expanding - high growth, shake-out of competitors, emerging market leaders and strengthening customer loyalty
   
3. Stable - plateaued growth, entrenched competition, fixed market leaders
   
4. 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.

Part II: Your Company

If you downloaded the business plan outline and have completed your bio, you will see that we are not going in order. That's because I want to get you rolling on the easy stuff and not to get you overwhelmed early in the game.

Next we are going to tackle your business description:

• Company name
• Business concept: your products and services
• Type of entity: corporation, limited liability company, sole proprietor, partnership
• Business location: where you will operate
• A history of the company until this point
• Milestones achieved to date
• Licensing, bonding and other requirements
• Mission statement (more below)
• Management: owners, board of directors, key players/investors
• Financial status: a brief idea of where you are at now

Keep it general, use business terms and language to convey success without seeming too "great," "excellent," or "best. "

A mission statement provides a focus for your company and should cover your basic objectives, goals, values and philosophy. It should be no more than a few sentences but speak to the deeper purpose of the company and used as a guide for how you want your company viewed. My company's mission statement can be used as an example:

"Huckleberry Resources is committed to providing assistance to small business owners in facilitating personal, professional and organizational growth through business planning, coaching, marketing and graphic design. The company is not interested in becoming the largest by volume or sales but providing the best service at a good value – on time and on budget. Maintaining integrity with pricing structure and fair billing practices, the goal is to sustain the financial wellbeing of the owner."

Next up- Part III: Industry Analysis