Analyzing Your Competitive Landscape
Every business plan should include a comprehensive overview of your business’ marketplace competition. Competition means there is a market for your business and, despite what some may argue, it’s healthy to have one or more competitors. Any business that provides a similar service or product in the same region may be viewed as a primary or secondary competitor. Your business needs to highlight and build upon the weaknesses of its competitors to increase its profitability and market share. The following provides a step-by-step process in creating your competitive analysis.
Identifying competitors: One easy way to locate competitors is to use a Google or Yahoo! map. Enter in your business’ proposed or existing address and search for nearby businesses of a similar category. For example, if you’re opening a pizzeria, you can search “pizza shops” or “pizzerias” in the same zip code or city. Through this easy process, you’ve identified potential competitors. If your business operates in a niche industry, the best way to identify competitors is to leverage established contacts and web research.
Understanding your competition: Now that you have identified your top competitors (aim to analyze at least two direct competitors), it is necessary to learn everything about these companies. What do I mean? Visit their website; call the business directly to learn more about the way they operate or what they sell; physically go to the competitor’s place of business; and research customer reviews. The latter step can be implemented by simply typing in “customer reviews of XXX” in your online search bar. Also, these reviews usually are posted on websites such as Yelp.com and CitySearch.com.
Pointing out their weaknesses and strengths (eloquently): Lesson to be learned – no bashing on competitors; it is unprofessional and makes your business look worse. When I say bashing, I mean using expressions such as “they suck” or “they have no customer assistance.” Every company has some element of customer service, so a statement like that is literally untrue. Now, the competitor may lack quality customer service, and such an observation would be a much more acceptable approach in pointing out a weakness in a business. When I am writing a competitive analysis, I always include one to two strengths and two to three weaknesses of each competitor.
Your competitive advantages: Ah, finally, we’ve reached the point of emphasizing your strengths. Truly use this section to emphasize why you’re a better business in a bulleted format (preferred) and include a few statements in paragraph form about how you intend to surpass your competition. Examples include greater industry knowledge, lower prices, friendlier and more attentive staff, larger inventory of products, and so forth. Your best bet is to underscore your own unique competitive edge that cannot be argued. Voila, you’ve completed your competitive analysis.
This is a Guest Post by Ellen Arndt, Director of Marketing and Research Writing for EPIC Business Planning.
Your Startup Business Plan: It’s Not An Option
Well, we are less than a couple of weeks into the transition of stepping into the driver’s seat here at Blogtrepreneur. So far, we are on track to attaining all of the goals we have set out to accomplish within the first month. One of the major goals was to begin the re-branding and re-juvenation of Blogtrepreneur. You are currently looking at what we feel to be the New & Improved layout and design of Blogtrepreneur.com and as you have noticed we are also posting fresh and timely posts 5 days per week! This has all been part of our mini-business plan that my brother and I put together prior to acquiring Blogtrepreneur.com, therefore we felt it may be perfect timing to share a quick overview of the mini-biz-plan.
Starting up a new business is challenging enough without going into it blind. A startup business plan is not just intended to persuade prospective investors or lenders; it is a vital tool for creating your game plan and helping you avoid costly mistakes.
When you’re in the trenches of starting up a new company, it can be difficult to stay focused on the big picture. We know this quite well as we juggle several business ventures both online and offline! New issues will crop up daily requiring quick decision-making that can affect the overall growth and success of your company–now and in the long run. A business plan takes your company’s mission and expands on it, giving you a set of logistics for getting it done. We often look at our mini biz plans as roadmaps and following them helps us avoid missing our exits on the business super highway!
If you haven’t written a business plan before, you don’t need to worry. It isn’t as daunting a task as you might think. Depending on the size and scope of your business, it can be a short document that lays out the basic who, what, when, where, why and how of your business. Even if you are just starting your own blog, it can really help you stay on track if you outline some of the goals that are important to you. Sometimes my brother and I have found it quite helpful to keep an evolving biz plan that allows us to update as needed. Any good business plan will have the following sections:
Executive Summary
A concise, powerful summary of your entire business plan; one or two paragraphs are all that is needed.
Company Description
This is your chance to ’sell’ your concept to the reader by providing a detailed explanation of what your company will do.
Industry Analysis
Writing this section will force you to do some much needed homework and look at your business as part of the ‘big picture.’
Market & Competition
Again, you’ll need to research where your company fits in the overall marketplace and discuss how you will compete against similar companies. This is where you will talk about you ‘edge’ over other companies, and what sets you apart from them.
Goals
It’s foolish to start a business without a set of guide posts to measure your successes. Setting goals will help you stay focused, and it will provide your investors, employees, and partners with tangible results that can reassure and inspire them.
Products/Services
This section is where you describe how you plan to generate revenues. This is what you are ’selling’ to your customers, and it needs to be measurable, marketable, and have an obvious value.
Marketing and Sales
You may have the greatest product in the world, but if you can’t convey it to the public, you will never make it off the ground. Your marketing and sales strategy should show that you have a good idea what your customer’s needs are and how to talk to them in a way that will elicit a positive response.
Management
Discuss the individuals responsible for running the business, clearly defining their roles, responsibilities, and the qualities that make them valuable to the company.
Operations
This is a description of your day-to-day operations and what it takes to make your business operate at an optimal level.
Budget
This should be a clear, thorough operating budget that covers all aspects of running the business. It should cover, at a minimum, one year of operations; but ideally five years.
Financial Requirement
A summary of how much startup capital is needed from your investors or partners. Be as frugal as possible but not unreasonably so. If you need something to run your business, don’t leave it off just because you are afraid of asking for more money. On the other hand, do you really need a Mercedes Benz to transport your clients around? Remember, a savvy investor wants to see that you can be wise with money.
Appendices
This is a collection of supporting documentation that your reader can refer to. It can include charts, projections, market reports, and even pictures of the products you plan to sell.
Regardless of the size of your business, you should cover all of these subjects in your business plan. If you are unfamiliar with some of these concepts, take a couple weeks to read up on them and at least grasp what they mean for your particular business. Part of being successful means being able to learn at every stage of the game; even long-time executives make it a point to stay up on new information, so you might as well get used to it now.
For some excellent pre-startup reading, I recommend the following books:
Start Up Your Own Business by Rieva Lesonsky
Entrepreneur’s Notebook: Practical Advice for Starting a New Business Venture by Steven Gold
Writing a Convincing Business Plan by Arthur DeThomas Ph.D.
