Here you will learn about how to conduct effective research on your industry to use in your business plan.
THE BASICS: THE DIFFERENCE BETWEEN A MARKET AND AN INDUSTRY
In the broadest sense, the market means anyone and everyone that will most likely purchase your product. This is different from the industry, which is the group of companies currently selling to your potential customers.
BARRIERS TO ENTRY
An important reason for conducting industry research is determining the barriers to entry. A barrier to entry is some particular force that makes it difficult for new companies to begin serving the market. Barriers to entry may be anything from governmental regulations to massive start-up costs.
While researching a particular industry, keep a careful eye out for recurring information and topics. If trade periodicals or other industry-specific materials frequently reference a particular issue and voice concerns about it, this will help you develop a clear picture of emerging trends in the industry and the market it serves. Trends suggest a particular direction the industry and market might take in the future, and represent an opportunity.
When including trends in your business plan, it is important to explain how particular trends may influence your value proposition and company. Trends may offer new opportunities to your business or may present threats in the future. Do not shy away from including a trend in your business plan if it may ultimately have a negative impact. Including potentially harmful trends demonstrates the thoroughness of your research and the honesty of your analysis.
If however you believe a particular trend will not have a significant impact (either positively or negatively) on your business model, then there is no need to include it. Extraneous information will only serve to unnecessarily lengthen your business plan and distract your audience from your message.
IF YOU REMEMBER ANYTHING, REMEMBER THIS…
Everything you find here is designed to help you write a better business plan. Take what you like, ignore what you do not. The most important thing to remember is that there is no single “right way” to write a business plan.