How Do I Build A Competitive Business Plan?

Competitor Analysis - Keep it Real Failure to identify competitors in your business plan is a warning sign to potential investors or funding interests that:

• you've not done enough research,

• you haven't acknowledged the competition you face

• the market is not large enough to support any competition

When getting ready to face your competitor it's much more helpful if you acknowledge the realistic strengths and weaknesses of your closest competitors, and how you will address this fact, with your business model.

This also acts as evidence to the potential investor and funding interests - as mentioned above, "That the market is large enough to support a number of businesses." A perceived margin of safety is always, That there will be business available for the taking.

Even getting customers for your business depends on you understanding the competition. Competitive Analysis - Prove your barriers to entry In this part in your business plan which addresses competition, you must cover the area known as; "Competitive Barriers". Some businesses naturally have barriers that prevent upstart competitors from getting a peek see or a look in. Take the oil industry for example. The nature of the business is such that development costs are prohibitive and the licenses for exploring viable sites are already in the ownership of most of the oil major players. This acts as a significant barrier for anyone fancying to start up business in the oil industry. This does not mean that new companies do not start, rather: They are few and far between because the resources and expertise required to compete are very high and require expert knowledge and understanding of the industry. In your business plan you must identify exactly what the barriers of entry into your business are and knowing this, how you will prevent any actual or potential competitors from taking a large part of your customers away from you once your in business. Some examples of competition barriers include; no availability of prime sites (take supermarkets for example), legal restrictions, import duties, expensive plant and machinery, exclusive distribution licenses, etc. It is also important to consider the situation very seriously if you identify few or no barriers to entry. This may jeopardize the future growth or even the viability of your business. How could you make it more difficult for competitors to take your customers? What kinds of things could you do? Could you sign them up to longer term contracts for example? Can you protest legitimately at every planning application of new competitors etc?

Competitive Analysis - Demonstrate your advantage It is convenient whilst analyzing the competition, to turn the spotlight of analysis on yourself, and demonstrate how your competitive edge is truly razor sharp, to the point of being possibly even unfair.

Just Kidding! The typical kinds of assets that show strong competitive advantage include; patented technologies and processes, a proven management record of success, exclusive contracts with suppliers and customers that make it difficult if not impossible for competitors to compete on the same terms. The bottom line is, Think Strategically when ever you can!

Len D.

EMB FC