5 Steps Towards Creating a Strong Business Plan for Your Industry
- Business Ownership
When business owners come to me inquiring about a business loan, it’s important for me to gauge how much knowledge and experience they have of their industry. To me, comprehensive awareness of a business’ surroundings is one of the most crucial aspects of a business plan. I want to see that a customer can demonstrate a robust knowledge of their business’ industry and will be able to anticipate and react to changes accordingly in their market. The following five steps will help you define, understand and differentiate your business from others in the market place and help you refine or create a basic business plan, which is necessary to get a small business loan.
1. Define How Your Company is Unique in Your Business Plan
When you set out to write a basic business plan for a bank, you want to begin by defining your business. Don’t look for a one-size-fits-all type of business plan. Take some time to think about what your business is, what makes it unique, and how it fits within the current climate of its industry. Develop a deep knowledge of all aspects of your business, from price points to operations and everything in between.
You should be able to answer any question about your business without hesitation. What are your goals, and what obstacles do you have to overcome to reach those goals? Is there anything that sets it apart from other businesses that operate both within and outside of your industry? Are you typically paid in cash or credit? Do you rely heavily on technology and have to stay on top of the newest technological trends? Are some months busier than others? Whatever the case may be, leave no stone unturned when defining your business, because it will help you and potential investors understand where your business fits in its industry.
2. Compare Your Business to the Competition
Knowing and understanding what other companies are selling in your market is paramount to making sure your business stays relevant. Make a list of your main competitors and make sure you don’t forget about more specialized businesses who may cut into a portion of your business. For example: if you operate a sporting goods store, you should research smaller bicycle shops to make sure you have an idea of how big of a slice they’re taking from the pie. Once you have compiled this list, get to know them and who their customers are. Figure out what their impact on the marketplace may be and take note of what their strengths and weaknesses are. Find out how you stack up to them in terms of price, reputation, advertising, quality of service and products, and any other areas significant to your business. If your competition introduces a new, game-changing product, will you be able to show that you have the tools necessary to adapt? Going forward, you should keep a close eye on what your competition is doing, because they will be keeping a close eye on you.
3. Understand How Technology Impacts Your Business
There is no denying that the landscape of business functions has changed considerably in today’s modern world. It’s no longer a question of “if” your industry uses technology, but how much of an impact technology will have on your business. The impact will differ by your industry, so it’s important to know what the standard practices are in your field. For instance, if you run a small retail shop, your technology needs will be radically different than that of a large-scale manufacturer.
You should be able to demonstrate how you plan to incorporate technology into your company in comparison to the rest of your industry. Being on the cutting edge of technology in relation to the other industry participants shows a willingness to innovate and grow. Research software programs specialized to your field that will make your business operations run more smoothly and will simplify communication between your employees and to your customers. Another good idea is to talk to your bank to see what they offer for merchant services, online and mobile banking, bill pay, and any other service and product that will help you collect payments and pay your bills efficiently.
In a modernized digital age, you will also want to make sure that your customers can contact you online from their PC, tablet, and smartphone. It is estimated that 81% of shoppers will research large-scale purchases before entering a brick-and-mortar store, so your website may be your first point of contact with a customer, which will leave a lasting impression on them. Make sure it is attractive, user-friendly, and responsive to mobile devices. Putting money behind solid technological infrastructure is an investment that will surely pay off in the long run.
4. Figure out the Trends
It doesn’t matter what industry you’re in, it’s evolving. Technology does play a huge role in these trends, but there’s much more to it than that. Are the products or services you offer constantly changing to keep up with the consumer’s needs? How willing are you to research ways to be ahead of the curve and innovate your products ahead of your competition? A great way to stay well-informed on industry trends is to go online and subscribe to forums, blogs or LinkedIn groups that facilitate networking among industry peers from all around the world.
Demographic trends are a key aspect of conducting industry research. If you have a general idea of who is buying what you are selling, you should adjust your marketing and advertising to evolve around them. Social Media is a great tool to analyze customer behaviors and market your business, allowing you to target your customers by interests and demographics. This will let you hone in on your ideal customers more efficiently. Getting word out about your small business to the right people is crucial. What good is your product if nobody knows about it?
5. Outline Where the Opportunities Lie in Your Business Plan
Now that you know who you are, who your competition is, what tools will help you achieve your goals and what direction the industry is headed, it’s time to pull all of that together and formulate a strong business plan. This is where all of your diligent research will pay off. The business plan you put together should include the potential advantages your business has and the weaknesses you need to address. Let’s say, for instance, that your competition is selling to millennials at a higher rate than you are. At this point you should be able to know what the contributing factors are, and you should be able to demonstrate an action plan to turn the tables in your favor. Investigate solutions to any and all avenues that lead to an opportunity and you are sure to succeed.
The bottom line is, whatever your business might be, the industry climate will be a major determining factor in how your business progresses. When it comes time to create your business plan, following these steps to gain a better understanding of your industry will show any potential investors that you mean business.
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