“Successful people do what unsuccessful people are not willing to do. Don’t wish it were easier; wish you were better.”
~ Jim Rohn
When developing the competition section of your business plan, companies must define competition correctly, select the appropriate competitors to analyze, and explain its competitive advantages.
To start, companies must align their definition of competition with investors. Investors define competition as any service or product that a customer can use to fulfill the same need(s) as the company fulfills.
This includes firms that offer similar products, substitute products and other customer options (such as performing the service or building the product themselves). Under this broad definition, any business plan that claims there are no competitors greatly undermines the credibility of the management team.
Include the following information in your plan for each competitor:
- Competitor’s Name
- Overview of Competitor (where are they located; how long have they been operating)
- Products/services offered
- Customer segments/geographies served
- Competitor’s key strengths
- Competitor’s key weaknesses
Perhaps most importantly, the competition section must describe the company’s competitive advantages over the other firms, and ideally how the company’s business model creates barriers to entry. “Barriers to entry” are reasons why customers will not leave once acquired.
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Today’s Question: What company is both the oldest corporate enterprise still in existence and the largest corporate landowner in history?
Previous Question: How did secure, relatively high-yielding stocks get to be called blue chips?
Previous Answer: Poker Games.
The term was taken from the game of poker, where blue chips are more valuable than white or red chips.
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