If you plan to open a clothing store, you will compete with other clothing retailers in your area.
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Again, if you run a clothing store you also compete with online retailers, but there is relatively little you can do about that type of competition other than to work hard to compete in other ways: great service, friendly salespeople, convenient hours, truly understanding your customers, etc. Once you identify your main competitors, answer these questions about each one. And be objective. It's easy to identify weaknesses in your competition, but less easy and a lot less fun to recognize where they may be able to outperform you:.
While these questions may seem like a lot of work to answer, in reality the process should be fairly easy. You should already have a feel for the competition's strengths and weaknesses Keep in mind competitive analysis does more than help you understand your competition.
Learn from competitor strengths, take advantage of competitor's weaknesses, and apply the same analysis to your own business plan.
It can be tough to predict when and where new competitors may pop up. For starters, regularly search for news on your industry, your products, your services, and your target market. But there are other ways to predict when competition may follow you into a market. Other people may see the same opportunity you see. Think about your business and your industry, and if the following conditions exist, you may face competition does the road:.
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In general terms, if serving your market seems easy you can safely assume competitors will enter your market. A good business plan anticipates and accounts for new competitors. Our nearest and only competition is the bike shops in Harrisonburg, VA. Our next closest competitor is located over miles away.
The in-town bike shops will be strong competitors. They are established businesses with excellent reputations. On the other hand, they offer inferior-quality equipment and their location is significantly less convenient. We do not plan to sell bicycles for at least the first two years of operation. However, sellers of new equipment do indirectly compete with our business since a customer who buys equipment no longer needs to rent equipment.
Later, when we add new equipment sales to our operation, we will face competition from online retailers. We will compete with new equipment retailers through personalized service and targeted marketing to our existing customer base, especially through online initiatives. And so on A common mistake made by entrepreneurs is assuming they will simply "do it better" than any competition. Experienced businesspeople know you will face stiff competition: showing you understand your competition, understand your strengths and weaknesses relative to that competition, and that you understand you will have to adapt and change based on that competition, is critical.
And, even if you do not ever plan to seek financing or bring in investors, you absolutely must know your competition. Your ops plan should detail strategies for managing, staffing, manufacturing, fulfillment, inventory Fortunately, most entrepreneurs have a better handle on their operations plan than on any other aspect of their business. Operations plans should be highly specific to your industry, your market sector, and your customers.
Instead of providing an example like I've done with other sections, use the following to determine the key areas your plan should address:. What do you need to do? How will you get it done? Then create an overview of that plan to make sure your milestones and timeline make sense. Many investors and lenders feel the quality and experience of the management team is one of the most important factors used to evaluate the potential of a new business.
But putting work into the Management Team section will not only benefit people who may read your plan. Addressing your company's needs during implementation will make a major impact on your chances for success.
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Joe has over twenty years experience in the cycling business. A complete resume for Mr. Rouleur can be found in the Appendix. Mary was the U. Mountain Biking National Champion.
She worked in product development for High Tec frames, creating custom frames and frame modifications for professional cyclists. She also has extensive customer service and sales experience, having worked for four years as the online manager of Pro Parts Unlimited, an online retailer of high-end cycling equipment and accessories. For example, if you manufacture a product or provide a service and will hire a key skilled employee, describe that employee's credentials. Otherwise, include staffing plans in the Operations section.
One key note: Don't be tempted to add a "name" to your management team in hopes of attracting investors. If you don't have a lot of experience--but are willing to work hard to overcome that lack of experience--don't be tempted to include other people in your plan that will not actually work in the business.
If you can't survive without help, that's okay. In fact that's expected; no one does anything worthwhile on their own. Experience and reputation are great, but action is everything. Financial projections and estimates help entrepreneurs, lenders, and investors or lenders objectively evaluate a company's potential for success.
If a business seeks outside funding, providing comprehensive financial reports and analysis is critical. But most importantly, financial projections tell you whether your business has a chance of being viable--and if not let you know you have more work to do.
It's easy to find examples of all of the above. Even the most basic accounting software packages include templates and samples. You can also find templates in Excel and Google Docs.
A quick search like "google docs profit and loss statement" yields plenty of examples. Or you can work with an accountant to create the necessary financial projections and documents. Certainly feel free to do so While you don't need to be an accountant to run a business, you do need to understand your numbers But ultimately the tools you use to develop your numbers are not as important as whether those numbers are as accurate as possible--and whether those numbers help you decide whether to take the next step and put your business plan into action.
Some business plans include less essential but potentially important information in an Appendix section. You may decide to include, as backup or additional information:. Keep in mind creating an Appendix is usually only necessary if you're seeking financing or hoping to bring in partners or investors. Initially the people reading your business plan don't wish to plow through reams and reams of charts, numbers, and backup information.
If one does want to dig deeper, fine--he or she can check out the documents in the Appendix. While you may use your business plan to attract investors, partners, suppliers, etc Because ultimately it's your time, your money, and your effort on the line. Be as objective and logical as possible.
Sometimes even the best ideas are simply ahead of their time. Serve as a guide to the business's operations for the first months and sometimes years, creating a blueprint for company leaders to follow. Communicate the company's purpose and vision , describe management responsibilities, detail personnel requirements, provide an overview of marketing plans, and evaluate current and future competition in the marketplace. Create the foundation of a financing proposal for investors and lenders to use to evaluate the company.
As you map out your plan, you may discover issues or challenges you had not anticipated. Now let's look at the first section of your business plan: The Executive Summary. A brief description of products and services A summary of objectives A solid description of the market A high-level justification for viability including a quick look at your competition and your competitive advantage A snapshot of growth potential An overview of funding requirements.
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