Ten Questions to Ask When Writing a Business Plan Competitive Analysis

The competitive analysis of a business plan should include carefully researched data on your competitors. It is not enough to simply list your competition. You need to show how they operate their businesses and identify their strengths and weaknesses. You need to explain your strategy to gain the

1. Have I thoroughly listed all of my direct and indirect competitors? Missing a major player in the industry can reflect poorly on your business plan.

2. Have I done my homework and gathered accurate facts and figures on my competitors? Don’t be afraid to show strong competition.

3. What are the strengths and weaknesses of my competitors? Include both in your competitive analysis. Remember, their weaknesses may be your strengths.

4. What target markets are my competitors reaching?

5. Is there a segment of the market that my competitors are overlooking? This could provide a potential niche market for you.

6. Are there services that my competitors are not providing for their customers that I could provide?

7. How much of a market share can I anticipate?

8. Am I pricing goods or services competitively in regards to my competition? Make sure to explain why you are able to price higher or lower than your competition. Undercutting competition with price is not always favorable.

9. Do I have the finances required to build a business in a competitive market? The more competition you have, the longer it may take to become established in the market.

10. What is my competitive advantage?

Read "Twelve Tips for Doing Competitive Analysis" and "Make Your Competitive Analysis Stand Out in Your Business Plan" for more ideas on this subject.

The key to your competitive analysis is to differentiate yourself from your competition with a strength, or several strengths, that will attract customers. An unfortunate reality may be that there is too much competition from well-established, respected businesses for you to find or carve your own niche. It's better that you determine this while doing your competitive analysis than after spending a great deal of time and money on a business that cannot gain a competitive share of the market.