Each section in a business plan has a specific purpose. Together, they can help an entrepreneur run their company.
While some sections focus on market opportunity, other aspects of your business plan must address potential challenges. One of these obstacles is competition and your competitors’ strengths and weaknesses. This information influences how you build your new product or encourages you to differentiate yourself from others.
Here are seven key steps that will help you create a comprehensive competitive analysis for your business plan.
1. Identify and list the competition
For your first step, research your competitors to better understand them. Your competition is any business or individual with a similar product or service. Your direct competitors probably serve the same target market you do. Stick to two or three competitors for the competitive analysis.
You can choose to list companies that are much larger or smaller than yours. But if you have many competitors, mainly focus on ones that are similar in size to you. These competitors might share some attributes with your company, like market share, business model, operational processes, or product/service.
2. Create a competitive overview
For each competitor, create an overview that describes the business. This overview should highlight attributes and features that make each organization a competitor. Use your own knowledge along with market research. Be descriptive yet brief. Consider including the business owner and their background too, if relevant or noteworthy.
3. Describe the competition’s target audience
You can see the type of customers a competitor has by looking at their marketing messages and content. Also think about the different segments your competition pursues as well as how they personalize their messaging to each segment.
Read all comments, feedback, reviews, and discussions that this audience has about each competitor. From what they say, you’ll be able to determine if your competition does or…