The Industry section of a business plan normally falls in the Business Overview section of a business plan, and is normally broken down into several sections: major players in the industry, the nature of the industry, any trends in the industry, and any government regulations that cover or relate to the industry. Most of this portion of a business plan is written after having thoroughly resarched these points. And where would you find these juicy tidbits of information? Start at your public library and talk to the reference librarian. If they don’t have the necessary information on hand, at least they’ll be able to steer you as to who does.
Overview of the Industry
First you’ll need to gather information about the general status of the industry in order to determine where your company falls within it. To do so, find the answers to these questions:
- How large is the industry that your business competes, or plans to compete in?
- What sectors does this industry include, and how are they defined in the marketplace?
- Which businesses play the largest ballgame in the relevant sectors and industry as a whole? Which suppliers? Customers? Distributors?
- What markets are important for this industry? Clients? Customers?
- What income projections are being made about this industry, and how has it fared financially in years past?
- What trends have affected, may affect, or are predicted to affect this industry?
- What are economists and industry watchdogs predicting in the future for this industry?
- What, if any, government regulations are there that affect this industry? Of those regulations, what hoops are there to jump through, and how much do they cost?
- What cultural, geographical, economic, demographic, cultural, and social factors affect this industry and your sector in particular? Which, if any, are potential stumbling blocks?
Your Company’s Position within the Industry
The next step of the industry section of a business plan is to determine how your organization does, or plans to fit, within your industry. Some questions to ask yourself:
- What products or services will your company sell?
- What is your company’s perceived USP (unique selling proposition)?
- What could potentially impede you entering into this industry and/or business?
- Who is your direct and indirect competition? (Found by doing a competitive analysis)
- How much market share do each of these competitors have?
- What is your company’s competitive advantage? (Also found by doing a competitive analysis)
- Who, or what, is your target market?
- How do you plan on keeping the bits and pieces of your business that are potentially patentable, copywritten or trademarked (and so forth) secretive?
How to Write the Industry Section of a Business Plan
After compiling all of this information, try to reduce the information into a short series of paragraphs that explains the crux of the industry, its history, what the future holds, and how your business will fit into the mix. Most industry sections of a business plan are no more than a page at most (unless it is a very complex industry that requires a lot of explanation for the layperson to understand).