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Management Information |
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Industry Analysis Section of Your business plan
Writing a Business Plan for your next entrepreneurial endeavor is crucial. You will need sufficient capital and a guide to keep you on track. One important part of any business plan is to size up the Industry and attempt to figure out your pecking order and specialty niches for your best chances of profitability. Having written more business plans than I care to admit and having read hundreds of others, it always amazed me how easy it was to attempt to "wing it" when it came to the Industry Analysis section. You know read a trade journal and look at a graph put it into Microsoft Excel and shove it into the business plan. If you have done this or are tempted to, you are not alone. But let me warn you that the Industry Analysis section is crucial. As a serial entrepreneur I have had some great successes and victories in the market place and of course as Babe Ruth will tell you, some strike outs also. You must know the truth and understand the trends of your Industry to properly position yourself for the stage win. This is why Lance Armstrong has a whole team to cover for him as he rides into the record books. You must know your competition, the course and have a clear strategy to be successful in business and it all starts with your business plan. Now then without sounding like an academic, which I am not, nor do I posses a fancy diploma or have the letters MBA next to my name; let me show you a sample of an Industry Analysis. I want you to win, so copy this article and slightly modify the sample below to fit your particular business model while covering paragraph by paragraph in your own work exactly the state of your Industry Sector. Identify the trends and niches which are currently being exploited, as well as those things you are worried about and/or know will be your challenges. Take a red pen and write in the margins and then when you think you are ready and have collected the data online and read every single thing you can find on your industry, then take all your notes and formulate your own Industry Analysis, as it is one of the most essential elements of your business plan. This sample is for a mobile car wash business of a franchise company and it is a simple business, your industry may be more complicated, but this serves as a good example for you to get started. - - - - - - - - - - - - - - Industry Analysis: Trends As more and more people are buying or leasing cars for three to five years, which cost $30,000 or more, they have to maintain them. After all, why would you lease a brand new beautiful Lexus or BMW to keep up with the Jones', if you are not going to keep it washed. The automobile is a status symbol in California now more than ever. It is so important to people that they will mortgage their house in order to own the car they want. In California there are over 25 million vehicles. That's 1.2 cars, boats, trailers, trucks, R.V.'s, motorcycles, etc. for every man, woman and child. A car wash truck can wash 100 cars a day, 700 cars per week. Seven hundred cars per week is less than 2% of the average population of 40,000 for a California city. That percent of market penetration is two out of one hundred people. Obviously, at least one out of every ten people would like to have their cars washed on a weekly basis. That would be ten percent market penetration or 4,000 vehicles per week or six car wash trucks per area. This is achievable. Position for Growth With personal services on the rise and community owned businesses (mom and pop shops) making a strong comeback, this is a perfect time to open a mobile car wash business. There is also a growing trend of two bread winner families, creating less personal time. During recession periods, our crews will be less affected than other competitors because we go to where people have jobs. These people have money. People eventually have to get their cars washed and we are already there. Many fixed site car wash customers switch to a mobile service to save the extra one to two dollars because our prices are consistently lower. During recessions people hold on to their cars longer and have to keep them up as they are not able to buy a new car as often. During an economic expansion more customers sign up for monthly services and fleet sales double. Due to our lower overhead and efficiency our business, like McDonald's, is reoccurring. Cars get dirty every week, just like people keep getting hungry. Our society is filled with credit card users. Our business plan calls for one-third of all generated sales to come from these customers. Fifty-five percent of all monies borrowed in the United States are done so by credit card. The number has increased for ten years and now with everyone using credit cards on the Internet in virtual stores this trend will continue over the next decade. Customers are able to order car wash services through our web site http://www.carwashguys.com. Check it out sometime. This is another service that is provided for by our franchisor. Our site is easily found on most major search engines such as Google, MSN and Yahoo. "Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs
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