By Matthew Jenkin, Guardian Professional,
Experts share their advice on how to write the third part of the business plan, which focuses on the segments of the market you plan to targetSun Tzu, the ancient Chinese philosopher and military strategist, famously said: "If you know your enemy and know yourself, you need not fear the results of 100 battles." It might not be war, but a business plan which shows an understanding of your target market and competition is an entrepreneur's secret weapon. We asked the experts for their advice on how to write the 'marketing and competitors' part of a plan:
Carol Cheesman, principal of Cheesmans Accountants.Once you know your target audience you'll know how to market your business in a way that speaks to them. If you're looking to raise funds then you must be able to demonstrate this knowledge to your potential investors. Without it you won't convince them that your business idea is worth supporting. Familiarise yourself with your target audience – key characteristics, trends and the expected size of your audience. This is also useful when you come to the 'projected sales' section of your business plan.
Gus Sellitto, co-founder and managing director of specialist legal PR agency, Byfield ConsultancyThis part of the business plan is all about who you are going to sell to, what they need and who else is supplying the same goods or services as you. When it comes to competitors, one of the most useful tools is to identify the key success factors in your market – for example, price, rapid response, customer feedback – and rank them by importance. Rank how well you're doing (or could do) on these factors against two or three of your closest competitors. Once you have identified what your key success factors are from the customers' viewpoint, you can go on to identity key performance indicators and measure and monitor them.
John Davis, managing director of the Formations CompanyIt is simply not enough to be aware of your competitors, you must get to know them. You should understand their size, profitability and market share, and create a list of their products and services, pricing structure and how they attract customers. A competitor analysis grid is a good way to identify what makes your products and services unique. But it needs to be reviewed regularly. Whether it's weekly, monthly or quarterly, the key is to be consistently aware. Remember markets change all the time, and so will your competitors. New businesses will join your industry and existing businesses will adapt to changing markets. It is therefore important to treat market and competitor analysis as an ongoing project to be reviewed on a regular basis, allowing you to always stay ahead of the curve.
Goncalo de Vasconcelos, founder of crowdfunding platform, SyndicateRoomFirst rule – never say you have no competitors. As much as you may feel you are completely unique, there will be people out there doing something similar. This is your opportunity to not only highlight who these competitors are, but also explain why your product or service is superior to theirs. In fact, listing your competitors is far more beneficial to you at this point, because it is another opportunity to boast about your expertise. After you have identified your direct and indirect rivals, you need to be clear about who your target audience is. You are making a case for your relevance in the market so the more you can back this up, the better. Be detailed in your descriptions – consider including a pen portrait of your typical customer and ensure you are breaking down your target customers into socioeconomic groups.