Competition
This section is devoted to analyzing the competition – whether the current competition, or potential competitors who will attempt to enter the space if the business is successful.
Key questions to answer:
- Who are the current competitors? What is their market share? How successful are they?
- What market do current competitors target? Do they focus on a specific customer type, on serving the mass market, or on a particular niche?
- Are competing businesses growing or scaling back operations? Why?
- How will your company be different from the competition? What competitor weaknesses can you exploit? What competitor strengths will you need to overcome to be successful?
- What will you do if competitors drop out of the marketplace? What will you do to take advantage of the opportunity?
- What will you do if new competitors enter the marketplace? How will you react to and overcome new challenges?
Competition answers the “Against who?” question.
Operations
Customers are necessary. Products and services those customers need are necessary. The next key step is to develop an operation plan to serve those customers while keeping operating costs in line to ensure profitability. The Operations plan should detail plans for research and development, processing, manufacturing, staffing, managing… in short, how to run the business on a day to day basis.
Key questions to answer:
- What facilities, equipment, and supplies will you need?
- Is research and development necessary, either for start-up purposes or as a part of ongoing operations, and if so how?
- What are initial staffing needs? When and how will you add staff?
- Who will you establish business relationships with (vendors, suppliers, etc?) How will those relationships impact your day to day operations?
- How will your operations change as the company grows? What steps will you take to cut costs if the company initially does not perform up to expectations?
Operations answers the “How?” question.
