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Guide to Writing a Business Plan – Part 4 – Environmental, Company and Competition Analysis

October 11, 2011

In Part 4 of our 8-Part Guide to Writing a Business Plan, we look at the environmental, company and competition analysis parts of the business plan.

5. Environmental Analysis

There are a number of environmental factors that can influence the behaviour of the market place affecting the consumers or the competition just as much as you.

To introduce the variables you consider important you can see how they will influence the decisions you have to make or the decisions the consumers make.

Environmental conditions to consider:

  • Economic
  • Cultural
  • Social
  • Technical
  • Legal
  • Demographic
  • Political
  • Religious

TIPS

  • Think about unemployment, average income, interest rate changes and technological advances in your field.
  • Analyse the socio-cultural changes in society.
  • Compile relevant information using newspapers, magazines, TV and the internet.

6. Company Analysis

This section is like a brief presentation of your company and its capabilities. The history, philosophy, installations, personnel and the financial situation and resources.

The main points to be highlighted are:

  • Management team
  • Company history
  • Technical capability
  • Products
  • Strengths and weaknesses
  • Strategic objectives
  • Infrastructure, offices, transport

Include some information on the capabilities of the company, how it is expected to work and the volumes it can handle.

TIPS

  • Be optimistic but realistic.
  • Emphasize the major strengths
  • Highlight the management team remembering that the potential investors are trusting them just as much as you with their investment.

7. Analysis of the Competition

Describe your competitors, their history, their resources, their products and services and how they operate in the competitive market place.

In the same way as you have analysed your company do the same for the competition, what are their capabilities, how do they operate and what volumes can they handle.

TIPS

  • It is very important that you understand your competitors in order to attack their market place, to defend against their moves to increase their share of the market or even to avoid them all together if appropriate.
  • Do not be worried about including information on the competition; there is room in the market place for everyone.
  • Include the differences between your business and the competition.
  • Be thorough.

Go to Writing a Business Plan – Part 5 – Marketing Strategy

Go to the Guide to Writing a Business Plan Index