Business Plans: Writing the Business Plan

Business Plan: The Opportunity, Industry & Market

A guide on how to write the opportunity, industry and market analysis sections of your business plan.

By Greg Fisher

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The Opportunity, Industry & Market (2 - 3 pages)

This section of the business plan requires that you communicate some of the insight that you got into the industry, the market and the opportunity from the systematic research you conducted before writing the business plan.

a) The Opportunity

Describe the gap that exists in the market and explain what has given rise to this gap, how it was identified and how it can be filled. Answer the following questions:

• Where is the gap in the market?
• What has given rise to this gap?
• How was this gap identified?
• How will the gap be filled?
  
  

b) The Industry

Describe the forces affecting the industry in which you will operate. These forces are covered by discussing barriers to entry, suppliers, customers, substitute products and competition. Answering the following questions will enable you to cover the critical issues in discussing the industry:

What are the barriers to entry in this industry?

• Consider whether any of the following exist for your company and others wanting to enter the industry: high capital costs, high production costs, high marketing costs, consumer acceptance and brand recognition, extensive training and skills, unique technology and patents, tariff barriers and quotas, legislation or regulation.
• How will you overcome the barriers to entry?
  

How much power do the customers have?

• Who are the customers?
• Do they have significant power or influence over the prices they pay?
• Do they have significant choice when buying the product or service?
  

How much power do the suppliers have?

• Who are the suppliers?
• Do they have significant power or influence over the prices they charge?
• Is there a limited number of suppliers?

Are there substitute offerings for the product or service?

• What is the likelihood that customers will switch to a substitute product or service? Will you have important indirect competitors? (For example, video rental stores compete with theatres, although they are different types of businesses)

Who are the competitors and how strong is the competitive rivalry?

• What products and companies will compete with you?
• How will your products or services compare with the competition?

What are the major changes affecting the industry?

• Consider changes in technology, in government regulations, in the economy

c) The Market

Present your insights into the market in which you will operate. Focus on the customers for your product or service by addressing the following questions:

• What is the total size of the market?
• How fast is the market growing?
• What percentage share of the market will you have? (This is important only if you think you will be a major factor in the market.)
• What are the major trends in target market - trends in consumer preferences, demographic shifts and product development?

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