I want to start my own business and have heard that I need a business plan. When I researched a business plan one of recommendations within it is called an Industry Analysis. What does this mean? Lincoln, NE – WA
A traditional Business Plan has many sections, but the main purpose of a business plan is thoroughly explaining every possible aspects of your small business. Let’s say, a 4 year old came up to you and wanted to know about your business. This written plan would act as a roadmap, a blueprint, or schematic for your business, putting every aspect of the business in the simplest of terms. There is classic line Denzel Washington said in the movie Philadelphia, “explain this to me like I am a 2 year old”. That is what a well written business plan would do, explain your business to someone to who has no clue about it. One of the aspects of a Business Plan is the industry analysis. This explains the Industry as a whole. If you are opening a car wash, how is the Auto Industry doing? If you are starting a website company, are people buying more or less computers? Is the industry in general growing, shrinking, staying the same? If you came to up to someone and said you wanted to start a horse and buggy lot, they would have looked on the ground because you would have lost your mind. The horse and buggy industry is non-existent and by looking at the industry as whole will help you better understand your business and the possibility of success.