What is the difference between a Business Plan vs A Competitor Analysis?
The simple answer is that a competitor analysis forms part of your business plan and informs some of your decisions. You can easily have one without the other, but having both will steer your company in the right direction. It’s all about research and planning.
What Is A Competitor Analysis?
A competitor analysis is an integral part of any successful business strategy. It’s all about looking at who your industry competitors are, working out what they’re doing right, and what they’re doing wrong. You can learn a lot about your industry and how to succeed in your market by analyzing those already operating.
You start by looking at the businesses operating in the same geographical location as you, especially those that sell the same, or similar, products or services. It’s also important to look at online sellers who might deliver or operate in your area, because you’ll be competing with them for customers too.
Once you’ve identified your competitors, spend some time analyzing their offerings, their pricing model, and target market. Then determine if you differ in any way.
Next, look at their stores—both online and brick-and-mortar—to see what kind of customer experience they offer. Last, look at the promotions they run, and the marketing campaigns and strategies they embark on to attract customers.
In the most basic terms, this is a document you put together to guide the setup and growth of your business. In it, include your goals for the company—both short term and long term—as well as how you plan to achieve those goals.
There are different types of business plan templates, and not every business needs all of them. However, no matter what the size of your business or the scope of your idea, you should always have a document that covers the basics. A basic business plan that takes you from start-up to scaling up is a roadmap to success.
A formal business plan comes in when you want to apply for a loan or secure investors, and this needs to include information such as financial statements, projections, an opportunity summary, and a competitor analysis.
Why Include A Competitor Analysis In Your Business Plan?
If you want to get the most out of your business plan, you need to look at all of your potential obstacles. You won’t get much bigger, or important obstacles, than those already operating in your area. These competitors can tell you a lot about how successful your business could be.
Looking into your competitors can show you if there is a need for the service or product that you want to provide. Additionally, you can see if the market is saturated already, or if there’s room for you too. Competitors can also show you what kind of marketing tactics work, and what type of customer experience you’ll need to offer.
With this information, you can work out how you’re going to make your business stand out, and how you’ll compete for market share successfully.