Industry Analysis for Business Plans

Industry Analysis for Business Plans
Coming up next: Competition Analysis in Business Planning

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:03 Industry Analysis
  • 1:02 In the Business Plan
  • 1:34 Industry Overview and…
  • 3:13 Competition and Profit…
  • 5:11 Risks in the Industry
  • 6:37 Lesson Summary
Save Save Save

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up

Timeline
Autoplay
Autoplay
Speed

Recommended Lessons and Courses for You

Lesson Transcript
Instructor: Allison Tanner
How do you know that your business is better than others in your industry? In your business plan, the industry analysis is a detailed and informative section that explains the industry you will be operating in and why your business is a unique addition to the industry.

Industry Analysis

The moment has arrived! You've waited many years for the opportunity to franchise your fast casual organic restaurant. Somehow you just knew that restaurants that provide quick food in a classy environment were bound to pick up! You believe that the organic theme is just perfect for the new 'health craze' hitting the market today.

As you prepare to meet with investors, you start putting together your business plan. In your mind, you know that the fast casual industry is on the rise. Even better, few competitors are doing it as well as you!

However, although you're sure of this, the investors say that 'numbers don't lie,' so you're conducting a full industry analysis for your business plan. The industry analysis for your business plan will include a detailed, well-researched analysis that indicates you have a deep understanding of your business's potential in a given market. This analysis will provide you with a comprehensive understanding of how well your franchise should do, given your strengths and weakness in your market.

In the Business Plan

As you prepare your business plan you will need to include several sections that indicate your knowledge of the industry you will be operating in. This includes:

  • An overview of your industry
  • Target market
  • Competition
  • Outlook of potential profitability
  • Relevant risks in your industry

Think of your industry analysis as a process of peeling an onion to get to the center. You want to look at the many layers of your industry so that you can best understand what is occurring, and how it may influence your business for good or bad.

Industry Overview and Target Market

When you first begin the industry analysis section, you will want to provide an overview of your industry as a whole.

  • What is going on in the food industry that is making fast casual popular?
  • What about the organic industry?
  • Is your industry growing?
  • If yes, how quickly?
  • If no, why should you still move forward?

In this section of your industry analysis, you want to provide several details about the industry as a whole. It is important to address the past, present, and future of your industry. You also want to discuss how the growth in the industry trends is positive for your business plan.

It is important to be detailed. You may be in the fast casual industry, but you are also in the organic industry. Both of these appeal to different markets. What is the trend for fast casual? What is the trend for organic? How do these two trends pair together, and why will it be successful? When conducting your industry overview, it is important to be comprehensive. You want to fully understand every detail possible about the industry your business is operating in.

Once you have identified the general landscape of your industry you want to discuss your target market.

  • Where do you intend to operate?
  • Why is this your target market?
  • How is this the best market for your industry?

Consider your fast casual restaurant. You will want to identify where organic restaurants are the most lucrative and explain why those markets are the most appealing to your industry. You may decide on a location because health and organic products are a part of the local culture. This could mean that the consumers are willing to pay a bit more if the food you source is organic, maybe even locally produced. When you select your target market you want to clearly describe why it is the most advantageous market for your industry.

Competition and Profit Potential

Once you have clearly defined your industry and its outlook you should identify your competitors. You not only want to know the history, but also who your competitors are. You will want to explain why they are your competitors and what is your competitive advantage, or what is it that you offer that they don't.

  • What do your competitors look like?
  • What do your competitors sell?
  • How are you different and why is that good?

It is important to be detailed when understanding your competitors. You want to know what makes them tick and why their customers keep coming back. Then you want to identify what you offer that they don't. Explain why customers will choose your product over theirs.

When you discuss why customers will select your business you will want to be as specific as possible.

  • What percentage of customers will choose organic over conventional products?
  • How much more are consumers willing to pay for organic products?
  • How will you market your products?

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account
Support