Adapted from content excerpted from the American Express® OPEN Small Business Network
Begin your business description with a brief overview of the
industry you will be competing in. Ultimately, you want to
demonstrate that you are in a "hot" industry with an
excellent long-term outlook. You're also setting the stage for
your company description by showing where you fit in the
marketplace.
Discuss both the present situation in the industry, as well as
future possibilities. You should also provide information about the
various market segments within the industry, with a particular
focus on their potential impact on your business. Be sure to
include any new products or other developments that will benefit or
possibly hurt your business. Are there new markets and/or customers
for your company/companies such as yours? What about national
trends or economic trends and factors that will impact your
venture?
Tips
- Feel free to be dramatic. You can describe your
industry like you're telling a story. Grab the
reader's attention with strong, exciting language
that will get them interested in your industry and your
business.
- Answering "why" makes any description
stronger. Saying "the market will grow at 25%
annually" may sound impressive. But what caused that
rate of growth? Adding "...because a growing number
of baby boomers now entertain at home instead of going
out" makes it stand out.
- This is not a discussion of your competition. That
information will come later in the competitive analysis
portion. Instead, you are providing an overview of the
industry where you and other companies will
compete.
- Many business plans make the mistake of basing their
market observations on conjecture. Instead, you will want
to research your industry and back up your observations
with facts. Be sure to note all sources.
- Trade associations are excellent sources of
information about trends in your industry. To find the
trade association for your industry, consult the Gale
Encyclopedia of Business and Professional
Associations.
- General business newspapers and magazines (like the
Wall St. Journal or Business Week) and
trade newspapers and magazines (those covering a specific
industry) often report industry-wide trends as well. Many
research and university libraries carry various trade
publications and newsletters. Look in Bacon's Media
Directories for lists of publications, or use a database
like Nexis to find references on specific subjects.
- Don't be afraid to include negative information
about your industry. Discussing the possible roadblocks
your company might face shows you have a realistic view
of the market.
- If you cite information from specific newspaper or
magazine articles or research reports, you might want to
include a copy in your business plan appendix.
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