Page 67 - Business Plans that Work A Guide for Small Business

58 • Business Plans that Work

Figure 4.1 Industry Section
I. Industry definition
A. Size
B. Growth
C. Major players
D. Trends
II. Segments
A. Define
B. Your segment
C. Size, growth, major players
D. Trends

The next step is to define the segments within the industry. For exam-
ple, Lazybones segments the laundry industry into dry cleaning, commer-
cial laundries, coin-operated laundries, and so forth. Then you need to
define your niche in similar terms as you defined the industry. Specifically,
detail the size, growth, major players, and trends that impact the environ-
ment you will enter. Interestingly, Lazybones may be a disruptive business
model because it crafts a new service model and channel of distribution,
but that discussion will come later.
A common error in writing this section is to focus on your own com-
pany. It’s premature to talk about your company without first setting the
scene. Instead, use dispassionate, arms-length analysis of the industry
with the goal of highlighting a space or gap that is underserved. You are
creating the stage to introduce your company a bit later in the plan. Re-
member, most people will have read the executive summary so they know
what your concept is and can use that reference to assess whether they
believe your description of the competitive environment.
As the entrepreneur, you should keep in mind how people will read the
plan. Every statement and statistic you cite adds credibility and reinforces
your story, but it also triggers areas that readers will want to investigate. As
we read plans, for instance, we think about ways to validate entrepreneurs’
claims. In other words, we start constructing a due diligence schedule. That
means identifying key assumptions, such as the Lazybones assertion that the
college laundry sector is prime for franchising when the laundry industry as a
whole has relatively few franchisors. To validate, we might contact our brain
trust members (people with industry expertise who the entrepreneur has built
a relationship with and who can gauge whether Dan’s scenario makes sense),
talk to customers, distributors, and even competitors. Notice that the types