The Company and Industry

Writing and Presenting a Business Plan Chapter 2

Objectives 1. To describe the start-up and background of your company. 2. To provide a brief sketch of your industry and how your venture addresses it. Note: The first part of this module is primarily for ventures that have some operating history. If your company has a significant history, you may want to have this section stand alone as its own chapter. Suggested Length: 1-3 pages

Company Background When and where was the company started? Date and state of incorporation or partnership? Where is the business located? Why? Have you obtained a patent or trademark for the company’s name and/or logo? Legal structure of company?

How Was Your Venture Developed? Why did you go into business? How long did it take? What problems were encountered? How did you overcome them? What were the key milestones? Is your company affected by major economic, social, technological, environmental, or regulatory trends?

Who are the Founders and Other Key People Involved? What skills and experiences does each member of the team bring to the business? How much money have you/they invested? How has it been used? What have been your other sources of funding?

What Industry are You In? What is the current state of the industry?  How big is it in terms of total sales? Profits? Margins? Who are the major industry participants?  Competitors, suppliers, major customers, distributors, etc.?  What is their performance? Market share?  What advantages do you have over them?

What are the Industry’s Chief Characteristics? Where is it expected to be in 5 years? 10 years? Will your share increase or decrease with these changes? Who else may enter the industry?

Subheadings to Include The Company  Background  Current Status  Future Plans The Industry  Chief Characteristics  The Participants  Analyst Summaries  Trends

What to Accomplish Make the reader a part of your dreams. Describe how your work and decisions got the company where it is. Show how past performance will pave the way to future success. Demonstrate how you will become an important addition to the industry and that you understand the industry and where it is headed. The following is a suggested sequence of presentation.

The Company Background 1. Describe the start-up and history of your company from the time of inception. State what form of business it is and where it is located. 2. Discuss significant milestones, such as obtaining a patent, building a prototype, signing a major contract, or obtaining trademarks on the company’s name or logo. 3. Discuss people involved and the roles they have played.

The Company Current Status 1. Discuss where you are now. Talk about the reputation you have built, your strengths, and what limitations are being experienced. 2. Describe how your product is performing in the marketplace. State how much money has been invested to date, by whom, and how it has been used. 3. Give an overview of your sales and services record, if any. Discuss the kind and amount of funding the business needs to begin or improve operations.

The Company Future Plans 1. Discuss your goals for the next three to five years. Describe how you plan to achieve them and what resources will be needed. 2. Allude to improvements and expansion of your existing product line as well as your hopes for increasing your market share and sales.

The Industry Chief Characteristics 1. Describe the industry your company is in. 2. Discuss the industry’s profile, including size, geographical dispersion, market, history summation, current status, and total sales and profits for each of the last three years.

The Industry The Participants 1. Discuss the competition and other players (suppliers, wholesalers, distributors, etc.) within your industry. 2. Summarize each participant along a spectrum of weakest to strongest. Briefly discuss the participants’ product/service lines and market niche. 3. Discuss participants with whom you will have direct involvement or competition.

The Industry Analyst Summaries 1. Provide a series of quotes and statements that summarize significant facts, figures, and trends about the industry from various reputable sources. Make sure you properly credit the source and provide the date of publication. Use quotes and statements from diverse sources i.e., industry magazines and newspaper articles. 2. Quotes from personal interviews can also have a powerful impact. These statements should clarify where the industry is headed and the various markets to be served within the industry.

The Industry Trends 1. Discuss where your industry is headed. State whether it is declining, improving, or holding steady and what opportunities there may be. 2. Discuss where it might be in five to 10 years and your relative position within it. Discuss the future of the industry in terms of market need and/or acceptance and profit potential. 3. Describe significant events or changes within the industry that will affect your business positively or negatively.

Common Mistakes to Avoid Including too much detail and personal opinion about the company and not enough on significant milestones and potential Failing to demonstrate a well-rounded knowledge of major industry players and their potential influence on the company

Common Mistakes to Avoid Appearance to be a fly-by-night operation Evidencing lack of direction Demonstrating poor or inadequate knowledge of the industry and trends