Your company is not operating inside a bubble. It is part of a dynamic industry, which has other companies coming and going, new products replacing old ones, developments such as government subsidies and incentives, as well as new market opportunities. All these have an impact on things like what you charge for your products, the number of sales you make, and how much money you sink into advertising. The more you know about the bigger circle your business is operating in, the better able you’ll be to keep pace with the industry and make smart business decisions. Investors want to know that your industry knowledge extends beyond the front door of your company. Plus they want to know the past and present history of your industry, and even more importantly where its future is headed. Even the surest business ideas will have a hard time surviving in a dying market.
Here are some questions you may want to consider in describing your industry:
- What kind of industry are you in? Is it seasonal?
- Are research and development important?
- What new products have come into your industry over the past year?
- Have any companies come into or left the industry?
- How is the market divided amongst companies in your industry? For instance, does one company have ninety-five percent of the market, or is it evenly distributed amongst ten companies?
- Who are the big cheeses in your industry, and how do you attribute their success?
- How does your company fit into the industry? What do you have that others don’t?
- How has your industry evolved to the stage it is now?
- Any significant market trends?
- How big is the market–local, regional, international?
- What is the industry’s economic status–depressed, middle-of-the-road, boomtown?
- What kind of future does the industry have?
- Any eminent political or economic developments which will have an impact on your industry?
- What makes you optimistic about your industry’s future?