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Business Planning: Development of the Company Analysis

The main purpose of preparing a business plan is to show you what you don't know about the plan you are writing. The process highlights the areas in need of more attention and research, and when done thoughtfully and honestly, preparing a written business plan is a tool for evaluating your company strengths and confronting weaknesses; checking out where your company has been historically; evaluating the products/services the company provides; analyzing the current market conditions; and getting clear on where the company stands in comparison to it's competitors. Many of these steps may seem unnecessary. After all, you "know" where your company has been in the past. Right? Maybe, but without the written analysis, our minds, through selective memory or from simply going too fast, may leave out information critical to the building of an outrageous plan.

Development of the company analysis is much like doing your homework before a big test. It is the homework phase prior to the development of your company's strategic plan, the plan that will direct you and your team in obtaining your established goals and objectives, for the next year. And the success of the plan relies on a thorough, accurate, and honest analysis of the company. So, do you really want to give the company analysis anything less than 100%?

The outline for the development of a Company Analysis is as follows:

1. Historical Data: The historical data portion of a written business plan is an opportunity for the person writing the plan to learn and clearly get where the company has been in the past. Where the company has come from, what it has made it through, and how it made it through. For those reading and utilizing the business plan, it is their opportunity to learn more about the company. You want the historical data to include: when the company was founded, by whom it was founded, type of business, it's mission, history of it's financial state, etc.
2. Products: This is where you outline the products/services your company provides, what they are, who they are targeted too, etc.
3. Market: The purpose of analyzing your company's market is to get a clear view on where the market you serve is at physically and economically. You have to consider all of the geographic, demographic and economic factors that can affect the way consumers perceive your company's products/services.
4. Competition and Position: This section is an opportunity to analyze everything you know and can find out about your competition. Who is your competition; how does the products/services your company provide stack up to those of your competitors and how are they different; what position do you hold in the market as compared to your competitors; what type of pricing does your competition apply to their products/services and frankly, what makes your competition, competition at all?
   a. Cost comparison…
   When comparing the cost of your products to that of your competitors be sure and take into consideration product quality.
   b. Key success factors…
   This section is a look into what makes your competitors competition and what makes them successful.
5. Strengths and Weaknesses: This section is incredibly important because this is where you have to be standing when you write the second plan for where you want to go a year from now. It is designed to have you take a straight look at what your company strengths are and the company weaknesses. Where are you vulnerable? What strengths do you have that make others vulnerable to you as a competitor?

Preparing an honest and accurate company analysis when considering weaknesses compared to competitors, the current market conditions, past success and failures of your products/services and where the company has been historically, is key to your business plan ultimately serving as the powerful, success-building tool it is meant to be.

So as you prepare your written business plan remember: The plan is only as good as the thoughtful, honest, and accurate manner it is prepared, and then owned and used by not only you as a leader, but by your team.