Jul 01 2020
Business planning is an essential and ongoing process of running a business. To achieve your goals and vision, it is important to first have a roadmap so that you don’t get lost along the way. Business plans are a way to ensure that your business is commercially-viable, remind you of your focus and hold you accountable to your objectives.
Industry market research has long played a role in business plan writing and forms a huge step in identifying marketing strategies aligned with your goals. There are many ways you can build a stronger business case through the utilization of market intelligence and insights, and IBISWorld can show you how.
Understand Your Current and Forecast Market Conditions
Before deciding on a set of objectives to achieve your business vision, it is crucial to first make sure the overarching goal is viable in your business environment. Are market conditions favorable for what you have planned in the next three to five years? IBISWorld’s key statistics provide you with the need-to-know industry forecasts looking forward five years, affording you a quantifiable goal or expectation for growth.
Perhaps you are looking to outperform GDP, so you’re seeking new areas of growth. IBISWorld’s suite of industry research reports covers niche and emerging markets globally, allowing you to identify potential playing ground. If you are looking to diversify your product or service offering, IBISWorld’s analysis on each industry’s product segmentation allows you to identify whether there is appetite for it in the marketplace. For example, an office supplies company may not realize that there is room for growth in complementary service areas, such as workplace health and safety equipment and kitchen supplies, as its customers look to combine supplier contracts for greater savings.
Having a firm grasp on forecast market conditions also contributes to creating an accurate and realistic performance forecast for your business, which is crucial for measuring success. IBISWorld’s industry forecasts extend five years, providing guidance on expected industry performance. It is correspondingly helpful to benchmark yourself against the industry – are you expecting to grow at a higher rate than the industry? If the signs for growth aren’t favorable, what are some market strategies you can employ to achieve this? IBISWorld outlines the key success factors for each industry, highlighting what makes a company successful. Refer to our cost structure benchmarks to compare your profit margins and ongoing costs to the average spend across the sector. This is an opportunity to take an introspective look at your business composition. Are you structured and set up in a way that caters to your future business needs?
Understand Your Position in the Market
Understanding your key markets is just the tip of the iceberg of your marketing strategy. While you may very well know who it is you want to sell to, knowing how to reach and sell to them is central to your success. Industry research can enhance your knowledge of different markets within your industry, improving your go-to-market strategies and diversifying your options for clientele. IBISWorld reports provide commentary on what drives demand in different industries, while dissecting trends and segmentation for each industry’s major customer markets.
IBISWorld analysis on internal and external competition in your industry will help you build an economic moat, protecting your market position. Differentiating yourself from other players in your field is a challenge that most companies face, and it can be helpful to take stock of who you are likely to be up against. It is important to understand the risk associated with alternative or substitute products, on top of your own industry peers. Perhaps you are looking to gain market share in a highly saturated industry, or shield off new market entrants. The Competitive Landscape chapter of the IBISWorld reports helps you profile who has the biggest piece of the pie, and who is looking to bite off more than they can chew.
Identify Strengths, Weaknesses, Opportunities and Threats
No business plan is complete without first conducting a SWOT analysis. Industry market research can help you identify opportunities and threats for your market. Factoring your strengths and weaknesses into your contingency plan for influential market forces can also help enhance your competitiveness.
IBISWorld evaluates several factors that allow you to leverage your company’s strengths. Aligning yourself with industry best practice ensures your business is structured the right way to meet future industry changes. Are you taking advantage of your business location, or perhaps looking at expanding into locations that allow you to better reach your customer base? IBISWorld analyzes the density of business locations for different industries globally, allowing you to understand the saturation of each region and what impact it may have on your business, both positive and negative. Other factors such as having long-term contracts with suppliers and gaining a loyal customer base may help you identify ways in which your business could be performing better.
Now that you’ve identified your strengths and weaknesses, it’s time to look at opportunities. IBISWorld helps you identify other areas of growth within your own market through its Industry Reports, and helps in discovering other industries that have favorable conditions for your exploration and expansion, using the Industry Wizard tool. Analysis of imports and exports within your industry and knowledge of factors that influence the exchange rate may provide avenues for growing your business and brand internationally.
IBISWorld’s in-depth profiles on key economic drivers allow you to understand external factors that may have a material impact on your business. These include drivers such as the softening price of crude oil for a car sharing company, or the increasing rate of health consciousness for a fast food restaurant. External threats are difficult for industry operators to control, and therefore require greater scrutiny and planning.
IBISWorld’s Risk Rating Reports examine the level of difficulty for a business in the next 15-18 months. IBISWorld analysts assign a risk score to each industry, rating the level of risk with a stronger emphasis on shorter term threats. The analysts take into account structural risks, such as barriers to entry and capital intensity, combined with growth risks related to industry revenue forecasts, plus sensitivity risks like the business confidence index or real household discretionary income. For example, when exposed to industries with low barriers to entry, businesses are at greater risk of new market entrants. A restaurant might consider developing the flexibility to alter their products in favor of changing customer tastes as a way of shoring up their market share.
The Road Ahead
Finalizing your business plan is not the final step in this process. Once you have a plan set in place, it is imperative to continuously return to it and review your objectives. IBISWorld Industry Reports are updated one to four times a year, allowing you to take an informed and unbiased view of market trends and significant events in your industry.
Staying abreast of forecast changes in your market will be key to ensuring all the planning you have done so far doesn’t go to waste. If your business is growing at a rate less than GDP, what are the chances that your industry has entered a stage of decline? IBISWorld analyzes life cycles for each industry, helping you understand whether your market is entering into a stage of maturity or decline, and identify substitute markets if required.
Additional areas that fluctuate often are the levels of regulation and industry assistance within different industries. Can you make use of any subsidies or grants to boost your competitive advantage? Could new regulations impose restrictions that make it hard for you to run your business? Proposed government changes to employment fringe benefit tax law in Australia, for example, may have wide-ranging implications for a fleet vehicle leasing company, as salary packaging benefits take a hit and demand for their services decline.
Over time, as you grow your business, your goals and vision are likely to change. As the market shifts, so will your strategy. Revising and updating your business plan will ensure that you have a clear path ahead, regardless of what stage your business is in. Utilizing IBISWorld’s industry market research ensures that you are always on top of your market conditions and external forces.