SAN ANGELO, Texas — Many small businesses start without knowing much about their industry.
Whether you provide a service, sell a product or manufacture, you should do an industry analysis.
A potential small business owner should be able to explain the type of business they are in.
If capital is needed to start the business you will be expected to explain the general state of your industry and the nature of the business to lenders and investors.
It is also essential to understand the nature of competition in your market.
How do customers choose one over another? What buying factors make the most difference — price? Product features? Service? Support? Delivery dates? Are brand names important?
Price is vital in products competing with each other in retail stores, but delivery and reliability might be much more important to some consumers.
Do a complete analysis of your primary competitors; list who they are.
What are the strengths and weaknesses of each? Consider their products, pricing, reputation, management, financial position, brand awareness or other factors you feel are important.
As an example; perhaps you own a computer business.
Competition might depend on reputation and trends in one part of the market, and on channels of distribution and advertising in another.
In many business to business industries, the nature of competition depends on direct selling, because channels are impractical.
In the restaurant business, competition might depend on word-of-mouth in one part of the market, and on location and parking in another.
All things in your industry that happen outside of your business will affect your company.
The more you know about your industry the better advantage you will have.
One of the great resources the Small Business Development Center has is a research center that can obtain information such as industry trends, market analysis and demographics.
This kind of knowledge will help small businesses be more successful.
If you want to learn more about your industry let the advisers of the SBDC help you.
Come by Small Business Development Center office located downtown at the Business Resource Center, 69 N. Chadbourne St.
For more information, call at (325) 942-2098.
“Business Tips” was written by Paul Howard, Business Development Specialist and Certified Business Adviser IV of Angelo State University’s Small Business Development Center. Contact him at Paul.Howard@angelo.edu.