At the point where you’re starting to research your micro-industry, you’re going to find yourself needing to make a lot of decisions. Being selective is what will keep your plan focused, but you need to make sure you’re hitting the key points.
Let’s take a closer look at where to get started with your micro industry research.
Ask Yourself the Right Questions
While the macro section of the business plan looks at your broader industry, the micro industry section is where you dig into the things that may impact your business directly.
To be effective with your research, you’ll need to ask yourself some tough questions:
- What don’t I know?
- What could cause my business to close?
- How do I identify those elements that could make or break the success of my business?
You’ll need to step back and try to be objective. This isn’t a referendum on whether or not your business can thrive. It is simply making note of possible factors that could sway things in one direction or another.
Doing so may seem counter-intuitive (why share all the possible pitfalls?), but what you’re doing here is showing you’re aware of the possible risks, and what you’ll do to address them.
Investors want to see your thought process, and by showing you’ve considered all angles, you’re building trust.
Considering the risks also means you can craft a strategy to address them. Dealing with these factors NOW could potentially save you a great deal of time and money down the line if any of these things come to fruition.
Performing a STEEPLE Analysis
The acronym STEEPLE stands for the social, technological, economic, environmental, political, legal and ethical factors you’ll need to research so you can consider the impact each one may have on your business plan.
To break each one down a little further:
This speaks to cultural trends. Businesses attract customers who share the same social values and this can impact their buying decisions. It’s about the perceptions and feelings consumers have about your industry.
This is how tech impacts your business daily. From payment processing to order fulfillment, tech can have a broad reach across your business. It may impact decisions that offer a better customer experience or make your business more competitive.
Economic factors are generally influenced at a national or global level. High unemployment, a pending recession or soaring interest rates can all impact what’s going on now and in the future for various industries. Therefore, focus on ones that could directly impact your potential customers.
Depending on your industry this may or may not be a factor. Consider how environmental issues could affect things like your supply chain. If a drought in a particular state could mean you’re left short on product, this would be something you want to examine the broader impact of.
If your micro industry could see potential effects due to changes in government policy (like agriculture), or something like tax reform could jeopardize profit margins, think critically at what that would look like for your business.
It doesn’t matter what kind of business you’re planning on starting up, there are always legal considerations — many of which can have wide-reaching impacts if not handled appropriately. Everything from permits to collecting customer information falls into this category, so this is one factor that needs close attention.
Your ethical considerations are intertwined with both your internal operations and how your business operates within society. What are some of the ethical concerns within your micro industry and how are you going to address them?
Don’t Overdo It
With those seven factors needing to be considered, it would be far too easy to go overboard and write a short novel. To avoid doing that, focus on crafting a short explanation that’s about three sentences for each one and then add any additional data into your appendix.
In my own experience, completing the micro industry section can feel a little intense — not because it’s hard, but because it requires a great deal of focus and critical thinking.
To keep it feeling manageable, I recommend working on it in pieces, and taking a break in between. If there’s a particular factor you’re feeling challenged by, leave it for a while and revisit it later.
Remember, it’s a marathon not a race! Having a strong micro industry section for your business plan takes time. With some hard work and plenty of research, you can get it exactly where you need it to be.
If you’re working on a business plan and need help researching and focusing your micro-industry section, I can help!
Check out my new book How to Write an Exceptional Business Plan HERE for more details on completing a STEEPLE analysis, what mistakes to avoid and how to create a winning layout for your micro industry section.