What industry factors influence my business?
- Unless you are operating within a specialty niche, your business will most likely exist alongside other businesses that offer similar products and/or services. Your industry is the “container” that holds your business – and all those other businesses too.
- Within that container there are also other internal elements that
- how that industry operates – and so, how
- business must operate.
The key ones are:
- trade associations/unions
- local regulations/standards
- internal publications
- federal agreements
- environmental factors ie geography, geology, climate.
For example, a school bus service may have to adhere to safety regulations, mechanical standards and staff recruitment regulations.
- Outside of that container we have elements that
- how that industry is performing and how it is perceived. They may not dictate how your business operates but they may influence changes or trends in the industry which you may then consider when developing your business idea.
The key ones are:
- global trends
- economic trends
- domestic trends ie housing growth or decline, population expansion etc
- cultural changes ie trend towards smaller family size, less rural activity etc
- media reports or trends
- external publications or reports
- technological influences
For example, a school bus service may be influenced by a national media report or independent study which recommends seat-belts being fitted to improve safety.
- Any of these elements (internal or external) may effect industry growth or shrinkage or may illicit other changes in how the industry operates as a whole.
So why are these factors important to my business idea?
Considering these industry factors in broad terms at this stage in your business development or expansion, enables you to solidify:
By considering those factors in your business plan you will also convince any third party readers of your expertise and industry knowledge.
- the clients you will be targeting
- the types of products and services you will be offering
- the likely demand for the products and services you will be offering
- the terms and pricing of those products and services
- the strategic or longer term plan for you business ie placement within the industry or to “niche-or-not”
- the marketing plan for your business
- the financial plan for your business
- a method to evaluate your competition
Our Case Studies picked the top 3-5 industry factors that they believed had the biggest impact on their business idea. They could pick from the lists above, or add their own industry-specific factors:
We’ll work with these answers in the next activity.
- Geoff lists his as: trade association, cultural changes (numbers of classic car ownerships and car shows scheduled in the area), economic trends (cash available for hobby projects).
- Jennifer lists hers as: local regulations/standards, environmental factors (weather), global trends, cultural changes, media reports or trends.
- Mike lists his as: trade associations/unions, local regulations/standards, economic trends.
- Cindi and Wayne list theirs as: local regulations/standards, environmental factors, economic trends, domestic trends.
- Take a look at the lists of industry factors above and list the top 3-5 you feel are the biggest influences on your business idea. If there are additional factors, please add them.