From the course: Creating a Business Plan

How you rank vs. competitors

From the course: Creating a Business Plan

How you rank vs. competitors

- Your business plan should go into great detail in terms of how your product or service ranks versus your competitors. Now, be honest about your standing versus your competitors. I like to create what I call a moon chart, and that's where you lay out all of your competitors and then articulate how you stack up versus them. One thing you should never say in a business plan is, "We have no competitors." That's not believable, and it's risky because it's pointing out that you have a blind spot in terms of the market and where you stand. Now, when you create this moon chart, what you're going to do is list all of the competitors across the top, and then down the side, you're going to list out all the performance dimensions and how you stack up. And within each square on that matrix, you're going to spell out whether you're the best, the worst, or somewhere in between. And again, that's compared to your competitors' offerings. This document is going to help you pitch your idea and how you're going to position yourself with your customers. My example in business, again, we sell training services. And the purchase motivators that we look at are the skill gaps that are being filled, the quality of the content, the quality of the instructor who delivers the content, the applicability of that content to a participant's job, and then the cost of the training. Then we look at our competitors and some of the commodity training that's out there. And when we fill out that chart, we're higher in terms of the content, the instructor's skill level, the applicability of our training to the participant's job, but we're much worse on cost. We're not cheap. So we end up positioning our product as a premium product, and we spell out, "Here are all the extra benefits you get from buying our courses, and, yes, you pay more for them compared to these competitive offerings." Another example you may be familiar with, when you look at Apple and the purchase motivators that they're evaluated on. You look at functionality and design, quality and coolness of the product. Maybe you look at apps and ultimately the cost of the product. Apple wins on many of those dimensions except cost. However, they're able to spell out, "Here's how we compete, here's the things we're the best on, and here are the things that we're not. And this is how we're going to position ourself in the market." So when you look at your business, spell out who those competitors are, lay out the evaluation dimensions, and then compare yourself on each dimension versus those competitors. Then at the end of that section of your business plan, spell out the implications of that positioning in terms of how you're going to pitch your product or your service to your customers.

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