From the course: Creating a Business Plan

Protect your market

From the course: Creating a Business Plan

Protect your market

- Just because you've built a business, it doesn't mean it's safe. And in your business plan, you should articulate how you're going to protect what you've built. How are you going to protect another company from taking your customers? Maybe you look at things like proprietary rights that you have to the product or service. You may look at things like patents or copyrights. Do you have trade secrets that nobody can replicate? Perhaps you put in place some noncompete agreements or other proprietary knowledge and skills that's going to keep your business safe from competitors taking your customers. Now, recognize a lot of people want to go down the patent or copyright path. However, that's costly and it takes a lot of time. Additionally, just because you have a patent or a copyright, it doesn't mean it can't be defeated. There are companies out there that will infringe upon your patents. There are companies who will sue you in court. And while you may ultimately win the case, it's going to cost you a lot of time and money to defend it. So just be aware of the pros and cons of each of these defensive mechanisms. Also, don't underestimate speed and size as defense mechanisms for protecting your market. One example I know of was a very small company that built an app and it was growing rapidly, but it wasn't huge. And one day on Twitter, I saw somebody say, "I should build a company that does X and create an app for it." And about two minutes later, somebody else tweeted in response, "Well, that's already built and here's the website." What was fascinating was the first person said, "Oh well, it's already built. They beat me." Now, this company wasn't huge, but speed was a defensive mechanism that deterred a potential competitor. Another example in terms of creating those defensive mechanisms is a well-known video-based training company. And you look at the mechanisms they've put in place to protect their business. They have things like recurring subscriptions of members who continue to watch their videos. Another defensive point is they deliver high-quality product and proprietary content that you can't get anywhere else. They have size and speed in terms of how they go to market. And they also have exclusive contracts with the authors who create the courses. And all of those mechanisms combined protect their business from competitive threats. In your business plan, lay out what mechanisms you're going to use to protect your business from the threats you're invariably going to face.

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