If you are venturing into a new industry or business, then you must have considered a lot of factors. You must have a reason why you are leaving one industry for another. Failing to evaluate the new industry well may affect your business negatively and you might end up failing at the start up stage. It is therefore very critical that you understand and evaluate that new industry that you are planning to venture into. In this article, we focus on some of the things that you should evaluate before venturing into a new industry.
Industry analysis
Please note that there are so many external factors that are going to affect your business. These factors range from the government policies, population distribution to political stability. It is therefore very important that you understand what these factors are and how they are likely to influence your business. As you are setting up your business plan, it is critical that you try and identify some of these factors and also design some solutions. People with a better understanding of the industry are likely to have an advantage over people who know nothing about the new industry.
Industry players
It is important that you be able to identify all the players in your new industry. You must be able to know who your competitors are and understand the strategies that they are using. This way, you will be able to design new strategies to survive in the new industry. Remember that you are competing with people who have been there in the industry many years before you. Most of these people have more money and man-power than you. This means that they can be able to sell their products at a lower price and still make profits. To compete with such people, you need to come up with a unique strategy that surpasses their methods of operation.
Distribution patterns
You must be able to understand how products or services are distributed in your industry. Does the new industry rely on large sales to direct industrial clients? Do the retailers depend on regional distributors? What we mean is that you must fully understand how the distribution patterns work in your industry. You must know who to approach in different situations. For instance, who will you visit if you need a supply of new products?
Competition
Something else very important that you must evaluate is the buying patterns as well as the competition. Like we have mentioned before, you must be able to identify all the other major sellers in the new industry. It is only through understanding who your competitors are that you can be able to compete with them. However, don’t isolate yourselves from your competitors, instead, try and learn a thing or two from them.
Distribution of your customers
You must also be able to understand where your customers are. This will guide your marketing and you will not end up wasting a lot of time and resources trying to market to non-existent clients.
