By Emma Sturgis

You need more than a fantastic idea and an excellent product to succeed in business. For this reason, you must rigorously plan and test your business model before you launch. Part of your preparation involves creating a marketing plan. After all, successful branding depends on knowing to whom you intend to sell. However, even as you research your target market, you must also research your industry.

If you’re like many entrepreneurs, you already have experience in your industry. Despite your skills and experience, you may not understand how current economic, political, and social trends are affecting companies in your line of work. In other words, you need to discover the environment in which your business will operate.

At first, researching your industry may seem like a waste of time and money. After all, you have a rock-solid product, a vision, and willpower. Still, the effort in this area can pay off. Here’s how.

Environment

You can learn from the way every business in your industry operates. So, spend time identifying other companies that produce and your type of products and services. Practically every industry has unique barriers to entry and other operating requirements. You need to understand these issues before you can determine what resources you will need to start your business. The environment you provide your employees may also have a large impact on the success of your business. Try to get an inside look, if possible, to how the employees function. This may help you with productivity and efficiency throughout your entire business processes.

Suppliers

Where do the firms operating in your industry obtain their raw materials and supplies? Do existing suppliers have enough capacity to meet the needs of your startup? Can you obtain the products you need at a price that allows an end product with enough profit margin? Asking these questions now will help you avoid future problems. Researching several different suppliers beforehand can also help you anticipate costs. You will be able to take the time necessary to make sure you are getting the best deals.

Distribution

How do companies in your industry deliver products to their customers? Your answer to this question will determine much of your business model. For instance, if you sell automotive components, you may have to deal with regional distributors who sell to retail stores and service centers. You might need to consider whether or not your business will remain local or will expand depending on what others are doing. This will also determine the type of distribution you choose.

Competitive advantage

Industry research benefits you by helping you identify opportunities to differentiate your business and products from the offerings of other companies. For example, if you’re starting a managed print business, how will you compel customers to choose your services over a competing brand? By deciding now, you can avoid wasting a lot of time and money developing products that have no compelling value.

Don’t take shortcuts with your business. Spend time learning everything you can about your industry so you can find ways to compete and win while delivering value to your customers.

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Emma Sturgis is a freelance writer based out of Boston, MA. She writes most often on health and education. When not writing, she enjoys reading and watching film noir. Say hi on Twitter @EmmaSturgis2