Lenders, investors and business plan reviewers all read the competition section for the same thing: proof that you know who else serves your customer and have a believable reason to win anyway. This guide shows what the section should contain and gives a complete, worked example you can adapt. The example business is fictional; the structure is the one reviewers expect.
What reviewers want from this section
- That you named real competitors, including the one they would think of first.
- That you compared the same things for each, not a paragraph of impressions.
- A specific advantage, tied to a customer, not “better service”.
- Honesty about their strengths. A plan that says every competitor is weak is not credible.
If you are applying for a small business loan, including SBA-backed loans, the lender reads this section to judge whether your revenue projections are realistic. It should make your sales forecast look earned.
The structure (1 to 2 pages)
- Market overview: two or three sentences on who buys and how they buy today.
- Direct competitors: three to five, with a comparison table.
- Indirect competitors and alternatives: what customers use instead.
- Competitive advantage: your specific edge, with evidence.
- Risks: how competitors might respond, and your plan.
A complete example
Fictional business: Northside Pet Care, a mobile dog-grooming van serving a mid-sized US suburb. Competitor names are invented; the method is real.
Market overview
Dog owners in the service area currently book grooming at salon locations or big-box pet stores, typically every six to eight weeks. Owners of large or anxious dogs, and busy households, want grooming at home but have few local options.
Direct competitors
| Paws Salon | PetMart grooming | Groom-on-Wheels | Northside Pet Care | |
|---|---|---|---|---|
| Type | Independent salon | Chain store | Mobile van | Mobile van |
| Full groom, medium dog | $75 | $65 | $110 | $95 |
| Online booking | No | Yes | Phone only | Yes, same week |
| Wait for next slot | 1-2 weeks | 3-5 days | 3-4 weeks | Within 7 days |
| Large dogs (70 lb+) | Extra charge | Limited | Yes | Yes, no surcharge |
| Google rating | 4.6 | 3.9 | 4.8 | New |
Indirect competitors and alternatives
Owners also groom at home with purchased tools, use self-service wash stations at pet stores, or skip professional grooming between vet visits. These alternatives cost less but take time most of our target customers do not have.
Competitive advantage
Groom-on-Wheels, the only other mobile groomer, is highly rated but books three to four weeks out and takes bookings by phone only; several of its recent reviews mention the wait. Northside targets the same at-home customer with online booking and availability within a week, and serves large dogs without a surcharge, a common complaint in salon reviews.
Risks and response
PetMart could extend hours or discount. We do not compete on price with chain stores; our customer pays for convenience. If Groom-on-Wheels adds a second van, our response is to build repeat bookings early through a subscription schedule.
How to gather the facts behind it
- Prices: competitor websites, calling as a customer, and reviews that mention what people paid.
- Ratings and complaints: Google Maps, Yelp and Facebook reviews. Read the one- and three-star ones.
- Market facts: the U.S. Census Bureau's County Business Patterns counts businesses by industry and county, free.
- Help: SCORE mentors and Small Business Development Centers review business plans at no cost.
For a software or online startup, the same structure works with different sources; see competitor analysis for startups.
Mistakes that weaken this section
- “We have no competition.” Reviewers read this as “we did not look”.
- Vague advantages such as quality or passion, with no evidence.
- Stale prices. Date your research and refresh it before submitting.
- Ignoring the alternative. Doing it yourself is often the biggest competitor.