New Business Development > Starting a Business > Feasibility and Business Plans

Create Your Own Business Plan -- External Environment

File C5-69
Updated March, 2010

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Economic/Social Environment

Describe forces outside of the business and beyond your control that effect the functioning of the business and the market for the product/service. These include economic, societal, technological and governmental forces affecting your business on a regional, national and international basis.

Below are topics you may want to include in your environmental analysis.


  • Interest Rates
  • Inflation Rate
  • Unemployment Rate
  • Exchange Rate
  • Other


  • Environmental Trends
  • Consumer Trends 
  • Demographics 
  • Other


  • New technology that may affect the introduction of new competitor’s products. 
  • New technology that may make the technology for making your product obsolete. 
  • New technology that may affect your operations or the operations of your competitors.


  • Governmental
  • Policies and Programs 
  • Regulations 
  • Incentives 
  • Financing
  • Other

Industry Analysis

An industry is made up of companies and businesses that produce the same product or similar products.

Below are topics you may want to address in your analysis of the industry.

  • Describe and define the industry. 
  • Describe the current nature or life cycle of the industry (emerging, growing, stable, declining, going through rapid change, restructuring, etc.). 
  • Identify and describe the forces that are currently driving the industry. 
  • Describe current trends and important developments in the industry.
  • What is the growth forecast for the industry?  
  • Identify the most important players in the industry and their size (industry concentration). 
  • Describe any problems the industry is experiencing. 
  • Describe how distribution works in the industry (e.g. direct sales to customers, direct sales to wholesalers/retailers or work through distributors).
  • Describe the supply chain relationships that may exist in this industry and describe the role of the proposed business within the supply chain in which it will exist. How do participants add or extract value at different points in this supply chain?


Don Hofstrand, retired extension value added agriculture specialist,