What kind of competition do you have for your donut business? How does your business and your product measure up to theirs? Evaluate what your competition does so you can copy what works for them and discard what does not. In other words, learn from those who are trying to get your customers. How do competitors define the product (donuts) in your area? How much market share does each have?
In the competitive analysis of your business plan you will want to look at donut businesses similar to yours including national chains that also operate storefront businesses. If you operate a trailer and move between fairs and festivals your competition is not necessarily other donut businesses (although those count too) but those next to you selling other vending items. Granted, it will be difficult to research these other businesses on wheels before hand. When you get to a fair and set up observe everything the other vendors do that attracts customers and everything they do that has no effect.
Also consider how likely other competitors may enter the market at a later date. Investors will want you to research how saturated the market is and what the barriers are to people who want to make donuts like you do. Do not let your emotion get in the way of your analysis. It is easy to assume that your product will be superior to everybody else's, but there is much more to consider. Taste, size, price, and service are all important things to look at but are only part of the picture. Try to learn the internal business practices behind the scenes to gage the strength of your competition. Are they creative, motivated, and financially secure? Do they have high employee turnover? These are keys to success as well.
Investors do not want to know why you are a little bit better than the competition. They want to know why you are way better then the competition. Try to view your donut business through the eyes of a customer and if possible be a customer of other donut businesses to gather your information.
