How important is it for a business plan to identify " barriers to entry" ?
Internet in Business mentor Bradley Feld answers the following question from an inc.com visitor: When putting together a business plan, how important is it to show "barriers to entry," or the reasons why potential competitors wouldn't be interested in your market? Patents, while worthwhile, don't always protect the idea. Trade secrets and company knowledge can be easily revealed since employees are so quick to turn over these days.
Bradley Feld responds: Barriers to entry are important but, in my opinion, they are rarely a key reason for a venture capitalist to get excited about a business. Typically, VCs are much more focused on the management team, the size and scope of the business opportunity, and the belief that the team can execute on the opportunity. If a business plan doesn't mention barriers to entry, it may be less compelling to VCs, but it won't automatically turn them away.