Writing the Perfect Business Plan: Market Analysis
The market analysis section of your business plan will be one of the more intense sections to write. This is mainly because there is a lot of research that must be done. However, when you are finished, you will have a lot of information on which to make business decisions. Here are the important pieces of information you will want to include in your market analysis.
You should begin your market analysis by discussing the industry you business is in. You will want to look at overall trends and big picture aspects of your individual industry. This should include recent innovations, common practices, and common challenges. Investigating your industry will help you have an understanding of what is needed in your own business.
Key Question: What are the general characteristics of my industry?
Your target market is the subset of the population that you believe will be your customers. You will focus on your primary target market when marketing your business. However, you can also have secondary target markets that you believe will be helpful, but not as good as your primary one. When investigating your target market, you should find data, such as census reports, that can tell you how many individuals will fit your target market. This will give you numbers from which to project any other business data. It also ensures that you can verify if your target market is worth pursuing. In addition, try to find characteristics about your target market. This could be the media they use, activities they participate in, etc. It will help you develop an effective marketing plan. Be sure, you do the same for any secondary target markets.
Key Question: What are the defining characteristics of my target market?
Chances are you will have competition. This can be tricky because even if there are no direct competitors, there may be indirect competitors. It is important that you research all of these because you need to take their actions into account. You will want to look at how your competition operates and markets their goods/services. Identify as much in depth information as you can. Also, find what they offer that might make a potential customer choose them over you. You will need to know this in order to find a way to make you more desirable than your competition. Then, figure out what you have to offer that they do not. This will help to set you apart and make selling your goods/services easier.
Key Question: How will my competition affect how my operations will need to work?
Finding all of the answers to the questions above may be difficult. The information may not be readily available, or may be hard to process. However, once you do the research for your market analysis, you will gain insights to how you should operate your business. What are some methods you use to find the information for your market analysis?