The business plan boot camp will consist of eight parts in total, each tackling a portion of the plan and the basics of how to handle its successful creation as prospective businesses look to secure funding and backing. Put together, these skills will help create a business plan that will wow potential investors.
Part 3. The Market Analysis
The market analysis will be one of the more technical aspects of your business plan. Here you’ll include an overview of the business, the needs of your desired market, who exactly you’ll be marketing to, and what advantages you possess, as well as how you’ll mitigate any potential disadvantages.
The market analysis focuses on the industry that your business will be part of and your research into whether there is a true need in that market. In this section, it is acceptable, and expected, to use graphs and charts to demonstrate your points and show viability in your desired market.
As you write the business overview, expound upon the purpose of your business. Answer the questions that will be raised about what problems you’ll be the solution to and what specific needs are present in the market you hope to enter. Then demonstrate how your businesses’ products or services will meet those needs. Be specific. Generalities will make it seem like you have holes in your plan.
Address the competitive advantages your business has that you think will make your business succeed. Some of those factors could include something unique about your experience, such as your ability to close a deal, or your specific location in a certain part of a state struggling with an issue.
Industry Description & Outlook
In this section, you want to write about your industry overall. Include the current market share of your industry at a national level and in your area. Also include the growth rate of your industry over time as well as any other significant trends, such as the projected growth rate of your industry over the next five and 10 years
In this section, you want to address and identify what the key needs of your target customers are. This is the key to every good business. If you are not solving a real and identifiable need, you don’t have a legitimate business idea and you won’t succeed. So spend some time in this section exploring what the real problem is that you’re solving?
Once you know the needs of your target audience, you should drill down in this section and explore the demographics of that audience. Who is going to buy your product (ages, races, life stages, etc.) Where are these potential customers located? Is there anything in the cycle of the year — such as a seasonal need — that would prohibit or increase purchasing by your potential customers? Answer all of these questions in this section.
To demonstrate the viability of your business, you’ll want to narrow your target audience to a manageable group. Be able to answer a couple of important questions:
Who will you be targeting with your products and services?
Is there proof in your market that they are there?
You want to get narrow enough that you are giving your customer a one-to-one exchange, i.e. a product/service for a need. But you don’t want to narrow your target market too slimly that you miss out on customers that may be your second-tier group. So do your research and find out using data in your area who will want to purchase your services or products.
Use data to support customer activity in your area. This can be as simple as the annual amount of money your target market produces each year within your industry. In addition, include the market growth forecast for your target market. Know how much you project they will spend in the next year.
Again, be able to explain in detail where your numbers come from and why they make sense. This means exploring the percentage of the market share your business expects to take in your defined area and how many customers you expect to gain in that area. You’ll need to use data to calculate this projection and you’ll need to explain how you arrived at your number. Why are you convinced that you can enter this market and make a real impact on the market share?