Counting on your business plan to convince funders and other supporters to take you seriously, you must have a firm grip on the market you intend to serve. In our experience consulting individuals looking for business grants for women owned companies, showing intimate marketplace intelligence conveys confidence.
The section of your business plan that deals with market analysis ought to illustrate your market and industry knowledge fully together with all your findings and conclusions after research. This section is usually presented immediately after the description of your company. There are a number of things that a market analysis ought to have.
One of these things is the industry description and outlook. You will have to describe in detail your industry including the current size of the industry, its growth rate and other characteristics and trends that are associated with it. These include projected growth rate and life cycle. In this section you also need to list the major groups of customers that the industry attracts.
The other thing that you have to include in your market analysis is information about the market you are targeting. Ensure that you narrow your target market to a size that you can easily manage. Most businesses will make the grave mistake of trying to appeal to too many target markets and as a result waste valuable time and resources.
Some of the information you can perform research related to your market include its distinguishing characteristics. This includes the critical needs of the potential customers and whether or not they are being met. It also encompasses the demographics of the group, where they are located and whether there are seasonal or cyclic buying trends that may have effects on your business.
You also need to research the size of the primary target market. This is important as it gives you a vague idea of the market that you should expect for your product. In addition to size, you can also research the amount of purchases that market participants make every year and the forecasted growth in the size of the market.
The amount of market share that you can gain is also very important to include in your market analysis. This is the percentage of customers that you expect to obtain from a certain geographic area. You will need to have evaluated calculations towards the answer and the calculations should be explained logically in a manner that is easy to understand.
While compiling your market analysis, you should come up with a competitive analysis. This analysis identifies your competition by service or product line. In this analysis, you will have to analyze vital aspects of the competition like their market share. Firms that have larger market shares tend to be more of a threat to your business.
Other aspects of your competition that you ought to analyze include their strengths and weaknesses, your window of opportunity to enter the market and any barriers to your entry into the market. These barriers may be in the form of changing technology or high cost of investment.