You can also consult online resources. For example, the U.S. Census Bureau can help you find demographic data when calculating your market share. The U.S. Department of Commerce and the U.S. Small Business Administration also provide general data that can help you research your target industry. Get out of the equation as an owner and put yourself in your customer`s shoes when you look at the store. What problems do you have as a customer that need to be solved? What do you want to be able to do better, faster or cheaper than you can do now? How does competition work to solve these problems? How could this company better solve them? Starting a business, especially if it`s your first, requires start-up financing. A good first step is to apply for a business loan from your bank or other financial institution. The objectives of the market analysis section of a business plan are to show investors the following: If regulation is a barrier to entry in your industry, I would advise you to merge this section with the previous one. If not, this section should simply be a checkbox where you explain the key regulations that apply to your business and the steps you will take to stay compliant. With that in mind, your target market section should include the following: Creating a customer persona can help you better understand your customer.
It may be easier to market to an individual than paper-based data. You can give this character a name, background, and a job. Train this persona in your target customers. While researching this topic, you may come across terms with similar meanings, including market research and marketing analytics. Here are some differences: You need to look at trends, just as you look at population and demographics. Is there a shift to more natural or organic ingredients that could impact your business? What could be the impact of energy prices? Easy access to the Internet and smartphone technology? The questions will be different for each type of business, but it`s important to think about the types of changes that could impact your specific market. In this section, you can quote experts in the research you are conducting – a market expert, a market research company, a professional association, or a credible journalist. Conducting a market analysis can benefit you in several ways by helping you: A top-down analysis tends to be the easier option of the two. This requires you to calculate the entire market and then estimate how much you expect from your business. For example, let`s say your target market consists of 100,000 people.
If you are optimistic and manage to reach 1% of this market, you can expect 1,000 sales. Are you looking for large markets or targeting niche markets? If you`re targeting a niche market, are there enough customers to support your business and buy your product? It should also help you understand what exactly sets you apart from your competitors, which can affect or hurt your chances of standing out in a crowded landscape. Now that you have gathered the statistics and information and done the math to know that there is a need and a customer base for your product or service, you need to show it to your best advantage. You can start the Market Analysis section with a simple summary that describes your target customers and explains why you chose it as your market. You can also summarize how you see the market growth and highlight one or two predictions for the future. How can you cover the weaknesses of your competitors in your own business? There is one important section of your business plan that you should pay attention to: your market analysis. Your market analysis will help you understand your target market and how you can thrive there. What kind of marketing message can you use to target this target market to show empathy and understanding? Once you`ve done the work to create a market analysis, it`s time to make it work for you.
Search internally where you can use your research and results to improve your business. Have you seen other companies doing things that you want to implement in your own organization? Are there ways to make your marketing strategies more effective? What are the features and characteristics of your products? How will your customers perceive your product? The idea is that you look at how your customers will see your product. As a business owner, you naturally have a bias or preconceived ideas about how your product will be received. You need to be consciously objective and unbiased when describing the 1) features and 2) benefits of your product as the potential customer would perceive them. If you notice or find that some of the attributes or benefits of the product or service are not intuitive, you should start by developing a plan on how to make your prospect aware of those attributes or benefits. Below is an example of a furniture store in France. As you can see from the chart, all market players are currently concentrated in the lower middle of the market, which leaves room for a new high-end player.