Market analysis is the target audience in your business plan. It’s a thorough examination of the idealists.
The business plan and the importance of defining your target market
Market analysis is the target audience for your business plan. It is a thorough examination of the ideal people to whom you will sell your products or services.
Even if you sell a product or service exclusively in your community, you will not sell that service to everyone who lives there. Knowing exactly what type (s) of people might be interested in buying your product or service and how many of them live in your planned area or areas is fundamental to creating your market analysis.
Once the target market information has created, you also work on sales plans within certain time limits and how potential sales could affect development and strategy.
Conducting market analysis
Research is the key and cornerstone of any sound business plan.
Do not skip this step!
Do not skip market research; otherwise, you could end up starting a business that does not have a payment market.
Use these general terms as keywords in the research data for the market analysis section of your business plan and to identify your need:
. Age: What age range do you have catering/service? Kids, Adults, The elderly, Gen X
. Gender: Are you targeting men, women, or both sexes?
. Relationship status: Are Your Targeted Customers Married or Single or Divorced?
. Family: What is their family structure (number of children, extended family, etc.)?
. Location: Where do they live? Are you selling locally? Regional, national or international
. Education: How much education do they have?
. Income: What is their income?
. Employment: What do they do for a living?
. Religions: Are they members of a particular denomination?
. Language: Are they members of a specific group of language?
. Lifestyle: What is their lifestyle?
. Motivation: What motivates them?
. Size: What is the size of the market?
But do not stop here. To systematically define your market, survey or survey members of potential customers or clients to ask specific questions directly related to your products or services. For example, if you sell computer-related services, ask questions about the number of computer devices those potential customers own and how often they need assistance. If you plan to sell garden furniture and accessories, ask what kind of garden furniture or accessories your potential customers have bought before, how often and what they expect to believe in the next one, three and five years.
Pondering your market
The purpose of the information you collect is to help you estimate how much of your product or service you will sell. Review the essential questions you need to try to answer using the data you collect:
What percentage of your market has used a similar product to you before?
How much of your product or service could your marketer buy? (Estimate this in gross sales and units of goods/services sold.)
. What percentage of your market could be repeat customers?
. How could a targeted market influence demographic change?
. How might your market influence an economic event (such as a local mill closure or a large local retailer)?
. How could your target market influence more significant societal and economic developments?
. How might your target market influence government policies (such as new approvals or tax changes)?
I am writing the market analysis.
One of the purposes of market analysis is to make sure you have a realistic business idea.
Find your buying market.
Use your market research to make sure that people like your business idea and are willing to pay for it.
If you have information that indicates that you have a large enough market to maintain your business goals, write the market analysis in the form of a few short paragraphs and use appropriate headings for each. If you have several market makers, you may want to talk about each.
Parts of your market analysis should include:
. Industry Description and Outlook
. The market
. Results of market research
. Competitive analysis
Remember to properly quote your information within the side of the market analysis when writing it. You and other readers of your business plan, such as potential investors, will need to know the source of the statistics or opinions you have gathered.
Network tools for market research
There are several resources available online to learn if your business idea is worth pursuing, including:
. A keyword search can give you an overall view of the potential demand for your product or service based on the number of searches.
. Google Trends analysis can tell you how many searches have changed over time.
. Social media campaigns can give you an indication of potential customers’ interest in your business idea.
Sources of U.S. market research
The U.S. Small Business Organization (SBA) has information on conducting your market research and analysis, as well as a list of free small business data and development tools you can use to conduct your research. Consider these data collection permissions:
. SBA business data and statistics
. The U.S. Census Bureau maintains a massive database of demographic information searched by state, county, city/town or zip code using census data tools. Social, housing, economic and population surveys are also available.
. The U.S. Department of Commerce (BEA) has comprehensive statistical information on the economy, including consumer income/expenditure/consumption, employment, GDP and more, all of which can vary by location.
Canadian online market research
The Government of Canada offers guidance on market research and tips for understanding the data you collect. Canadian data sources include:
. Statistics Canada provides demographic and economic information.
. The Business Development Bank of Canada (BDC) offers market research and consulting to industry experts.
. Canada’s Business Network provides entrepreneurs with business information by region/region, including market research data.
Local sources of market research
There are also many local resources for building market information to explore, including:
. Library on site
. Municipal Chamber of Commerce
. Chamber of Commerce
. City Hall
. Economic Development Center
. Office of the Municipal Ombudsman
. Ministry of Commerce
. Local directory
All of these will have information to help define your target market and provide insight into the development.
You are doing your market research.
The above resources are secondary information, as others have collected and compiled the data. For specific details about your business, consider doing your market research. For example, you may want to design a questionnaire and explore your target market to learn more about their practices and preferences related to your product or service.
Market research is time-consuming but is an essential step in giving your business plan value. Suppose you do not have the time or research skills to define your target market carefully. In that case, it may be a wise investment to hire an individual or company to research for you.