One of the first steps to making your business succeed is understanding your market and where you fit in. That’s why the market analysis section of your business plan is so important – it gives you an opportunity to research your audience, find out what your competitors are doing, and document your findings so that you can act upon them. Here are a few things for you to consider when writing the market analysis for your business plan:
Target Audience
Your target audience, or target market, is the group of people you want to target with your product. Who will want to buy your product, and who is it designed for? Is it a high-end or budget product? Where are your customers based, and who are they?
Customer Profiles
Creating customer profiles can help you to more clearly define your target audience. A customer profile is a description of your ideal customer and their general traits and attributes. Consider their demographics such as age, gender and geographic location. What are their interests? How do they prefer to be marketed to? What are their motivations? How about their economic status? Writing up a profile like this can give you something to refer to every time you need to make a decision about your business. What would this customer want from you and your product or service?
Competitor Research
Now that you know who your target market is, you can take a look at your competitors – those are the businesses who are targeting the same target market with similar products and services. Who are these companies, where are they based, and what are they doing? What part of their operations is a potential threat to you, and how could you eclipse them? What are you doing differently that will win your customers over? These are the things you should be focusing on, and they will form an important part of your business plan and ultimate success. When it comes to competing within your market, knowledge is power – you need to know what is going on within your market so that you can make sure you do even better.
Market Trends
Speaking of knowing what’s going on in your market, market trends are another important thing to be aware of. This is particularly important if you operate within an industry that regularly changes. For example, if you work within the IT industry, do you know what kind of technology your potential customers are currently using and what is becoming outdated? What’s going to be the next big thing? If you’re in the fashion industry, do you know what’s coming into fashion at all times? What’s going on in the wider world that could influence your customers’ buying behaviours? For your business plan to stand the test of time, it needs to move with the times, too. Your plan should therefore reflect the ever-changing nature of your business and show that you are able to keep up with it.
Barriers to Entry
The barriers to entry are the things that could make it difficult for you to enter your chosen market. These may include expert knowledge or technology, licences and other regulations, access to resources and distribution, and investment. This is particularly important if you are looking for investment or funding because you need to show potential lenders and investors that you are aware of the obstacles that you are facing, and that you have realistic solutions for overcoming them. Similarly, it’s good to be aware of the barriers to entry for other businesses. What is going to prevent another business from opening next to you and taking your business? Barriers to entry can protect your business from new competition, but your business plan needs to show that you know how to overcome them yourself first.
If you would like any help with writing your business plan, make sure you get in touch with the professionals. Our friendly team has a wealth of experience and is ready to help you. Contact us using the form on the right or call 01604 420 420.