Whether a business plan is needed for a new or older company allows the entrepreneur to strategize to take the business in a particular direction. The business plan is also essential to demonstrate the profitability plans for investors and lenders. An indispensable part of the project is to write a market analysis that shows the various aspects of the companies market.
How Market Analysis Work for a Business Plan?
As part of the business plan, the market analysis shows various aspects of the companies market. For stakeholders like investors and lenders, it’s a crucial segment of the business plan that demonstrates the entrepreneur’s knowledge of their market. Some of the features that should be part of the market analysis include:
- Industry Description
- Industry Future Outlook
- Target Market
- Competitive Analysis
- Market Testing
Market Analysis Industry Description and Outlook
The first part of the market analysis should give the reader an overview of the industry and the expected direction of the industry in the future. The description should be brief, with more emphasis directed towards the industry outlook. Just like most areas of a professional business plan, the perspective will require some research. The expected growth rate of the industry and any business cycles should also be reported.
Target Market and the Business Plan
The target market should identify specifics about the type of customers attracted to the products or services of the business. The research that goes into determining the customer base’s specifics will also be used for focusing on advertising and promotional efforts. Some target market consumer specifics may include:
- age range
- families or individuals
- income level
- demographical area
- size of the target market
Some of these specific examples may not apply to individual industry segments. There also may be other segments of the company’s target market not listed above. Information on the target market can vary widely depending on the business model.
Competitive Analysis for Marketing Strategy
Analyzing a company’s competition is one of the crucial aspects of developing a sound marketing strategy. See the strengths and weaknesses of the game. As part of the business plan, expound on how the company will take advantage of any imperfections. Many of the competitors’ strengths that increase customer satisfaction and retention should be replicated and reported in the competitive analysis.
The first part of the business plan has to be the executive summary, which gives an overview of the project. The market analysis should come immediately following the executive summary. There are many elements of a business plan, and the marketing analysis, following the executive summary, will give the project a better flow.