How to prepare a market analysis for a business plan

Putting together a business plan can seem a daunting task. In order to do a thorough job, you must take your time with each of the different components. One of the most important components of a business plan is the analysis of the market. The market analysis section of the business plan will help you understand the domain in which they will operate. More importantly, it will also help potential investors see that know your market and have a plan that can work in its context. The following information will help you prepare for this crucial piece of the business plan.

Identify target markets

Preparing a market analysis begins with thinking about who your potential customers. Some of the factors to consider when deciding which will be included in your target market are:

Or demographics such as age and sex, race or ethnicity, education level and income
or Location
or personality traits, attitudes, preferences and needs
buying habits or frequency, loyalty and likelihood to purchase online

When identifying target markets, it is important to define a light realistic and correct. If your market analysis focuses on a segment too large, it may be difficult to achieve (or try you can get) all the consumers effectively. On the other hand, if your target market is defined too narrow, it may not be able to generate enough business to be profitable.

Getting Started

In your market analysis, it is important to be thorough and to describe your methodology to define your target market. A good way to start is to ask "who will potentially be a consumer of my goods and / or services?" To say "all" is too broad and make your work to narrow your focus harder. In contrast, consider the market potential. This is the total number of people who might buy from your business. For example, if the concept is a local flower shop, the market potential could be anyone within a radius of eight kilometers. If you're also selling over the delivery and the Internet offer the potential market could expand to people who have credit cards and a reason to have flowers delivered in your area.

Once the market potential is defined, it is time to start narrowing the field. Now you need to understand how much of your potential market is also within your target market. You have to ask who in your potential market is likely to have an interest in your product. Returning to the local florist, perhaps to include individuals of a certain age who have a special occasion coming up. Perhaps organizations such as churches and businesses that may need to adjust the delivery of flowers.

Finally, they etch your target market by market, addressable. Identify who within your target market is likely to buy from you based on demographic data, geographical limitations, personality traits and attitudes and habits of consumers.

A Final Word

Although the competitive analysis section of a business plan follows generally the market analysis, is a good idea to scan the competition before you set your target market in stone. This may help to define a target market that is actually accessible .......