Market Overview - How Marketing Plans Work | HowStuffWorks

 

market overview business plan

How Marketing Plans Work. by Lee Ann Obringer. Once you have a handle on it, begin by writing a good overview of the market. You can actually pull some information from your business plan as long as the market information there is current and specific to the products you're planning for. If you don't have a business plan, or access to it Author: Lee Ann Obringer. Apr 03,  · This article is part of a series on how to write a great business plan. Providing an overview of your business can be tricky, especially when you're still in Author: Jeff Haden. The Market Analysis section of your business plan is far more than a theoretical exercise. Doing an analysis of the market really gives YOU the information you need to figure out whether your plans are viable, and tweak them in the early stages before you go wrong. So, where do you start?


Sample Business Plan Example


A key part of any business plan is the market analysis. This section needs to demonstrate both your expertise in your particular market and the attractiveness of the market from a financial standpoint. This article first look at what we mean exactly by market analysis before looking at how to make a good one for your business plan.

A market analysis is a quantitative and qualitative assessment of a market. It looks into the size of the market both in volume and in value, the various customer segments and buying patterns, market overview business plan competition, market overview business plan, and the economic environment in terms of barriers to entry and regulation.

The objectives of the market analysis section of a business plan are to show to investors that:. When assessing the size of the market, your approach will depend on the type of business you are selling to investors. If your business plan is for a small shop or a restaurant then you need to take a local approach and try to assess the market around your shop. If you are writing a business plan for a restaurant chain then you need to assess market overview business plan market a national level.

Depending on your market you might also want to slice it into different segments, market overview business plan. This is especially relevant if you or your competitors focus only on certain segments. There are two factors you need to look at when assessing the size of a market: the number of potential customers and the value of the market.

It is very important to look at both numbers separately, let's take an example to understand why. Imagine that you have the opportunity to open a shop either in Town A or in Town B:.

Although Town B looks more competitive 10 competitors vs. The definition of a potential customer will depend on your type of business. For example if you are opening a small shop selling office furniture then your market will be all the companies within your delivery range. As in the example above it is likely that most companies would have only one person in charge of purchasing furniture hence you wouldn't take the size of these businesses in consideration when assessing the number market overview business plan potential customers.

You would however factor it when assessing the value of the market. Estimating the market value is often more difficult than assessing the number of potential customers. The first thing to do is to see if the figure is publicly available as either published by a consultancy firm or by a state body.

It is very likely that you will find at least a number on a national level, market overview business plan. There are 2 methods that can be used to build estimates: the bottom up approach or the top down approach. The bottom up approach consist in building a global number starting with unitary values. In our case the number of potential clients multiplied by an average transaction value.

Let's keep our office furniture example and try to estimate the value of the 'desk' segment. We would first factor in the size of the businesses in our delivery range in order to come up with the size of the desks park.

Then we would try to estimate the renewal rate of the park to get the volume of annual transactions. Finally, we would apply an average price to the annual volume of transactions to get to the estimated market value. You should be able to find most of the information for free in this example.

You can market overview business plan the number and size of businesses in your delivery area from the national statistics.

Your accountant should be able to give you the useful life of a desk but you should know it since it is your market! You can compare the desk prices of other furniture stores in your area. As a side note here: it is always a good idea to ask your competitors for market data just don't say you are going to compete with them. The top down approach consist in starting with a global number and reducing it pro-rata.

Once again the number of employees would only be a rough proxy given all business don't have the same furniture requirements. When coming up with an estimate yourself it is always a good practice to test both the bottom up and top down approaches and to compare the results.

If the numbers are too far away then you probably missed something or used the wrong proxy. Once you have estimated the market size you need to explain to your reader which segment s of the market you view as your target market.

The target market is the type of customers you target within the market. For example if you are selling jewellery you can either be a generalist or decide to focus on the high end or the lower end of the market. This section is relevant when your market has clear segments with different drivers of demand. In my example of jewels, value for money would be one of the drivers of the lower end market whereas exclusivity and prestige would drive the high end.

Now it is time to focus on the more qualitative side of the market analysis by looking at what drives the demand. This section is very important as it is where you show your potential investor that you have an intimate knowledge of your market.

You know why they buy! Here you need to get into the details of the drivers of demand for your product or services, market overview business plan. One way to look at what a driver is, is to look at takeaway coffee. One of the drivers for coffee is consistency. The coffee one buys in a chain is not necessarily better than the one from the independent coffee shop next door. But if you are not from the area then you don't know what the independent coffee shop's coffee is worth.

Whereas you know that the coffee from the chain will taste just like in every other shop of this chain, market overview business plan. Hence most people on the move buy coffee from chains rather than independent coffee shops. From a tactical point of view, this section is also where you need to place your competitive edge without mentioning it explicitly.

In the following sections of your business plan you are going to talk about your competition and their strengths, weaknesses and market positioning before reaching the Strategy section in which you'll explain your own market positioning. What you want to do is prepare the reader to embrace your positioning and invest in your company. To do so you need to highlight in this section some of the drivers that your competition has not been focussing on.

A quick example for an independent coffee shop surrounded by coffee chains would be to say that on top of consistency, which is relevant for people on the move, another driver for coffee shop demand is the place itself as what coffee shops sell before most is a place for people to meet. You would then present your competition. And in the Strategy section explain that you market overview business plan focus on locals looking for a place to meet rather than takeaway coffee and that your differentiating factor will be the authenticity and atmosphere of your local shop.

The aim of this section is to give a fair market overview business plan of who you are competing against. You need to explain your competitors' positioning and describe their strengths and weaknesses.

You should write this part in parallel with the Competitive Edge part of the Strategy section. The idea here is to analyse your competitors angle to the market in order to find a weakness that your company will be able to use in its own market positioning. One way to carry the analysis is to benchmark your competitor against each of the key drivers of demand for your market price, quality, add-on services, market overview business plan, etc.

Below is an example for a furniture shop in France, market overview business plan. As you can see from the table all the actors on the market are currently focused on the low medium range of the market leaving the space free for a high end focused new player. As you would have guess barriers to entry market overview business plan great.

Investors love them and there is one reason for this: it protects your business from new competition! The answer to the questions above will be highly dependent on your type of business, your management team and any relations it might have. Therefore it is hard for me to give any general tips about it. If regulation is a barrier at entry in your sector then I would advise you to merge this section with the previous one.

Otherwise this section should be just a tick the box exercise where you explain the main regulations applicable to your business and which steps you are going to take to remain compliant. Now you know how to do a market overview business plan analysis for a business plan! I hope you found this article useful, market overview business plan. Market overview business plan so please share it, and if not let us know market overview business plan we need to improve.

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How to Write the Market Analysis in a Business Plan

 

market overview business plan

 

The Industry Overview example section ends here. If you are working on writing a business plan in order, the next section of the plan is the Market Analysis. See the Business Plan Outline for a description of all the sections of the business plan. Sep 27,  · Market analysis and your business plan. It’s smart to write a business plan, especially if you are beginning a new business venture. Even if you’re a sole proprietor or don’t intend to borrow any money to get your business off the ground, it’s important to have a clear plan in place. Your market analysis should include an overview /5(4). Apr 03,  · This article is part of a series on how to write a great business plan. Providing an overview of your business can be tricky, especially when you're still in Author: Jeff Haden.