Monthly Archives: May 2016

Include a market analysis in your business plan

Drafting a business plan it is important to do a market analysis. You should determine against who your business is going to compete, what the size of the market is, whether the market is profitable and who your customers will be.

A market analysis of your business may seems like a daunting task,  but it is one of the most critical elements of your business plan. The following aspects as listed by Hanna Burmeister recently in the Grand Rapids Business Journal need to be analysed about the market in which you want to start your business:

Industry outlook

A prospect business owner needs to find answers to the following questions:

  • What’s happening in your industry?
    • Describe the size of your industry, expected growth, any sales, operational or management trends.
    • Is the industry seasonal? Are there expected economic fluctuations?
    • Are there government regulations?

Addressing these industry characteristics helps provide a detailed picture of the environment in which your business is operating.

  • Who is your target market?
    • Identify your slice of the industry. Who is your business targeting, and what are their characteristics?
    • What needs does your target market have?
    • How big is the potential market for your business?

This analysis should include both demographics and psycho-graphics.

Competitive analysis

It’s important to spend some time analyzing your competitors. By understanding what’s already out there, you can better determine your business’ competitive advantage. A competitive analysis should address the size of the market, competitor strengths and weaknesses, barriers to entry and market opportunities.

Projections

Do you know what market size and market share are? Knowing how much your potential customers spend will allow you to estimate how much of the market you can attract. Furthermore, you need to project your pricing structure and gross margins. These figures may help determine how profitable your business will be.

Additionally, all of the prior research you’ve conducted with your market analysis will help you with your pricing, gross margin and sales estimates.

Please visit my website eBizplan to read more about business plans and marketing plans.

The value of a business plan when you start a business

How many people that want to start their own business have a business plan in mind as one of the first things they must do before opening their doors? Not many… Recent research reported by the “Start Up Donut” showed that more than 1.5 million UK SMEs (about one third) don’t have business plans.

Every business should have a business plan, since not having it may cause a messy and costly take-off of your business. Here are reminders why having a business plan before starting your business is important:

What is a business plan?

It is a written document that describes your business objectives and strategies, your financial forecasts and the market you are targeting. It will help you set realistic and timely goals, secure external funding, measure your success. The plan also clarify operational requirements and establish reasonable financial forecasts.

Why do you need a business plan?

Your need a plan that will help you to focus on how to operate your new business and so give it the best chance for success. A well written plan with realistic financial proforma statements will improve your changes to secure funding for your start-up business.

A marketing plan may help you to market your product or services at the right place, at the right price and to the right people. The plan will identify what the needs and wants of your customers are also who your competitors are and how you should position your products or services accordingly.

Lastly, will a business plan answer questions such as where are you now? Where do you want to be? And how will you get there? The business plan should be revised regularly since the business environment of today is extremely dynamic.

Please visit my website eBizplan to read more about business- and marketing plans.