This part of the business plan is also known as the market analysis and illustrates and explores your industry and market knowledge (such as competitors) along with any research finding of conclusions.
Here are the relevant sections of this section:
- Industry Description & Outlook: Take a snapshot of your industry and provide a description including current size, history, growth rates, trends, characteristics and major customer groups within the industry.
- Information About Your Target Market: Narrow your target market to a manageable size. Some entrepreneurs and business owners try to appeal to too many target markets too soon. If you do have ambitious goals to target numerous markets in the beginning (or anytime), be sure to plan an achievable strategy.
- Distinguishing characteristics
- Market share
- Size of the primary target market
- Pricing & gross margin target
- When you include information about any of the market tests or research studies you have completed, be sure to focus only on the results of these tests. Any other details should be included in the appendix.
- Competitive Analysis— Your competitive analysis should identify your competition by product line or service and market segment. Assess the following characteristics of the competitive landscape:
- Market share
- Strengths and weaknesses
- Importance of your target market to your competitors
- Barriers that may hinder you as you enter the market
- Your window of opportunity to enter the market
- Indirect or secondary competitors who may impact your success
- Barriers to market that might affect your success (e.g., changing technology, high investment cost, lack of quality personnel)?
- Regulatory Restrictions – Include any customer or governmental regulatory requirements that might affect our business, and how you’ll comply. Also, cite any operational or cost impact the compliance process will have on your business.