How to Write the Market Analysis Section of a Business Plan
A market analysis is the part of your business plan that comes directly after the description of goods and services you or your client is going to sell. It includes an overview of the chosen industry and the necessary data to back up any claims. Keep in mind that it can be the hardest part of your business strategy. To end the market analysis vs market research debate, having a proper market analysis is essential, whether owning an online casino like Mr.Bet or an international bank. Here is a market analysis guide that will help you write one professionally and put you on track towards achieving your business goals.
Step 1: Industry Overview
First and foremost, you need to know how to make a market analysis. All in all, a market analysis for business plan should provide a general view of the industry, its size, trends, and projected growth for the future. This helps you get a precise measurement of how competitive the field you about to invest in is, along with how much traffic you can expect. Here is market analysis in business plan example: if you are selling vehicles, you’ll want to know if the demand is increasing or decreasing, what car type is popular, etc.
Step 2: Find Your Target Market
Finding your target market is where most research should go in order to find your ideal customer. As you dump hours into this research, you may realize that you have more than one customer type, which means you can do something called “Market segmentation.” If so, classify them by a common denominator like market size, demographics, or location. For example, if you own a casino and are trying to popularize your Ramses Book game, you’ll need to have an idea of who is interested in playing it.
Step 3: Identify the Competition
As you may imagine, you will not be the only provider of goods and services in your chosen field and will have to fight for the customer’s attention. This is a fight that can only be won by being well-informed, as Sun Tzun said: “If you know yourself but not the enemy, for every victory gained you will also suffer a defeat.” So, spend a good amount of time getting to know your competitors, not only their strengths but also what you can offer that they cannot.
Step 4: Pricing and Sales Prediction in Your Market Analysis
Finally, it’s time to look at how much you will charge for your goods and services and estimate your sales statistics for the beginning. When it comes to pricing, you need to not only have a good profit margin in relation to your production cost but keep in mind the message it sends. After all, customers link the price of a product to its quality; consider this, along with your company’s visual identity, to send a coherent message. Once you have nailed down the pricing, it’s time to speculate on how much you expect to sell, use it as a goal for your business.
Step 5: Visual Aids
Obtaining accurate information is important, but so is the ability to efficiently convey it to those about to read your market analysis and strategy. It would be smart to compile all the data you have gathered into easy-to-understand infographics and other forms of visual media. It is also a good idea to make sure the language used in your report is understandable and clear. After all, what is the point of writing it if people are either not going to understand the information or fall asleep halfway through it?
Writing a proper market analysis can make the difference between the success and failure of a business for a variety of reasons. The main one to be pointed out is that it will be this part of your business plan that potential investors are going to look at when evaluating your company. Those mentioned above are only some of the market analysis benefits you need to take into consideration as you work your way towards making one.
So, keeping yourself open to tips on how to make it better can only benefit you, even when you are confident in your ability to write it well. So, have you ever written market analysis? Be sure to share it in the comments!
Joshua Sherman is one of the most widely known writers that specialize in technology. He has written many other informative articles, he mostly writes about technology. Apart from being an excellent writer, he loves traveling, playing games, watching TV and meeting new people from anywhere in the world.