The market analysis section in the business plan comes after the products or services section and should provide a detailed overview of the industry in which you intend to sell your product or service, including statistics that support your claims.
What Should the Market Analysis Include?
The market analysis section of your business plan should include the following elements:
Industry Description and Outlook:
Describe your industry qualitatively and quantitatively by identifying factors that make your industry an attractive place to start and grow a business. Be sure to include detailed statistics that define the size of the industry including growth rates, trends, and outlook.
Target Market:
Who is your ideal customer? This should include demographic data about the group you are targeting, including age, gender, income level, and lifestyle preferences. This section should also include data about the size of the target market, buying power, audience motivations, and how to reach the market.
Market Research Findings:
Here you include the results of the market research you conducted as part of your initial market investigation. Details about your testing process and supporting statistics should be included in the appendix.
Delivery Time:
Delivery time is the duration it takes to fulfill an order once a customer makes a purchase. Here, provide information about the research you conducted regarding the time taken to process individual orders and bulk purchases, if applicable.
Competition Analysis:
Who are your competitors? What are the strengths and weaknesses of the competition? What are the potential barriers preventing you from entering the market?
7 Tips for Writing a Market Analysis:
Here are a set of tips to help you write an effective and comprehensive market analysis for your business plan.
Use the Internet: Since much of the market analysis section relies on raw data, the internet is a great place to start. Demographic data can be gathered from the U.S. Census Bureau. A series of research can unveil information about your competitors, and you can conduct part of your market research online.
Be the Customer: One of the most effective ways to gauge opportunities within the target market is to look at your products and services through the buyer’s eyes. What problem needs solving? How does the competitor solve this problem? How will you solve it better or differently?
Get to the Point: It may be helpful for your business plan audience if you include a summary of the market analysis section before delving into the details. This gives the reader an idea of what’s to come and helps them quickly focus on the most important details.
Conduct Comprehensive Market Research: Take the necessary time during the preliminary exploration stage to investigate the market and gather as much information as possible. Send out surveys, conduct focus groups, and seek feedback whenever you have the opportunity. Then use the gathered data as supporting material for your market analysis.
Use Visual Media: Information that heavily relies on numbers, such as statistics and metrics included in the market analysis, is easier to understand when presented visually. Use graphs and charts to illustrate the most important figures.
Be Concise: In most cases, those reading the business plan have some understanding of the market. Condense the most important data and findings into the market analysis section and move supporting documents and statistics to the appendix.
Connect Data to Your Business: All statistics and data that you integrate into the market analysis should relate to your company, products, and services. When identifying the needs of the target market, focus on your unique position to meet those needs.
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Source: https://www.thebalancemoney.com/how-to-write-the-market-analysis-section-2951562
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