Every business plan should include market analysis. This is one of the first and most important reasons to do a business plan. And whether you’re just starting a new business or reviewing an existing business, you should renew your market analysis at least every year.Markets change – a business needs to watch for changes in its market.
The market you need to look at is your potential market, not the actual market served, the one that’s limited to your existing customers. Your target market is much wider than just the people you already reach. It’s the people you might someday reach, or people you could reach, that you need to be concerned about.
For example, the market of a local theatre or restaurant includes not just the people who regularly go there but everybody who lives within driving distance. The market for a landscaping business includes all the homes and commercial properties within a logical reach.
The market for downloadable e-books over the internet includes everyone connected to the web. The market for personal computers includes homes, schools, businesses, and government organisations. It’s your plan – and every plan is different – so you need to know as much as you can about your target market.
Getting the Information
The information sources that will help you conduct a market analysis are different for every business plan. For example, you might need local information you can get from your local chamber of commerce.
Or you might be able to find your market information from the Department of Labour, at www.dti.gov.za, the Department of Finance and others. You might also need to find other government statistics, or other commercial statistics, so you may be conducting some internet searches to track down the information.
Not all the information you need is going to be publicly available, and you may have to settle for educated estimates. Sometimes you’ll have to extrapolate information from different sources to get the information you’re seeking.
I’ve seen good market research come from telephone directories, catalogues, industry association statistical compilations, real estate information and density maps.
Always try to divide your target market into useful slices or segments. For years, I consulted with a computer manufacturing company that targeted such market segments as homes, small offices, businesses, educational organisations, and government.
Dividing the market into these segments helped the company address the more specific market needs, media, pricing patterns and decision criteria in each of their different market segments.
Segmentation helps you target specific people with specific messages and helps you focus on user needs. Families might need quick, consistent service while students might need late-night service. Families read the newspaper; students read posters on walls.
Knowing your market segments will help you make smart decisions when it comes to providing the products and services that will work best for them and for communicating with them.
Market Size and Growth
You need to be able to measure and quantify your market. For example, if local homeowners are part of your target market, then you should be able to count them. You need to know whether you have 500 people in your market, or 200 000, or two billion. Be able to show what the total market is for your business.
When it comes to market growth, you need to think about percentage change as a market forecast.
- Is the number of homeowners in your target market increasing or decreasing?
- By how much per year?
- How many older workers retire every year, and how is this changing?
- How many people eat in restaurants in your market area, and how is this behaviour changing?
Market forecasts start with the total numbers of possible purchasers in each market segment, then project percentage change over the next three to five years.
You need to understand what’s going on with your market.
- What trends and fashions do you see having an influence on your market segments?
- If you’re selling cars, for example, is there a trend that shows people responding to higher fuel prices or more environmental concerns?
- In computers, is there a trend toward more power and lower prices?
- How does the increase in TV recorder equipment affect your market?
The questions that affect target markets will be different for every business, and these are just examples. What’s important is that as you create your business plan, you become aware of the market trends that affect your specific market.
Free SWOT Analysis Template
While all SWOT analysis templates comprise the same basic elements, ie Strengths, Weaknesses, Opportunities and Threats, the information you slot under each heading can make or break your planned product or solution launch.
Are you unsure of what to put into your SWOT analysis, or even what a SWOT analysis is? The following guide will assist you in setting up an ideal SWOT analysis and clear up any misconceptions:
21 Free Sample Business Plans
Writing a business plan can be a daunting process. Sample business plans can be very helpful in providing a format for you to build your business plan on.
Here you’ll find free sample business plans for every conceivable type of business.
Go through our collection of free sample business plans – we have one for almost every industry.
However, don’t just copy the sample business plan. The purpose of writing a business plan is to actually research and find out more about the business venture that you have in mind. It also allows you to stress test all of your business assumptions to ensure they hold up to real market conditions.
Business Plan Categories
Find 11 sample business plans here to launch your travel or transport business.
Educational Website Business Plan: Learn from education business, One Week At A Time’s business plan example, and create an educational website of your own.
Related: Business Plan Format Guide
Find 8 sample business plans here to help you launch your computers or internet business.
Find 4 sample business plans here to help you launch your construction or engineering business.
Find 13 sample business plans here to help you launch your consulting business.
16. Food and Farming
Find 7 sample business plans here to help you launch your food or farming business.
Find 4 sample business plans here to help you launch your health and beauty business.
Find 3 sample business plans here to help you launch your hospitality business.
Find 8 sample business plans here to help you launch your manufacturing business.
Find 2 sample business plans here to help you launch your medical or health care business.
Find 2 sample business plans here to help you launch your non-profit organisation.
10. Online Business
Find 2 sample business plans here to help you launch your online business.
Offering any dry cleaning home delivery service has to first start with a detailed business plan. Start your own business now with this sample business plan.
Find 5 sample business plans here to help you launch your services business.
Find 2 sample business plans here to help you launch your pets or animal services business.
Find 13 sample business plans here to help you launch your professional services business.
Are you looking to start your own magazine? Starting out as a magazine publisher will require a business plan similar to this one.
Would you prefer to start up your own newsletter? Use this sample business plan if you are starting up a business that offers newsletter publishing services.
4. Real Estate
Find 8 samples business plans here to help you launch your real estate business
Find 10 sample business plans here to help you launch your restaurant or bar business.
Find 3 sample business plans here to help you launch your retail business.
Find 10 sample business plans here to help you launch your sports and fitness business.
SWOT Analysis Examples
It’s not necessary to hire an expert to do a SWOT analysis for your business, you can quite easily do it yourself after checking out a few SWOT analysis examples online.
Seeing how a SWOT analysis can be implemented in a variety of ways is useful when you are busy with your business plan research and preparation; here are three SWOT analysis examples illustrating how this approach can be tailored to suit pretty much all areas of your business.
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