In my previous post I discussed the basics of framing your plan and how to set it up.
Moving forward, I would like to take more of the startup/entrepreneur/VC type of plan approach and start with the market analysis. This is because if you started with the corporate overview there wouldn’t be a whole lot to talk about at this point and if there was and there were prior rounds of funding I might start with that. If you are doing something really different you need to give it context and tell the story of why you should exist. I will of course cover the Corporate Overview section later.
You will also notice that I skipped the Executive Summary. Since it is a summary of everything I will talk about this last once we have covered all of the sections.
There are some basic things you should try and answer with the market analysis:
- Do you have a market?
- Is there a viable niche that makes sense to focus on first?
- Does your product or service fill a need or solve a problem?
- Can you appeal to cross-segments within your market by highlighting different aspects of your product?
- How should you price your product or service?
- Who are your potential customers? What are the various customer profiles?
- How will you deliver your product to the customer?
I break down the Market Analysis into four sub-sections:
- Market Overview – describe the market you are in or the market you are planning to enter: product coverage area, environment, additional product area if necessary and potential customers.
- Market Background – This provides historical data (i.e., market size, demographics, psychographics), needs and trends; buying patterns; preferences and market growth
- Market Challenges – Here is where you analyze data and focus on the unique issues that create the challenges and problems you see could be solved.
- Market Opportunity – This is where you used data in the previous to explore the problems and expose the opportunities that exist to discuss the opportunities to be solved.
NOTE: Remember to properly cite your sources of information within the body of your Market Analysis as you write it. You and other readers of your business plan will need to know the sources of the statistics or opinions that you’ve gathered from others. This is important that they see that the basis for your analysis comes from well known sources.
NEXT TIME: COMPANY OVERVIEW – After you have explained how compelling the problems and needs are, you will need to pitch who you are and what you do.