Business Plan Writing: Market Research & Competitor Analysis
Updated: May 14, 2020
“The best vision is insight.” – Malcolm Forbes
In developing a business plan, it’s vital that you thoroughly research your customers, your market, and your competition, as well as your strategic position relative to all three.
Investors and others will be exceedingly interested to see that you understand your industry and the forces that drive it, that you can prove there’s a strong demand for your product or service, and that your unique selling proposition will effectively distinguish you from your competition.
This analysis will likely uncover new information you were previously unaware of, and you should take the time to reflect on exciting insights. Therefore, this could require you to rethink elements of your strategy. It may also merely confirm what you already know. In either case, you’ll acquire a deep understanding of what it will take to be successful.
Crucial Questions Your Business Plan Needs to Answer
Customers are the lifeblood of any business. People looking to invest in your company or provide financing need to see that you understand what they want and that you have a detailed plan for reaching them. To do this, you should focus your attention on four questions.
Who are your customers? Describe your target market. Perhaps create a marketing persona profile of the sorts of people you’re looking to reach, including their age range, income levels, lifestyle choices, interests, and more. What makes them tick?
What are their buying habits currently? Concerning the sorts of products or services you offer, what are they buying now? From whom are they buying and is it a repeat purchase? What do they generally spend monthly or annually?
What motivates them to buy? What are the features that drive their purchase decisions? Do they seek a low-price or value? How important is the choice?
How will you make them buy from you? Take the time to complete a synthesis of the answers to the first three questions. It would help you much if you can demonstrate how your strategy would satisfy your target market in a way that your competitors have failed to implement.