A key part of any business plan is a market analysis. This section needs to demonstrate both your expertise in your particular market and the attractiveness of the market from a financial standpoint.
This article will focus on the basics of market analysis, and take a first look at what we mean exactly by market analysis before looking at how to make a good one for your business plan.
What is a Market Analysis?
A market analysis is a quantitative and qualitative assessment of a market. It looks into the size of the market both in volume and in value, the various customer segments and buying patterns, the competition, and the economic environment in terms of barriers to entry and regulation.
Goal of Market Analysis
The goal of a market analysis is to determine the attractiveness of a market and to understand its evolving opportunities and threats as they relate to the strengths and weaknesses of the firm.
Why Market Analysis?
The market analysis is one of the most important parts of any startup strategy. It can actually help reduce risk because if you really understand your potential customers and market conditions, you’ll have a better chance of developing a viable product or service. It should also help you get clear on what exactly makes you different from your competition, which can make or break your chances of standing out in a crowded landscape.
However, don’t fall into the trap of simply saying that your solution is for everyone. Ultimately, setting some parameters around your target market will help you focus your resources.
What to Include in Your Market Analysis?
Your market analysis should include an overview of your industry, a look at your target market, an analysis of your competition, your own projections for your business, and any regulations you’ll need to comply with.
Ultimately, making a market analysis will help you discover any blind spots. It should help you do some initial tests that will verify that your solution is actually addressing a real problem—and many startups don’t last simply because founders failed to figure out if anyone was interested enough in their solution to pay for it.
If you want to learn new things and learn strategies about the market, BWorldpedia is the site you should visit! We provide profound and useful insights about the market and across a plethora of topics related to it.