Put your research hat on, because the Market Analysis will make you search and dig until you know your industry inside out. This section has been known to break a few hearts, make you think outside the box, and rethink your products and services. You will analyze your industry, customers, and the competition. You want to show potential investors that you know your industry and there is a space in the market for your business. You also need to know this information for yourself to determine if your idea can indeed become a viable business. A comprehensive Market Analysis can be the difference between your company ballin’ out or falling down.
Start the Market Analysis off with a summary of your findings before breaking down the details. This section will include lots of numerical data, statistics, and metrics. Include charts and graphs to illustrate this information to make it more understandable and clear. Be sure to relate all of your research to your business. Focus in on what it is about your products and services that uniquely relates to the data.
Ultimately, the purpose of the Market Analysis to determine if there is anybody out there who wants or needs what you are selling and if they are they willing to spend their money with YOU to get it.
1. Industry Description
Give a thorough overview of the industry you are in. Is this a new or existing industry? What are the primary products and services offered by the businesses already in the game? What are the average prices being charged? What are the the current trends and growth rates? What are gaps in the industry that your company can fill?
2. Identify your Target and Niche Markets
New business owners often get target market (who) confused with niche market (who + what). Demographics such as gender, income, age, marital status, and geographical location identify your target market. Psychographics such as why a person makes a particular purchase, their hobbies, and values also help identify your target. Your niche market is very specific and includes what desire, need, or problem you are serving. For example, my target market is single mothers. My niche is single mothers who are small business owners. Who is your ideal client/customer? What needs do they have that is not being offered by your competition?
3. Competitive Analysis
You are not the only kid on the block. There are other businesses out there who are, in general, offering the same products and services you are. What 3 businesses are your primary competition? What do they offer? Where are they located? How much do they charge? What are their strengths and weaknesses? What do they not offer that you do? What do they offer that you don’t? What is their market share? How are they marketing? Put on your virtual sunglasses and floppy hat and get to investigating, honey! Visit their websites and physical locations to get a first hand feel of your competition.
4. Get in where you fit in
Be specific about where your business fits in the industry landscape, and how you serve a market need, especially a need that your competition does not. Why will a customer buy from you instead of the business down the street? Breakdown what you anticipate your market share to be. Of all of the money potential customers spend on the products and services you offer, how much of it will be spent with you?
Certain businesses require licensing, registration, or credentials. If you are planning to open a daycare, you don’t just write a stellar business plan, buy some toys, and hang an “Open For Business” sign on the door. You have to be licensed by the state, have an inspection done on your facility, be certified in CPR, pass a background check , etc. After a certain period of time, certain requirements have to be renewed. Find out exactly what is required of you and explain how you will remain compliant.
This section will take some time to complete and it is worth every minute. Showing up into the market with nothing different about you is more devastating than Hollywood diva showing up on the red carpet with the same dress as her nemesis. In business, researching ahead of time will give you the information you need so you can separate yourself from the competition and offer something that people will actually buy.
Below are some online resources to get you started. You can also contact your local Chamber of Commerce, library, or business organizations in your area. A good old fashioned Google search ain’t never hurt nobody. Just make sure you are getting data from reputable sources.
Until next time,
Rachel Henderson is a single mompreneur who helps other single mothers turn their pass ion into profit, while maintaining their home. She has over 20 years experience in accounting and business, and is now focused on spreading entrepreneurship among young single mothers. Her hobbies include cooking, shopping, and making gift baskets. She lives and plays with her three boys in sunny Los Angeles, CA. Her faith and the love of her family keeps her motivated every day. For more information visit www.mzrachelzplace.com.