Home Budget 2007 Company Profile Services Accountancy Zone Business Zone Tax Zone IR35 Update News Articles Feedback Search Legal Notice How To Find Us Business plans - The market This section is designed to provide enough facts to convince an investor, potential partner or other reader that your business has enough customers in a growing industry, and can garner sales despite the competition. It is one of the most important parts of the plan, taking into account current market size and trends, and may require extensive research. Customers It is important to be thorough and specific when creating a description of the target customer for your product or service. This description defines the characteristics of the people you want to sell to and should indicate, among other things, whether your customers are cost or quality conscious, under what circumstances they buy, and what types of concerns they have. A common mistake is to describe customers in general terms, such as "people who need legal services". Instead, try to create a more detailed customer profile by asking yourself: Is you customer a business or consumer? If a business, who within it makes the buying decision? How do they access it (directly/wholesale/retail)? If a consumer, what age typically are they? What gender are they? What lifestyle do they typically have? Where are they located? What do they primarily base their buying decision on (price/service/quality)? How often do they buy your product/service? What need does your product/service fulfill? Market Size/Trends This section defines the total market size as well as the slice of the market your business will target. Use numbers as well as trend information to make a case for a viable current market and its growth potential. When discussing any market size, be sure to talk about factors affecting market growth - industry trends, socioeconomic trends, government policy, population shifts, and the like. Show how these trends will have a positive or negative impact on your specific business. Competition The competition section indicates where your products or services fit in the competitive environment. This proves that you understand your industry and may be prepared to cope with some of the barriers to your success. Present a short discussion of each of your primary competitors. If possible, include their annual sales and their market share. Each assessment should include why these companies do or do not meet their customers' needs. You should then explain why you think you can capture a share of their business. Strengths and weaknesses can fall into a number of different categories. Sales, quality, distribution, price, production capabilities, image, and breadth of products/services are all ways companies differentiate themselves. Ask yourself who is the price leader? Who is the quality leader? Who has the largest market share? Why have certain companies recently entered or withdrawn from the market? These factors are critical to a successful competitive analysis. Estimated Sales Estimated sales for your business are based on your assessment of the advantages of your product or service, your customers, the size of your market, and your competition. This should include sales in units and currency for the next three years, with the first year broken down by quarter. These numbers will be crucial to other financial documents you present later in the plan. Try not to use words like "conservative" in describing sales projections. Lenders are used to seeing this term preceding projections that are usually anything but conservative. Conversely, don't be over-optimistic. A common mistake is assuming your business will have a few modest years and then a dramatic increase in sales when "the market takes off." It often helps to present a number of different scenarios, such as "best case," "worst case," and "likely" to create a range of sales projections. [ Business Zone Home · Previous - Business Plans - Business Description · Next - Business Plans - Operational Factors ]