Conducting a Market Analysis for Your Business Plan
One of the most critical sections of your business plan is your market analysis. Find out just what information you need to know about your potential customers.
By Tim Berry | June 13, 2005 | 0
Every business plan should include market analysis. This is one of the first and most important reasons to do a business plan. And whether you're just starting a new business or reviewing an existing business, you should renew your market analysis at least every year. Markets change--a business needs to watch for changes in its market.
The market you need to look at is your potential market, not the actual market served, the one that's limited to your existing customers. Your target market is much wider than just the people you already reach. It's the people you might someday reach, or people you could reach, that you need to be concerned about.
For example, the market of a local movie theater or restaurant includes not just the people who regularly go there but everybody who lives within driving distance. The market for a landscaping business includes all the homes and commercial properties within a logical reach. The market for downloadable e-books over the internet includes everyone connected to the web. The market for personal computers includes homes, schools, businesses, and government organizations.
It's your plan--and every plan is different--so you need to know as much as you can about your target market.
Getting the Information
The information sources that will help you conduct a market analysis are different for every business plan. For example, you might need local information you can get from your local chamber of commerce. Or you might be able to find your market information at www.business.gov , which is a good source for information from the U.S. Census Bureau, the Department of Labor, the Department of Commerce and others. You might also need to find other...