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The Market Analysis section of a business plan is crucial, providing detailed insights into the business environment. It helps entrepreneurs understand their industry, target markets , competition, and the broader economic landscape. This analysis is essential for informed decision-making, strategic planning, risk mitigation, and building investor or banker confidence.

However, before diving into the details of market analysis, it’s imperative for entrepreneurs to have a profound understanding of their target customer.

This foundational step is crucial as it shapes the entire market analysis process, ensuring that the insights gained are relevant and actionable for your specific business idea.

Divergent Paths to Understanding Your Customer

• Model-Based Planning®:  Ideal for experienced entrepreneurs in well-defined industries, Model-Based Planning® offers a structured, model-specific framework. It includes pre-developed customer profiles that guide focused market analysis.
• Pre-Vision Interviews:  Suited for entrepreneurs at the idea phase or those entering new markets, Pre-Vision Interviews establish deep customer understanding. This approach is crucial for businesses that aim to be first-movers or fast-followers and is often vital for those seeking investor capital. For entrepreneurs at the idea stage or entering new markets, delve into the detailed customer insights with Pre-Vision Interviews by   clicking here .

With a clear understanding of your customers, through either Model-Based Planning® or Pre-Vision Interviews , you’re now ready to delve into the various components of Market Analysis, as detailed in the following sections of this webpage.

Components of Market Analysis

Market analysis summary.

• Role as a Synthesis of Findings:  The Market Analysis Summary encapsulates the key findings from your market research . It serves as an executive overview, providing a snapshot of the market’s health, potential, and challenges. This summary should highlight significant points such as market size, growth projections, key trends, and competitive landscape.
• Writing it Last:  It’s recommended to write the summary after completing all other sections of the market analysis. This approach ensures that the summary accurately reflects the comprehensive understanding gained from detailed research.

Detailed Market Analysis

• Understanding Market Size, Growth Rate, and Trends:  Assess the size of the market, its growth rate over time, and key trends affecting it. This includes demographic shifts, technological advancements, and changes in consumer behavior. Use reliable data sources and forecasting methods to provide a well-rounded view of the market.
• Identifying Target Market Segments:  Define the specific customer segments within the market that your business will target. Consider factors like demographics , psychographics, geographic location, and buying behaviors. Tailor your marketing strategies to these segments to maximize impact and efficiency.

Industry Analysis

• Current State of the Industry:  Provide an overview of the industry, including its history, current status, and major players. Discuss the industry’s regulatory environment and any recent changes that might affect the business.
• Industry Structure and Dynamics:  Analyze the industry’s structure, including its supply chain , distribution channels , and major competitors. Evaluate the industry’s competitive dynamics, market entry barriers, and typical profit margins.

Trends Analysis

• Identifying and Evaluating Trends:  Identify current and emerging trends within the industry and market. These could be technological advancements, changes in consumer preferences, or shifts in regulatory policies. Analyze how these trends will impact the industry and your business specifically.
• Impact of Trends on Industry and Target Market:  Discuss the potential opportunities and threats these trends present. Plan strategies to leverage opportunities and mitigate risks associated with these trends.

Competitor Analysis

• Identifying Key Competitors:  List the major competitors in your market, focusing on those directly competing with your business. Assess their market share, strengths, weaknesses, and strategic positioning.
• Assessing Competitors’ Strengths, Weaknesses, and Strategies:  Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) for each key competitor. Understand their strategies and how they have been successful or fallen short in the market.

Utilizing Research Tools in Market Analysis

Role of ibis world, esri, and statista in market research.

• IBIS World:  IBIS World is renowned for its comprehensive collection of industry reports and business environment profiles. It offers detailed insights into market conditions, industry trends, and competitive landscapes. These reports are pivotal for understanding industry dynamics and forecasting future market developments.
• ESRI:   ESRI , particularly through its ArcGIS platform, provides a wealth of location-based data and analytics. ESRI’s Market Potential data, for example, offers insights into consumer behavior and demand across various product and service categories. This data is instrumental in understanding geographical market trends and potential customer bases, making it invaluable for businesses seeking to target specific locations or demographics​​​​​​.
• Statista:   Statista is a leading statistics portal, offering access to data from market and opinion research institutions, as well as from business entities and government institutions. It’s a versatile tool for market analysis, providing up-to-date data on various industries, including market sizes, trends, and forecasts.

Leverage These Tools for Quality Research

• Deep Dive into Industry Reports:  Utilize IBIS World for in-depth industry reports to understand your market’s size, trends, and competitive landscape.
• Geographical and Demographic Analysis:  Use ESRI’s tools to analyze market potential based on location and demographics, helping to identify where your customers are and their spending behaviors.
• Statistical Data for Market Trends:  Leverage Statista for comprehensive statistical data to support your market size estimates, trend analysis, and forecasting.

Identifying Industry-Specific Resources

• Look for sources that provide up-to-date, comprehensive, and accurate data.
• Ensure the sources are recognized and respected within the industry.
• Consider the depth of information provided; more detailed reports often offer better insights.
• Trade associations often publish detailed reports on industry trends.
• Government databases can provide reliable statistics on various industries.
• Academic journals and publications can offer in-depth analysis and forecasts.

Incorporating these tools into your market analysis process will enhance the quality of your research, providing a solid foundation for your business plan.

Conducting Competitor Analysis

Importance of personal involvement in competitor research.

Engaging in competitor research personally offers invaluable insights. It allows you to observe and understand your competitors’ strengths and weaknesses from a customer’s perspective. This direct engagement is crucial for developing strategies to differentiate and compete effectively.

Techniques for Effective Competitive Analysis

• Talk to Competitors’ Customers:  Engaging with the customers of your competitors can provide candid insights into what they value and their experiences. This feedback is often more unfiltered and honest than promotional materials or sales pitches.
• Experience Competitors’ Offerings:  Purchase and use the products or services of your competitors. This firsthand experience can reveal strengths to emulate and weaknesses to exploit in your own offerings.
• Visit Competitor Locations:  If applicable, visit their physical establishments. Observe their customer service, store layout, product presentation, and overall customer experience.
• Analyze Competitor Websites:  Review their online presence, noting their branding, communication style, customer engagement, and online services. Look for areas where they excel or lack, providing opportunities for your business to stand out.
• Examine Online Reviews:  While being cautious of potentially manipulated reviews, pay special attention to less-than-perfect ratings. Trends in these reviews can highlight areas that customers feel need improvement.
• Market Positioning:  Understand how your competitors position themselves in the market. Analyze their marketing materials, advertising strategies, and any unique selling propositions they highlight.
• Pricing Strategies:  Observe their pricing models. Are they competing on price, quality, service, or innovation? Understanding their approach can guide your own pricing strategy.
• Supplier and Partner Relationships:  Investigate their supply chain and partnerships. This might give insights into their operational efficiencies or dependencies.
• Customer Service Analysis:  Evaluate their customer service approach. Are there gaps in their customer support that your business could fill?
• Social Media Engagement:  Analyze their social media presence. How do they interact with customers online? What kind of content generates the most engagement?
• Employee Feedback:  If possible, gain insights from current or former employees about the internal workings of the competitor’s business. This can provide a unique perspective on their operations, culture, and challenges.

Outsourcing Market Analysis

When to consider outsourcing.

Outsourcing market analysis can be a strategic decision for businesses, especially when internal resources are limited or when specialized expertise is required. Consider outsourcing when:

• Lack of In-House Expertise:  If your team lacks the skills or experience in conducting in-depth market research.
• Time Constraints:  When you’re under tight timelines to develop a business plan and need to expedite the research process.
• Need for Specialized Knowledge:  Certain industries or markets may require specialized knowledge that an external expert or agency can provide.
• Objective Perspective:  Sometimes, an external perspective can provide unbiased and fresh insights that internal teams might overlook.

Business Plan Writer Reviews

For guidance on choosing the right professional or agency for outsourcing your market analysis, check out our Business Plan Writer Reviews .

Essential Qualifications of Professional Business Plan Writers

When hiring a professional for market analysis, ensure they possess the following qualifications:

• Active Subscriptions to Key Research Organizations:  Verify that they have access to essential market research tools like IBIS World, ESRI, Statista, and others relevant to your industry. Active subscriptions indicate that they can provide current and comprehensive data.
• Experience and Expertise in Diverse Industry Research:  Look for professionals with a proven track record in conducting market analysis across various industries. This experience demonstrates their ability to adapt research methods to different business models and market conditions.
• Understanding of Different Business Models:  The consultant should understand various business models, especially if your business falls into a niche or emerging market. Their ability to adapt their research methodology to fit different models is crucial.
• Analytical Skills:  They should possess strong analytical skills to interpret data effectively and provide actionable insights.
• Communication Skills:  Good communication skills are essential for them to convey complex information in an understandable manner, aligning with your business needs.
• References and Past Work Samples:  Ask for references or samples of their past work to assess the quality and relevance of their research.

Market Analysis in Your Business Plan

Conducting a thorough market analysis is an indispensable part of developing a robust business plan. It provides critical insights into the market size, growth potential, industry trends, competitive landscape, and customer preferences. This analysis forms the foundation upon which strategic decisions are made, risks are assessed, and opportunities are identified.

The insights gained from the market analysis should be seamlessly integrated into your business plan.

A well-executed market analysis can significantly enhance the effectiveness and persuasiveness of your business plan, especially in the eyes of stakeholders, bankers, or potential investors.

Up Next: Developing the Organizational Structure

Having completed the market analysis, the next step in your business planning journey is to develop the organizational structure of your business. This involves outlining the management team, defining roles and responsibilities, and establishing the operational framework of your organization. A clear and efficient organizational structure is crucial for effective management and smooth operation.

Proceed to Organizational Structure

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8 Components of a Business Plan

Back to Business Plans

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on February 19, 2023

A key part of the business startup process is putting together a business plan , particularly if you’d like to raise capital. It’s not going to be easy, but it’s absolutely essential, and an invaluable learning tool. 

Creating a business plan early helps you think through every aspect of your business, from operations and financing to growth and vision. In the end, the knowledge you’ll gain could be the difference between success and failure. 

But what exactly does a business plan consist of? There are eight essential components, all of which are detailed in this handy guide.

1. Executive Summary 

The executive summary opens your business plan , but it’s the section you’ll write last. It summarizes the key points and highlights the most important aspects of your plan. Often investors and lenders will only read the executive summary; if it doesn’t capture their interest they’ll stop reading, so it’s important to make it as compelling as possible.

The components touched upon should include:

• The business opportunity – what problem are you solving in the market?
• Your idea, meaning the product or service you’re planning to offer, and why it solves the problem in the market better than other solutions.
• The history of the business so far – what have you done to this point? When you’re just getting started, this may be nothing more than coming up with the idea, choosing a business name , and forming a business entity.
• A summary of the industry, market size, your target customers, and the competition.
• A strong statement about how your company is going to stand out in the market – what will be your competitive advantage?
• A list of specific goals that you plan to achieve in the short term, such as developing your product, launching a marketing campaign, or hiring a key person. 
• A summary of your financial plan including cost and sales projections and a break-even analysis.
• A summary of your management team, their roles, and the relevant experience that they have to serve in those roles.
• Your “ask”, if applicable, meaning what you’re requesting from the investor or lender. You’ll include the amount you’d like and how it will be spent, such as “We are seeking $50,000 in seed funding to develop our beta product”. 

Remember that if you’re seeking capital, the executive summary could make or break your venture. Take your time and make sure it illustrates how your business is unique in the market and why you’ll succeed.

The executive summary should be no more than two pages long, so it’s important to capture the reader’s interest from the start. 

2. Company Description/Overview

In this section, you’ll detail your full company history, such as how you came up with the idea for your business and any milestones or achievements. 

You’ll also include your mission and vision statements. A mission statement explains what you’d like your business to achieve, its driving force, while a vision statement lays out your long-term plan in terms of growth. 

A mission statement might be “Our company aims to make life easier for business owners with intuitive payroll software”, while a vision statement could be “Our objective is to become the go-to comprehensive HR software provider for companies around the globe.”

In this section, you’ll want to list your objectives – specific short-term goals. Examples might include “complete initial product development by ‘date’” or “hire two qualified sales people” or “launch the first version of the product”. 

It’s best to divide this section into subsections – company history, mission and vision, and objectives.

3. Products/Services Offered 

Here you’ll go into detail about what you’re offering, how it solves a problem in the market, and how it’s unique. Don’t be afraid to share information that is proprietary – investors and lenders are not out to steal your ideas. 

Also specify how your product is developed or sourced. Are you manufacturing it or does it require technical development? Are you purchasing a product from a manufacturer or wholesaler? 

You’ll also want to specify how you’ll sell your product or service. Will it be a subscription service or a one time purchase?  What is your target pricing? On what channels do you plan to sell your product or service, such as online or by direct sales in a store? 

Basically, you’re describing what you’re going to sell and how you’ll make money.

4. Market Analysis 

The market analysis is where you’re going to spend most of your time because it involves a lot of research. You should divide it into four sections.

Industry analysis 

You’ll want to find out exactly what’s happening in your industry, such as its growth rate, market size, and any specific trends that are occurring. Where is the industry predicted to be in 10 years? Cite your sources where you can by providing links. 

Then describe your company’s place in the market. Is your product going to fit a certain niche? Is there a sub-industry your company will fit within? How will you keep up with industry changes? 

Competitor analysis 

Now you’ll dig into your competition. Detail your main competitors and how they differentiate themselves in the market. For example, one competitor may advertise convenience while another may tout superior quality. Also highlight your competitors’ weaknesses.

Next, describe how you’ll stand out. Detail your competitive advantages and how you’ll sustain them. This section is extremely important and will be a focus for investors and lenders. 

Target market analysis 

Here you’ll describe your target market and whether it’s different from your competitors’.  For example, maybe you have a younger demographic in mind? 

You’ll need to know more about your target market than demographics, though. You’ll want to explain the needs and wants of your ideal customers, how your offering solves their problem, and why they will choose your company. 

You should also lay out where you’ll find them, where to place your marketing and where to sell your products. Learning this kind of detail requires going to the source – your potential customers. You can do online surveys or even in-person focus groups. 

Your goal will be to uncover as much about these people as possible. When you start selling, you’ll want to keep learning about your customers. You may end up selling to a different target market than you originally thought, which could lead to a marketing shift. 

SWOT analysis 

SWOT stands for strengths, weaknesses, opportunities, and threats, and it’s one of the more common and helpful business planning tools.   

First describe all the specific strengths of your company, such as the quality of your product or some unique feature, such as the experience of your management team. Talk about the elements that will make your company successful.

Next, acknowledge and explore possible weaknesses. You can’t say “none”, because no company is perfect, especially at the start. Maybe you lack funds or face a massive competitor. Whatever it is, detail how you will surmount this hurdle. 

Next, talk about the opportunities your company has in the market. Perhaps you’re going to target an underserved segment, or have a technology plan that will help you surge past the competition. 

Finally, examine potential threats. It could be a competitor that might try to replicate your product or rapidly advancing technology in your industry. Again, discuss your plans to handle such threats if they come to pass. 

5. Marketing and Sales Strategies

Now it’s time to explain how you’re going to find potential customers and convert them into paying customers.  

Marketing and advertising plan

When you did your target market analysis, you should have learned a lot about your potential customers, including where to find them. This should help you determine where to advertise. 

Maybe you found that your target customers favor TikTok over Instagram and decided to spend more marketing dollars on TikTok. Detail all the marketing channels you plan to use and why.

Your target market analysis should also have given you information about what kind of message will resonate with your target customers. You should understand their needs and wants and how your product solves their problem, then convey that in your marketing. 

Start by creating a value proposition, which should be no more than two sentences long and answer the following questions:

• What are you offering
• Whose problem does it solve
• What problem does it solve
• What benefits does it provide
• How is it better than competitor products

An example might be “Payroll software that will handle all the payroll needs of small business owners, making life easier for less.”

Whatever your value proposition, it should be at the heart of all of your marketing.

Sales strategy and tactics 

Your sales strategy is a vision to persuade customers to buy, including where you’ll sell and how. For example, you may plan to sell only on your own website, or you may sell from both a physical location and online. On the other hand, you may have a sales team that will make direct sales calls to potential customers, which is more common in business-to-business sales.

Sales tactics are more about how you’re going to get them to buy after they reach your sales channel. Even when selling online, you need something on your site that’s going to get them to go from a site visitor to a paying customer. 

By the same token, if you’re going to have a sales team making direct sales, what message are they going to deliver that will entice a sale? It’s best for sales tactics to focus on the customer’s pain point and what value you’re bringing to the table, rather than being aggressively promotional about the greatness of your product and your business. 

Pricing strategy

Pricing is not an exact science and should depend on several factors. First, consider how you want your product or service to be perceived in the market. If your differentiator is to be the lowest price, position your company as the “discount” option. Think Walmart, and price your products lower than the competition. 

If, on the other hand, you want to be the Mercedes of the market, then you’ll position your product as the luxury option. Of course you’ll have to back this up with superior quality, but being the luxury option allows you to command higher prices.

You can, of course, fall somewhere in the middle, but the point is that pricing is a matter of perception. How you position your product in the market compared to the competition is a big factor in determining your price.

Of course, you’ll have to consider your costs, as well as competitor prices. Obviously, your prices must cover your costs and allow you to make a good profit margin. 

Whatever pricing strategy you choose, you’ll justify it in this section of your plan.

6. Operations and Management 

This section is the real nuts and bolts of your business – how it operates on a day-to-day basis and who is operating it. Again, this section should be divided into subsections.

Operational plan

Your plan of operations should be specific , detailed and mainly logistical. Who will be doing what on a daily, weekly, and monthly basis? How will the business be managed and how will quality be assured? Be sure to detail your suppliers and how and when you’ll order raw materials. 

This should also include the roles that will be filled and the various processes that will be part of everyday business operations . Just consider all the critical functions that must be handled for your business to be able to operate on an ongoing basis. 

Technology plan

If your product involves technical development, you’ll describe your tech development plan with specific goals and milestones. The plan will also include how many people will be working on this development, and what needs to be done for goals to be met.

If your company is not a technology company, you’ll describe what technologies you plan to use to run your business or make your business more efficient. It could be process automation software, payroll software, or just laptops and tablets for your staff. 

Management and organizational structure 

Now you’ll describe who’s running the show. It may be just you when you’re starting out, so you’ll detail what your role will be and summarize your background. You’ll also go into detail about any managers that you plan to hire and when that will occur.

Essentially, you’re explaining your management structure and detailing why your strategy will enable smooth and efficient operations. 

Ideally, at some point, you’ll have an organizational structure that is a hierarchy of your staff. Describe what you envision your organizational structure to be. 

Personnel plan 

Detail who you’ve hired or plan to hire and for which roles. For example, you might have a developer, two sales people, and one customer service representative.

Describe each role and what qualifications are needed to perform those roles. 

7. Financial Plan 

Now, you’ll enter the dreaded world of finance. Many entrepreneurs struggle with this part, so you might want to engage a financial professional to help you. A financial plan has five key elements.

Startup Costs

Detail in a spreadsheet every cost you’ll incur before you open your doors. This should determine how much capital you’ll need to launch your business. 

Financial projections 

Creating financial projections, like many facets of business, is not an exact science. If your company has no history, financial projections can only be an educated guess. 

First, come up with realistic sales projections. How much do you expect to sell each month? Lay out at least three years of sales projections, detailing monthly sales growth for the first year, then annually thereafter. 

Calculate your monthly costs, keeping in mind that some costs will grow along with sales. 

Once you have your numbers projected and calculated, use them to create these three key financial statements: 

• Profit and Loss Statement , also known as an income statement. This shows projected revenue and lists all costs, which are then deducted to show net profit or loss. 
• Cash Flow Statement. This shows how much cash you have on hand at any given time. It will have a starting balance, projections of cash coming in, and cash going out, which will be used to calculate cash on hand at the end of the reporting period.
• Balance Sheet. This shows the net worth of the business, which is the assets of the business minus debts. Assets include equipment, cash, accounts receivables, inventory, and more. Debts include outstanding loan balances and accounts payable.

You’ll need monthly projected versions of each statement for the first year, then annual projections for the following two years.

Break-even analysis

The break-even point for your business is when costs and revenue are equal. Most startups operate at a loss for a period of time before they break even and start to make a profit. Your break-even analysis will project when your break-even point will occur, and will be informed by your profit and loss statement. 

Funding requirements and sources 

Lay out the funding you’ll need, when, and where you’ll get it. You’ll also explain what those funds will be used for at various points. If you’re in a high growth industry that can attract investors, you’ll likely need various rounds of funding to launch and grow. 

Key performance indicators (KPIs)

KPIs measure your company’s performance and can determine success. Many entrepreneurs only focus on the bottom line, but measuring specific KPIs helps find areas of improvement. Every business has certain crucial metrics. 

If you sell only online, one of your key metrics might be your visitor conversion rate. You might do an analysis to learn why just one out of ten site visitors makes a purchase. 

Perhaps the purchase process is too complicated or your product descriptions are vague. The point is, learning why your conversion rate is low gives you a chance to improve it and boost sales. 

8. Appendices

In the appendices, you can attach documents such as manager resumes or any other documents that support your business plan.

As you can see, a business plan has many components, so it’s not an afternoon project. It will likely take you several weeks and a great deal of work to complete. Unless you’re a finance guru, you may also want some help from a financial professional. 

Keep in mind that for a small business owner, there may be no better learning experience than writing a detailed and compelling business plan. It shouldn’t be viewed as a hassle, but as an opportunity! 

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Business Plan Demographics – Defining a Target Market

Sorting through demographic information is one of the first steps in doing market research and competitive analysis. This is stuff you’ll need to know in order to prepare an effective business plan. Without this information, you, as a founder, don’t know if there is a sufficient market to support your business. You will also be starting off at a disadvantage when planning other aspects of your business.

**Note: this business plan demographics guide was written just before the Census Bureau changed its primary portal for data from the American FactFinder to Data.Census.Gov .

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Complete the form below and click Submit . Upon email confirmation, the workbook will open in a new tab.

Keep in mind that this workbook is only designed to work with table S0201 , Selected Population Profile in the United States . Any other table might not be in the correct format.

About these posts

This series of posts was written to convey my take on how to write a business plan. My intent is to follow up with several more posts after this one.

I’m using the U.S. Small Business Administration (SBA) Plan your business guide as my outline ( link ). In true SpreadsheetsForBusiness.com fashion – I plan to include free downloadable spreadsheets where appropriate.

Rather than just recycling the same information you could find elsewhere, I’m going to take this journey with you. I’ll be building my own business plan as I write these posts. This is my first business plan, so you’ll be learning right along with me.

My business plan

My plan is based around a hypothetical business that will manufacture and market a hair regrowth product for men (and women, I suppose). The plan is to manufacture the product with all-natural ingredients.

What are business plan demographics?

Sorting through demographic data for your business’ potential customers is the first step in understanding what type of person (or business) might be interested in your product or service.

It can provide an unofficial ceiling to the number of customers you might expect. It’s from this information you can get into more detail about demand, market saturation, pricing, and so on.

Common demographic information includes:

• Marital status
• Employment status
• Geographic area

Why worry about business plan demographics?

Focusing on marketing to specific individuals helps you plan with clarity. The saying goes: “you can’t please all the people all the time.” By not trying to market to everyone a little bit, you can focus your efforts on creating a really good experience for some people.

Understanding your target demographics can help you determine if your target market is saturated. Read this post: CALCULATING MARKET SATURATION FOR YOUR BUSINESS PLAN

Whatever your business is, it probably is a reflection of yourself. Your interests and talents, that is. Who you market to will also depend on your characteristics and preferences. So, as you choose the demographics of your avatar, consider who you identify with and would be comfortable marketing to.

How to find and analyze business plan demographics

The market for a product or service is quantified by the number of people who make it up and the total amount of money they spend. We can quantify the size of the market by segmenting people based on their demographic characteristics

Of course, since most of this information is numerical, I’ll be using a spreadsheet to keep track of what I found and what changes in variables mean for the market of my aspiring business.

Also, I’ll be using online resources for the sake of time and simplicity. Theoretically, market research could involve things like focus groups and surveys. That’s more involved than I want to get for this idea, so, I’ll stick with the free information.

The SBA has a nice list of resources for market and competitive analysis here .

Demographic information

Here, we’re just looking for basic information about the people who I might be selling to. For instance, how many people are in the age range that I would market to? How much money do they make? Are they single and looking to mingle? Or, are they in committed relationships and proud of their bald head (like a certain “old man” I used to know and miss very much)?

From FactFinder to spreadsheet

First stop is the U.S. Census FactFinder ( link ).

Here, you can find Census data about your state, city, or even zip code. Not every business is going to be nationwide. Some, like a restaurant, will be very local.

Also, if your business will market to other businesses (B2B), then the information contained here may or may not be pertinent to you. Try another part of the Census website called the Small Business Edition ( link ) if you’re not finding what you need.

Interested in mining the Census website for more valuable market research? Read this post: CENSUS DATA MARKET RESEARCH AT THE NEW DATA.CENSUS.GOV

Since, as of now, I envision my business being nationwide (at the very least regional), I chose to use the “Guided Search.” From there, in the “Topics” section, I chose to look at information pertaining to age, sex, age group, income/earnings (households), and marital status.

I can always delve into more detail or retrieve different information at a later time. My hope is that this gets me started.

Additionally, on the next screen, I chose to break the information down by region. I included all regions so that I could total them for a view of the entire country.

Finally, on the last screen, I opted to see the one table that outlined this information in 2017, the latest year available.

Don’t bother with the “Download” Action. It will give you your data in a different format than it is displayed.

Instead, just highlight everything in the FactFinder table and copy + paste it in a spreadsheet.

Fixing errors

From there, do a Find and replace in your spreadsheet to get rid of the errors that are a result of a “=” being placed in front of the “+/-.01” in the Margin of error column. Replace the “=” with an apostrophe. Be sure to Also search within formulas .

Filtering for the demographic information I need

My goal here is to get a range of the number of potential customers based on a set of demographic statistics. I have a lot more information than I need, so let’s see if we can widdle this down into something more useable.

To do this, I added some columns to the Demographic Info worksheet.

First of all, I added a column ( Estimate # ) that aimed to translate some of the percentage population information into quantities. The format of every download from FactFinder isn’t going to be the same. But, an attempt was made to give you access to both percentage and quantity information for each line item.

Additionally, you’ll find a column named Enter 1-10 to rank demographics . Here, you’ll be able to rank demographic information and narrow down your market on the Pick Demographics worksheet.

Want to nail down the size of your market before you move forward? Read this post: MARKET SIZE FOR A BUSINESS PLAN – 2 METHODS TO GAUGE IT

Creating customer avatars

Maybe you have a couple of different mixes of demographics in mind. That’s fine. Once you are satisfied with one mix of demographics you can highlight the information on the Pick Demographics worksheet, then copy and paste the values (Ctrl + Shift +V) into one of the boxes on the Customer Avatars worksheet.

This allows you to keep tabs on several different customer profiles as you move forward with your business plan.

Keep in mind, this is just the first step of the business plan. The whole point of a plan such as this is to be proactive. In order to be proactive, you’re going to have to be flexible.

If, as you move along through the steps, you reconsider your target demographic – that’s fine. Just circle back and refine your avatars and make adjustments to other parts of the plan as necessary. Don’t get discouraged if you have to do this. That is the whole point of this exercise.

For my avatars, I created four, relatively similar mixes of demographic characteristics.

Gender and income

All include males. Though females can also suffer from hair loss, I am assuming that males would be the primary customer and who the majority of marketing would be geared toward.

Next, every mix of demographics included individuals with earnings as opposed to those with retirement income , with Social Security income , or any other type of public assistance.

Right now, I anticipate that this product would be sold at a premium price due to its uniqueness and all-natural ingredients. This would mean that customers would likely need to earn above-median incomes in order to be in a position to buy a product such as this. Assumptions such as this might change as I progress through this business plan.

In three out of my four avatars, I made assumptions about the relationship status of these men. The demographics included were Now married, except separated , Never married , and Separated . These were my three main avatars.

The fourth included Males , With earnings , and who were High school graduates . This is my “catch-all” avatar. The real total addressable market for my product is probably between this population and the total of the three mentioned above.

The main difference between the three main avatars had to do with education. I assumed that men who were single might be more likely than married men to purchase a product such as this, I lowered the EDUCATION ATTAINMENT to Some college or associate’s degree .

Defining a target market with business plan demographics

Be sure to download your own copy of the workbook used in this post. Just fill out the form at the top.

What other sources would you use to find demographic information for your business plan?

How about the avatars? How would you have screened them further?

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The Perfect Business Plan Outline

Written by Dave Lavinsky

The layout of a business plan is not an area where great imagination and creativity is needed or recommended. It should be a more or less straightforward task to layout or outline your plan, using industry standard practices which funders have become familiar with through thousands of business plans. Use the following steps to implement this standard layout and save creativity for your business venture within the plan.

Download our Ultimate Business Plan Template here >

Start by getting your hands on a business plan template. This will speed your time to completing your plan. Business plans generally start with an executive summary and company overview, move through background research and market analysis, customers, and competition, describe the company’s intended methods in the marketing plan and operation plan, show who’s on the management team, and conclude with the financial plan and appendices featuring full financial statements.

Use the business plan template to guide your understanding of each section and to see how they relate to each other. Don’t assume that any one example should dominate your understanding unless it comes from an extremely trusted source with a reputation for business plan expertise and success.

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Sample Outline For Your Business Plan

1. executive summary.

Your executive summary is the most important part of your plan. It comes at the beginning and is the first thing potential investors or lenders will read. If they aren’t excited by what they see, they’ll unfortunately stop reading. So make sure your executive summary gives a quick overview of what your company does and explains, in an exciting tone, why your company will be successful.

In your Company Description, provide background on your company. What is your business structure? What is your mission statement? What have you accomplished to date? Here you will let readers know the history of your business.

In the Market Analysis section of your business plan provide background on the industry in which you operate. Conduct market research to make this section concrete and compelling. Answer questions such as: how big is your industry? what trends are affecting it?

Here you will document your target market. How are they? How many are there? What are their likes and dislikes? Ideally you can provide comprehensive demographic and psychographic profiles of your target customers and show how your company’s product or service are ideally suited to their needs.

In this section of your traditional business plan, document your key competitors. Explain their strengths and their weaknesses. Remember that investors and lenders expect you to have direct competitors. They just want to feel confident that despite them, you can still achieve lasting success. You should also explain your competitive advantage for beating these competitors.

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Your marketing strategy should primarily focus on the promotional methods you will use to attract new customers. Will you use search engine marketing? Will you employ radio ads? Document each of the promotional methods you will use. What is your pricing strategy?

This section of your plan should discuss the key roles that your company must expertly perform and your strategies for operational excellence. You must also outline the long-term milestones your company plans to accomplish and the key dates for each.

In your Management Team section, detail the key members of your team. Document their backgrounds and how their past experiences make them well suited to succeed in your organization.

Here you will layout the key assumptions used in creating your financial model and then provide topline results from your income statement, balance sheet and cash flow statement. If you are seeking funding, document the amount of funding you seek and the key uses for it.

In your Appendix, you will provide supporting information such as employee or customer agreements, store layouts, etc. You must also include your full, five-year financial projections.

By following the comprehensive business plan outline, you will ensure your plan is in the format investors and lenders expect.

OR, Let Us Write a Business Plan For You

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Business Page Layout FAQs

How do i layout a business plan.

Laying out a well-crafted business plan is not, and should not, be complicated. You can lay out your business plan using our sample business plan outline discussed above. An organized business plan structure is key to a successful business plan.

What is a business plan outline?

A business plan outline allows you to organize your plan and present it in the format that’s most compelling to readers. Also, by starting with your outline, it’s easier to add the required information into the key elements of a comprehensive business plan.

Other Helpful Business Plan Articles & Templates

• What are the Key Components of a Business Plan?
• Business Planning

A business plan is a written document that outlines a company’s goals, strategies, and expectations for the future. It is an essential tool for entrepreneurs and business owners looking to start a new business or grow an existing one. A well-written business plan provides a roadmap for the company’s success.

Business plans vary in complexity, but generally, they include the following sections:

1.  Executive Summary:

The executive summary section of a business plan should consist of a brief, high-level overview of the entire business plan. It should highlight the key points and including the company’s vision, goals, and strategies. It’s usually the first section of the document. Consequently, it should be written in a way that captures the reader’s attention and interest.

2.  Company Description:

The company description section of a business plan should provide a comprehensive overview of the company. It should aim to provide the reader with a clear understanding of the company’s unique value proposition, competitive advantages, and potential for growth and success. This includes its mission , history, products or services, market opportunity and business model. It should also include information about ownership and management, legal structure, location and facilities and financial status.

This section of a business plan should start with a mission statement that describes what business the organisation is in (and what it isn’t) both now and projecting into the future. It should also explain the company’s purpose and values, followed by a chronological overview of the company’s founding and evolution.

Finally, the company description should also describe the products or services offered, including unique features and benefits, and explain the market need that they fulfil.

3.  Market Analysis:

The market analysis section of a business plan should provide an overview of the industry and target market. This should include the industry size, growth, and trends, as well as the ideal customer’s demographics and psychographics.

This section should also segment the target market into smaller groups with similar characteristics. It should estimate the total market size and expected growth rate and project the company’s potential market share.

Additionally, it should evaluate the competitive landscape. This should identify any barriers to entry, regulatory environment and economic factors that could impact the industry.

Overall, the market analysis section of a business plan aims to provide a comprehensive understanding of the industry and target market to inform the business’s overall strategy.

4.  Management team:

The management team structure section of a business plan outlines the key personnel responsible for leading and managing the company. This may include the CEO, CFO, and COO, as well as any other relevant executive positions.

This section of the business plan should describe the experience and qualifications of each member of the management team. It should also define their roles and responsibilities and how they will work together to achieve the company’s strategic goals . It is important to highlight their skills and expertise, as well as their ability to work effectively as a team.

Additionally, the section may include an organisational chart and examples of past accomplishments.

5.  Company structure:

The company structure section of a business plan should provide a detailed overview of the company’s legal structure and management team. It should discuss the company’s legal structure, such as whether it is a sole proprietorship, partnership, LLC, corporation or other form of organisation.

This section of the business plan should also provide information on the company’s management team, including key personnel, their roles, responsibilities, relevant experience and qualifications. An organisational chart may be included to show the company’s hierarchy.

The company structure section may also describe the company’s culture and values, including its mission and vision statements . It may also include details about commitment to social responsibility and sustainability. In addition, it can describe other cultural aspects relevant to the company’s identity.

The purpose of this section is to provide a clear understanding of the company’s structure, legal requirements and key personnel, as well as its culture and values.

6.  Marketing Plan:

The marketing plan is an important component of the overall business plan. It helps to demonstrate how the company will attract and retain customers, differentiate its products or services from those of competitors and generate sufficient revenue to meet financial objectives. A well-conceived marketing plan is crucial for the success of the company in the marketplace over the long term.

The marketing section of a business plan typically outlines the strategies and tactics that a company will use to promote and sell its products or services. This can include information on the target market, competitive analysis, pricing strategy, distribution channels, and promotional activities such as advertising, public relations, and sales promotions.

7.  Sales Plan:

The sales plan section of a business plan should provide a clear statement of the company’s sales goals. It should include  the methods and tactics that will be used to achieve these goals. In addition, it will have a detailed explanation of the sales process from lead generation to closing the sale.

The sales plan should also outline the sales team structure, roles, and responsibilities, the sales budget and how it will be allocated across different activities. It will also have key performance indicators that will be used to measure the effectiveness of the sales plan. Finally, the sales plan should include a description of how the company will manage and maintain relationships with customers to ensure customer retention.

8.  Operational Plan:

The operational plan section of a business plan is meant to provide an in-depth explanation of how a company will function on a daily basis. It is intended for internal use and should be detailed enough to guide decision-making.

The operational plan should cover areas such as the company’s facilities, equipment, technology and production processes. It should also detail staffing needs and human resources policies, as well it’s customer service policies.

The purpose of the operation plan is to help the internal audience understand how the company will operate and make decisions. This shows how the company will be able to successfully execute its business plan.

9.  Financial Plan:

This section of the business plan presents the company’s financial forecasts, including revenue, expenses, profits and cash flow projections. It also includes the company’s break-even analysis and return on investment (ROI) calculations.

The financial section should provide an overview of the financial projections for the business. This will include an income statement, balance sheet, cash flow statement and break-even analysis. It will also include a capital expenditure plan, financing plan and financial assumptions.

The information provided in the financial plan helps stakeholders understand the financial viability of the business. This helps to determine whether it is a good investment opportunity. The financial plan is an essential section of the business plan. It can help potential investors and lenders evaluate the financial health and potential profitability of the business.

10.  Risk Assessment:

The risk assessment section in a business plan helps identify potential risks and challenges a company may face. It also describes how the company plans to mitigate or manage them. A comprehensive risk assessment allows a company to better prepare itself for potential obstacles and ultimately increase its chances of success.

This section should identify both internal and external risks, assess the potential impact of each risk and describe risk management strategies. Additionally, the risk assessment section should outline a contingency plan for major risk events. It should describe how the company will monitor and update its risk assessment and management strategies over time. Overall, the risk assessment section is a critical component of a business plan. It helps the company understand and prepare for potential risks and challenges to increase its chances of success.

11. Activities and Projects:

This is one of the most important sections of a business plan. It identifies the steps that a company will take to move from where it is currently to where it wants to be in the future. It other words, it states how the company will achieve it strategic goals and vision. It is a critical part of the business plan because it demonstrates that the company has a well-thought-out plan for achieving its goals.

This section should outline the specific sort, medium and long-term operational goals that the company wants to achieve, along with the timeline for achieving them.

This section of the business plan should include a detailed plan of the specific activities and projects that the company will undertake. These may, for example, include product development, market research, sales and marketing activities, operational improvements and more. For each activity or project, the plan should include the resources needed, including financial, human, and technological resources, as well as a timeline for completion.

In conclusion, a well-written business plan is essential for the success of any business. A business plan is a written document that outlines a company’s goals, strategies and expectations for the future. It provides a clear roadmap for achieving business goals and objectives. It is an essential tool for entrepreneurs and business owners looking to start a new business or grow an existing one.

The components of a business plan will vary depending on the industry and company. However, the key elements mentioned in this article should be included in any business plan.

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The Essential Sections of a Business Plan

At the heart of starting a business process lies the business plan , a dynamic document that encapsulates the essence of your venture and charts its course towards success. As seasoned experts in the realm of business planning, we understand the critical importance of crafting a comprehensive and meticulously detailed plan. In this guide, we will provide you with a step-by-step approach to creating a truly exceptional business plan.

Creating a business plan is an integral step for any entrepreneur or business owner looking to establish a successful venture. A well-crafted business plan serves as a roadmap, guiding the company towards its goals and objectives while also providing crucial insights for investors, stakeholders, and internal teams. In this article, we delve into the essential sections that comprise a comprehensive business plan, equipping you with the knowledge to develop a robust strategy for your business.

1. Executive Summary: Setting the Stage for Your Business Plan

The executive summary serves as the gateway to your business plan, offering a succinct yet compelling overview of your venture. It encapsulates the essence of your business, highlighting its mission, vision, objectives, and unique value proposition. Think of it as your elevator pitch – a concise and compelling summary that entices readers to delve deeper into the plan while providing a snapshot of the business’s potential and promise.

• Clearly articulate the mission, vision, and objectives of your business.
• Highlight the unique value proposition that sets your venture apart.
• Provide a snapshot of the market opportunity and potential for growth.
• Keep it concise, compelling, and focused on capturing the reader’s attention.

2. Company Description: Painting a Vivid Portrait of Your Business Plan

In the company description section, you have the opportunity to paint a vivid portrait of your business, providing readers with a comprehensive understanding of its essence and identity. Describe the history, background, and evolution of your company, clarifying its legal structure, ownership, and geographical footprint. Conduct a thorough industry analysis to contextualize your business within its broader ecosystem, highlighting key milestones, achievements, and competitive advantages.

• Describe the history, background, and evolution of your company.
• Clarify the legal structure, ownership, and geographical footprint.
• Conduct a thorough industry analysis to contextualize your business.
• Highlight key milestones, achievements, and competitive advantages.

3. Market Analysis: Navigating the Terrain

A robust market analysis forms the bedrock of any successful business plan, serving as a compass to navigate the complexities of the market landscape. Gather data on industry size, growth projections, and consumer demographics. Identify target markets and customer segments, conducting a competitive analysis to assess strengths, weaknesses, and opportunities. Uncover market trends, dynamics, and emerging opportunities that will shape your business strategy.

• Gather data on industry size, growth projections, and consumer demographics.
• Identify target markets and customer segments.
• Conduct a competitive analysis to assess strengths, weaknesses, and opportunities.
• Uncover market trends, dynamics, and emerging opportunities.

4. Product or Service Offering: Crafting a Compelling Proposition

At the heart of every business lies its product or service offering , the tangible expression of its value proposition to customers. Define your offering with clarity and precision, highlighting its unique features, benefits, and value proposition. Address how it addresses the needs and pain points of your target audience, and outline your product development roadmap to stay ahead of the curve.

• Define your product or service offering with clarity and precision.
• Highlight its unique features, benefits, and value proposition.
• Address how it addresses the needs and pain points of your target audience.
• Outline your product development roadmap and future enhancements.

5. Marketing and Sales Strategy: Orchestrating Success

A well-defined marketing and sales strategy is essential for driving customer acquisition, retention, and revenue growth. Establish clear objectives and key performance indicators (KPIs) to measure success. Develop a comprehensive marketing plan encompassing channels, tactics, messaging, and budgets. Align your sales strategy with your marketing efforts to drive conversions and revenue generation effectively.

• Establish clear marketing objectives and key performance indicators (KPIs).
• Develop a comprehensive marketing plan encompassing channels and tactics.
• Leverage a mix of online and offline channels to reach your target audience.
• Align your sales strategy with your marketing efforts to drive conversions.

6. Operations and Management: Building a Strong Foundation

The operations and management section provides insights into the operational framework and organizational structure of your business. Outline your day-to-day operations, including production processes, supply chain management, and quality control measures. Clarify roles, responsibilities, and reporting structures within the organization, emphasizing operational efficiency, scalability, and risk management.

• Outline your day-to-day operations and production processes.
• Clarify roles, responsibilities, and reporting structures within the organization.
• Highlight key personnel, their qualifications, and expertise.
• Emphasize operational efficiency, scalability, and risk management.

7. Financial Projections: Mapping the Future

Financial projections offer a glimpse into the future performance and profitability of your business, providing stakeholders with valuable insights for decision-making and investment. Develop comprehensive models to forecast revenues, expenses, and profitability over a predefined period. Incorporate realistic assumptions and scenario analyses, conducting sensitivity analysis to assess the impact of key variables on financial performance.

• Develop comprehensive financial models including income statements, balance sheets, and cash flow statements.
• Forecast revenues, expenses, and profitability over a predefined period.
• Incorporate realistic assumptions and scenario analyses.
• Conduct sensitivity analysis to assess the impact of key variables on financial performance.

8. Funding Requirements: Securing the Resources

If you’re seeking external funding to support your business growth, it’s imperative to articulate your requirements clearly and compellingly. Specify the amount of capital needed, the purpose of funds, and the desired sources of financing. Provide potential returns and exit strategies for investors, supported by robust financial projections and a compelling business case.

• Specify the amount of capital needed and the purpose of funds.
• Identify preferred sources of financing, whether equity investment or debt financing.
• Provide potential returns and exit strategies for investors.
• Support your funding proposal with robust financial projections and a compelling business case.

9. Appendix: Supporting Documentation

The appendix serves as a repository for supporting documentation and supplementary materials that provide additional context and validation for your business plan. Include resumes of key team members, market research reports, and legal documents. Supplement key arguments and claims with relevant materials, enhancing your credibility and reinforcing your business case.

• Include resumes of key team members, market research reports, and legal documents.
• Provide additional context and validation for your business plan.
• Supplement key arguments and claims with relevant materials.
• Use the appendix to enhance your credibility and reinforce your business case.

In conclusion, crafting a comprehensive business plan demands meticulous attention to detail, strategic foresight, and expert communication skills. By following this step-by-step guide and mastering each section of the business plan, you can create a compelling roadmap for success that resonates with investors, stakeholders, and internal teams alike. Armed with the insights and strategies outlined in this guide, you can navigate the complexities of business planning with confidence and chart a course towards sustainable growth and profitability.

At Peak Plans, we understand how essential a strong business plan or a pitch deck is to attaining success. Contact us now to learn more about our business planning services and how we can support you as you set up a successful business.

Visit us at  https://peakplans.co/  and schedule a free consultation if you need a well-written professional business plan or a pitch deck. At Peak Plans, we understand that a solid business plan or a pitch deck is the foundation of any successful venture. Contact us today to learn more about our business planning services and how we can help you achieve success.

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