How To Write A Simple Business Plan: Find The Market
Proving the market for a business is an extremely important first step for a business plan
.Market Size
The market size must be significant enough that the business will be able to thrive, even if competitors enter the market and take some market share. For example, being a specialty book store in a small town may not be successful if the potential customers number only in the hundreds. Use demographic data to show the market size either based on geography or other aspects.
Customer Need Not Being Met
Next, it must be shown that there is a need in this customer market that is not being met. This could be a group using a certain product or service which is not entirely satisfying the need or a group currently using a substitute product. In any case, the problem must be important enough that the customers would be pay for a solution. With the advent of the web, this payment can be with their attention, as when customers frequenting a website without paying a dime. In this case, the business model may be to meet the needs of a third party (advertisers) by providing them a means to reach this group by buying ads on the site. To be financial feasible, the value of solving the need must be greater than the cost of providing the solution.
Competitors Not Positioned To Act
Finally, you should also show that the top competitors are not, for one reason or another, best positioned to act on this unmet need. This could be because they serve customers with different values or are solving a slightly different problem, for example. The competitive analysis should talk of the strengths and weaknesses of competitors with a focus on how your business can exploit those weaknesses to its advantage.
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