Business Plan Company Description and Market Analysis
- September 1st, 2014
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Step 2: Business Plan Company Description
So we’ve already established that although your executive summary will appear first, it will be written last. That means that the first part of your business plan that you’ll need to write is your company description. Your executive summary will have a brief overview of your company description, but this is the section where you really get to showcase every element of your business. Consider this an extension of the elevator pitch you’d give someone regarding your business—go a bit deeper into your goals and the uniqueness of your company.
What to Include in Your Company Description
Explain the essence of your business, the industry it falls within, and the consumer need that you intend to satisfy.
Describe the way you anticipate your products and/or services will meet those needs.
Detail the specific audience—individual consumers, businesses, and/or organizations—that your company will serve.
List the ways in which your company has a competitive edge in its industry, which will lead your company to success, such as expert employees, operational efficiency, prime location, or your unique ability to provide consumers with valuable products/services.
Step 3: Business Plan Market Analysis
Following your company description is your market analysis. This is the section that will show readers and potential investors that you and your team have done sufficient research into your industry and market, gathering all of the information you’ll need for your company to be successful.
What to Include in Your Market Analysis
Industry Details – What is the current size of your industry? Historically, how has it grown? What are some of its other trending characteristics?
Target Market Information – This section needs to be fairly specific. Don’t try to cast a wide net—decide on a focus group of a manageable size. It’s a common mistake to try to hit too many different markets, which winds up causing companies to spread their resources too thin. Research your target market and report the following information:
- Distinguishing Characteristics: Take a look at the demographics and location of your potential customers, as well as their critical needs and whether or not those needs are being met. Do they follow any purchasing trends, such as seasonal or cyclical ones, that may affect your business?
- Target Market Size: What is the size of your primary target market? What information have you gathered about their annual spending habits within your industry? How can your target market be expected to grow?
- Market Share Gain: How much of the market share do you anticipate obtaining in a specific geographic area? Measure this in both share percentage and number of customers, and explain the logic that brought you to your answer.
- Financial Targets: Outline your pricing structure, gross margin levels, and, if applicable, any discounts you may offer.
If you include any information regarding market tests or research studies you’ve done, only focus on the test results. Keep any additional details pertaining to these tests and studies in your plan’s appendix.
Competitive Analysis – This is the section where you identify your competition in terms of products, services, and market segment. The following characteristics should be included:
- Market share
- Strengths and weaknesses
- How strongly your competition values your target market
- Any barriers that may hinder your entrance to the market
- Your window of opportunity to get into the market
- Any secondary or indirect competition that may affect your success
- Any existing market barriers, such as changes in technology, high investment costs, lack of quality workforce
Regulatory Restrictions – If there are any customer or governmental regulatory requirements that will affect your business, list them here, as well as how you plan to comply with the regulations. Take this opportunity to also note any impact that compliance process will have on your business in terms of operations or cost.
Continue to Step 4: Business Plan Organization and Management >
Have questions about creating your business plan company description, market analysis, or the entire plan altogether and need answers from seasoned professionals? Call the team at JRH & Associates at (516) 794-5752! We’re standing by to help you with all of your tax-related needs!