After you finish your Company Description, in the startup business plan, it’s time to move into what is called Market Analysis where you show the industry and market knowledge, what you found in your researches, and the conclusions you came up with.
First, you must give a clear description of your company such as its historic growth rate, its current size, and some of its characteristics like its cycle and growth rate. In addition, provide a list of the most important customer groups of your company.
Second, try to limit or restrict your target market so that you would be able to control its size since many companies do the same mistake that is trying to reach so many target markets.
Third, figure out what are the needs of your potential customers and see whether or not your company is meeting those needs. Identify your customers’ demography and their location.
Fourth, include the annual purchases your market makes in your company, and the estimation of the market growth.
Fifth, estimate the number of customers and market share percentage that your company is going to have in a certain area, and justify your calculations in a clear way.
Sixth, show your gross margin levels, your prices and the discounts you are willing to apply. If you include any data concerning the researches you have done, show the results of your studies and focus on them since anything else should be included in the appendix.
Seventh, provide your competitive analysis. Evaluate your market share, the importance of your target market with respect to your competitors, the obstacles that might stand in your way and thwart you from entering the market, your weaknesses, your strengths, the opportunity which will help you enter the market, the hidden or secondary competitors that will affect negatively your success, and other barriers like unqualified employees, change in technology etc… Last, mention any regulatory requirement that affects your business whether it is related to the government or customers and how you will act in accordance with it.
A good market analysis is of major importance to your company since it will help you stay competitive in the market. When you understand well your market, you will be able to notice so many factors that will affect your company or clients even if you are a small firm or a large corporation.