Industry Analysis

In this section, you should answer the following questions:

Target Market

No single business can be everything to everybody. Most businesses focus on target markets — subsets of the overall market. You will need to define your target markets, determining such factors as population, the overall level of business activity, and your geographic region. For this section you need to write a description of your target market or markets. This should be a brief summary of the markets either by summarizing demographics of consumers or attributes of business customers (business-to-business marketing).

Customer Profile

Who is expected to use your product or service? What will they use it for? Why do they buy the product? If you are already selling your products or services, who is currently buying them and why?  One way to write the customer profile is to organize it by demographics or lifestyle descriptions.

Major Competitors and Participants

This section should also include a summary of the competitors and participants in the industry. Unless you have found a brand new market niche, chances are your market has already been penetrated by competitors. List all of your known competitors. Here are some questions to answers:

Discuss the current and expected competitive market. Is the market competitive? If not, why not? Be sure to rate your competitors’ market share, their financial strength and how their products compare with yours. What are the barriers of entry to the market that you wish to serve (i.e., how easy is it to get started in this business?)

Your competitive evaluation will help you demonstrate your role in the market and identify areas of the market that are not being sufficiently addressed.

Market Segmentation

What are the demographics of your target customer? If you are selling to individual consumers, what is their age, sex, income level, education, race, occupation, lifestyle, and number of children at home? Are they married, single, or retired? Where does the target customer live? Where will the business be located and how does that affect your target segment?

If you are selling to businesses, what kinds of businesses are purchasing your products (SIC codes, etc.), what is their sales volume, and how many employees do they have?

Projected Market Growth and Market Share Objectives

Briefly comment on the social, geographic, and demographic trends that support your conclusions for the market forecasts. Support your market forecasts with reports on your industry and other available public or private economic data.

If you are projecting your sales forecasts using the market size and market share method, feel free to reference your projections with the data from the spreadsheet. You can insert this spreadsheet data in the narrative or in the appendix.

Product and Service Offering

Precisely describe the product or service. There shouldn’t be any doubts left in the reader’s mind as to what you produce or the service you offer. The product description should be brief and succinct – many marketing consultants insist that you be able to describe a product and its benefits in 20 seconds or less. If you are having problems briefly describing your product and its benefits, you may need to work on this until you capture its essence. If you have more than one product, describe each individually.

 

Product and Service Uniqueness

Most new businesses are established to sell products and/or services that are already available. Describe the unique features of your product or service. What makes your product different and why will customers purchase your product or service? Your product may be a commodity, but it can be differentiated by the way it is delivered, priced or packaged. In order to succeed, you must provide your prospective customers a clear reason to buy your product or service over that of your competitors. Being different from your competitor is important – but this difference must provide a tangible benefit to the buyer.

If you have a proprietary advantage clearly state it. Is there a quantifiable benefit that can be associated with your product? How long does it take for the product to pay for itself?

Product and Service Descriptions

Briefly describe the product features of benefits of each of your products or services. Answer the following questions:

Product Name – Here you can briefly describe your product information. Use copy and paste if you have additional products.

Product Name – Here you can briefly describe your product information. Use copy and paste if you have additional products.

Product Name – Here you can briefly describe your product information. Use copy and paste if you have additional products.

Product Name – Here you can briefly describe your product information. Use copy and paste if you have additional products.

Competitive Comparisons

Briefly describe the primary competitive products for each of your product/service offerings. Include a competitive grid – like the one below:

 Your CompanyCompetitor 1Competitor 2
Product Quality   
Price   
Image   
Target user   
Distribution   
Warranty   
Promotion   

Product Comparison Table

Research and Development

You should detail the steps involved in your R&D process, including new product or service design and existing product extension and improvement. Discuss how much you spend on R&D and any significant changes in that strategy. For example, if you plan to increase R&D investment for the upcoming operating cycle then you should note and explain that. Discuss your R&D priorities and how those priorities are in line with your company’s mission or vision statement. If you have significant product or service testing plans, explain those. Since many readers of a business plan have a great deal of interest in your future plans, product or service testing would be of great interest. Explain what your current plans are for new product development and list key R&D milestones. Some of the things a reader might be interested in include:

Research and development work conducted to date including prototypes (pictures help), lab results, product testing results, etc.

 

Patents and Trademarks

Are there any patents or trademarks issued for the company’s products? Does the company have full assignment of the all the patent rights? Have you entered into any licensing agreements with other companies to use it? If you are licensing technology or patents from someone else, be sure to detail the agreement.

 Industry Analysis

In this section, you should answer the following questions:

Target Market

No single business can be everything to everybody. Most businesses focus on target markets — subsets of the overall market. You will need to define your target markets, determining such factors as population, the overall level of business activity, and your geographic region. For this section you need to write a description of your target market or markets. This should be a brief summary of the markets either by summarizing demographics of consumers or attributes of business customers (business-to-business marketing).

Customer Profile

Who is expected to use your product or service? What will they use it for? Why do they buy the product? If you are already selling your products or services, who is currently buying them and why?  One way to write the customer profile is to organize it by demographics or lifestyle descriptions.

Major Competitors and Participants

This section should also include a summary of the competitors and participants in the industry. Unless you have found a brand new market niche, chances are your market has already been penetrated by competitors. List all of your known competitors. Here are some questions to answers:

Discuss the current and expected competitive market. Is the market competitive? If not, why not? Be sure to rate your competitors’ market share, their financial strength and how their products compare with yours. What are the barriers of entry to the market that you wish to serve (i.e., how easy is it to get started in this business?)

Your competitive evaluation will help you demonstrate your role in the market and identify areas of the market that are not being sufficiently addressed.

Market Segmentation

What are the demographics of your target customer? If you are selling to individual consumers, what is their age, sex, income level, education, race, occupation, lifestyle, and number of children at home? Are they married, single, or retired? Where does the target customer live? Where will the business be located and how does that affect your target segment?

If you are selling to businesses, what kinds of businesses are purchasing your products (SIC codes, etc.), what is their sales volume, and how many employees do they have?

Projected Market Growth and Market Share Objectives

Briefly comment on the social, geographic, and demographic trends that support your conclusions for the market forecasts. Support your market forecasts with reports on your industry and other available public or private economic data.

If you are projecting your sales forecasts using the market size and market share method, feel free to reference your projections with the data from the spreadsheet. You can insert this spreadsheet data in the narrative or in the appendix.

Product and Service Offering

Precisely describe the product or service. There shouldn’t be any doubts left in the reader’s mind as to what you produce or the service you offer. The product description should be brief and succinct – many marketing consultants insist that you be able to describe a product and its benefits in 20 seconds or less. If you are having problems briefly describing your product and its benefits, you may need to work on this until you capture its essence. If you have more than one product, describe each individually.

 

Product and Service Uniqueness

Most new businesses are established to sell products and/or services that are already available. Describe the unique features of your product or service. What makes your product different and why will customers purchase your product or service? Your product may be a commodity, but it can be differentiated by the way it is delivered, priced or packaged. In order to succeed, you must provide your prospective customers a clear reason to buy your product or service over that of your competitors. Being different from your competitor is important – but this difference must provide a tangible benefit to the buyer.

If you have a proprietary advantage clearly state it. Is there a quantifiable benefit that can be associated with your product? How long does it take for the product to pay for itself?

Product and Service Descriptions

Briefly describe the product features of benefits of each of your products or services. Answer the following questions:

Product Name – Here you can briefly describe your product information. Use copy and paste if you have additional products.

Product Name – Here you can briefly describe your product information. Use copy and paste if you have additional products.

Product Name – Here you can briefly describe your product information. Use copy and paste if you have additional products.

Product Name – Here you can briefly describe your product information. Use copy and paste if you have additional products.

Competitive Comparisons

Briefly describe the primary competitive products for each of your product/service offerings. Include a competitive grid – like the one below:

 Your CompanyCompetitor 1Competitor 2
Product Quality   
Price   
Image   
Target user   
Distribution   
Warranty   
Promotion   

Product Comparison Table

Research and Development

You should detail the steps involved in your R&D process, including new product or service design and existing product extension and improvement. Discuss how much you spend on R&D and any significant changes in that strategy. For example, if you plan to increase R&D investment for the upcoming operating cycle then you should note and explain that. Discuss your R&D priorities and how those priorities are in line with your company’s mission or vision statement. If you have significant product or service testing plans, explain those. Since many readers of a business plan have a great deal of interest in your future plans, product or service testing would be of great interest. Explain what your current plans are for new product development and list key R&D milestones. Some of the things a reader might be interested in include:

Research and development work conducted to date including prototypes (pictures help), lab results, product testing results, etc.

Patents and Trademarks

Are there any patents or trademarks issued for the company’s products? Does the company have full assignment of the all the patent rights? Have you entered into any licensing agreements with other companies to use it? If you are licensing technology or patents from someone else, be sure to detail the agreement.