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Getting Started on your Business Plan – Part Three

Towards the end of last year we published an article on the importance of a Business Plan for SME start-ups, followed by some advice on how to get started when it comes to writing an effective business plan.  We came up with a great template to be used in a Business Plan and promised to break this down into sections to give readers comprehensive advice on each individual part of the overall plan.   Basically, a business plan template can be divided into four sections:

1.      The Project Idea

2.      The People

3.      The Market

4.      The Money

We started by covering how to get the ball rolling when it comes to a business plan summary which you can use to get people hooked onto your idea.  Then last week we took a look at the second section, the People you’ll need to take into account.  Today we’re going to cover the third section, the Market.

Market Research

Market research is essential as you will need all the correct information in order to carry out a detailed overall analysis before starting your business.  You’ll need to thoroughly investigate the following issues:

·         Is there a market for your products or services?

·         The levels of demand for your products or services

·         Who are your target customers in terms of age, gender, location, profession, income

·         Where your target customers currently buy the type of products and services you provide.

When researching your target market you’ll need to find out some fairly detailed information – mainly the local customers who will be interested in your business, rather than general information about customers world-wide who are interested in your type of products or services. 

Some businesses will have more than one type of target customer so you’ll need to spend some time on individually researching each type of group.  For example, you may sell directly to customers in your local area but you may also supply other small businesses in your area. 

You’ll also need to take the following points into consideration:

·         How will you reach out to your target customers and let them know all about your products or services?

·         How much is your product or service worth to your target customers and how often will they buy?

·         Who are your competitors? 

A competitor can be defined as any business that offers a product or service that is similar to yours.  Some businesses have many competitors so it’s best if you focus on those which customers are most likely to buy from instead of you.  This will probably be those businesses nearest to you in location, those with the most similar prices or those with the most similar products or services.  You’ll need to think carefully about your business and be honest with yourself about how you compare with your competitors.

Gather all your thoughts and put all of this into a SWOT analysis.  SWOT stand for Strengths, Weaknesses, Opportunities and Threats. 

All the data you collect should be entered onto a spreadsheet which will be the basis of the sales and marketing forecast in your Business Plan.

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