Hey MR (or MS), the answer is Market Research or Market Surveys. Every professional business plan has to have evidence of some serious market research. Asking your friends and family is just not good enough. One good reason is that they don’t want you to feel bad, so they will tend to tell you what they think you want to hear. They want you to feel good about yourself, about your idea.
If you were going to buy a new car, you would research it. You’d check reviews, other makes and models, prices etc. Wouldn’t you?
So, open your browser and get going on the research for your business.
If you want your business to get funded, you need a good business plan with solid market research. Your business plan has to answer certain questions that every professional that reads it wants to know:
- How large is the total market for your product?
- What share of the market can you expect?
- How does your product compare to the competition?
- How does your pricing compare to your competition?
Answering the two competition questions helps you answer another very important question in your business plan: What is your competitive edge?
It can be a real challenge to do the right amount of market research. Don’t do enough and your plan is built on shaky foundations. But don’t get trapped into “analysis paralysis”, where you keep doing research … because it’s interesting … but you don’t finish the (difficult) plan and get your business going.
Good market research can help you define and refine your value proposition. Not dis-similar to your USP (Unique Selling Proposition) your value proposition answers the question: What is the compelling reason for customers to buy your product? This question can also be rephrased as: Why should a customer choose your product/service over every other option available to them?
Get the right answer to this question and your business is on the path to success.
Market research is part of the work that needs to be done to prepare your business plan. Weak market research is one of the more common business plan mistakes.
The Dirty Dozen Business Plan Mistakes. A series by Barry Sharp, Expert Business Plan Writer & Business Consultant.