Who are you selling to, and why should they buy from you? This is one of the crucial questions your investors will ask, and you’ll need to come prepared with a strong and fully-thought-out answer.
This brings us to the next section of your business plan: understanding your market and your place in it.
The Perfect Business Plan: Definition of the Market
There are several steps you can take to shape your thought process as you paint a picture of your market for investors. These processes become parts of the content in your business plan.
- Describe your business industry and outlook. In this section, you need to provide an honest assessment of the health of your industry as a whole and where it is expected to be over the next several years. Rather than be solely focused on your own company, think big picture.
- Define the critical perceived or existing market. What areas are the most underserved or will be the most in need in the immediate future and over the next several years? How are you preparing your business to address those needs?
- Identify your target market. Who makes up your ideal target demographic? Is there any research regarding your potential client pool expanding or needing additional services in the coming months/years?
- Provide a general profile of your targeted clients. What characteristics best define the clients that you anticipate doing the bulk of your business with? By knowing your clients and their needs, you can demonstrate your ability to better serve them.
- Describe what share of the market you currently have and/or anticipate having. This portion of the business plan allows you to demonstrate where you currently are, where you are headed and how you plan on maximizing all of the opportunities along the way and upon arrival.
After reviewing this section, potential investors should have a clear understanding of both the industry you operate in and the customer needs you are fulfilling, as well who those customers are, the scope of your business market and your share of it.