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When you’re building a business plan, market research needs to happen pretty early in the process. It’s where you learn about your audience’s wants and needs and the financial trends in your industry, and where you combine the data, and uncover trends that tell you what customers want and how to provide it most effectively.

The results of that research and analysis will shape aspects of the rest of your business plan. Assessments of your market and competition inform critical decisions in areas such as product design or service offerings, price, marketing methods, and business location.

That means accurate and comprehensive market research matters. To be comprehensive, your information and analysis should answer every possible question about the market you plan to enter and the consumers you believe will buy your product or service, including (but not limited to):

• Demand: Do consumers want what you’re offering?

• Economic indicators: Do they have the money to buy your product/service?

• Pricing: How much will they pay for your product/service?

• Location: Where do they live, and where are they likely to make their purchases?

• Saturation: How many other options do they currently have for that product/service?

First Steps: Budget

You can spend a lot answering these questions. Many large businesses hire firms to do the research and analysis, employing large-scale surveys, focus groups and statistical models, among other methods. However, for entrepreneurs just starting out, marketing budgets are typically too slim to cover that kind of research.

So, the work needs to stay in-house and fit a small marketing budget. Affordable, effective market research is possible. It may not be as specific to your market as the big-budget stuff, but it can get you the information you need to work out a solid understanding of your market.

First Steps: Market-Research Objectives

Before you start your research and analysis, determine your objectives. Decide what you want to learn from the process. It will guide the data you search for and how you use it, so be specific. Write down actual goals – what would give you the most accurate, comprehensive and useful picture of your market? This could include areas such as demographics, competitor offerings and customer pain points.

First Steps: Research Terminology

In market research, you’re basically dealing with two types of research and two types of data:

• Primary research: This is research you perform yourself in order to get very specific insights into your very specific business. It includes methods such as surveys, interviews and direct observations (by visiting competitor locations, for instance). It can help you gather qualitative data. This is data that goes beyond statistics and market trends. It can tell you what your consumers want, what they don’t want and how they feel about your offerings.

• Secondary research: This is research other people have performed and analyzed. To conduct secondary research, you can visit government websites such as the U.S. Census Bureau and the Bureau of Labor Statistics, as well as private data collectors such as Google and market-research companies. It can help you gather quantitative data. This is generally statistical data and can reveal insights on consumer demographics, spending patterns, market trends and earnings projections.

Where To Start Your Market Research

There’s a ton of existing research out there, and a lot of it is totally free. The Small Business Administration website has a list of free government sources for various types of quantitative data, such as industry statistics, consumer demographics, consumer demand and spending, and sales indicators. Much of it comes from the U.S. Census Bureau and the Bureau of Labor Statistics. A simple search will turn up enough places to start gathering secondary research to build a picture of your market.

With a good understanding of your market from secondary sources, you’re in a good position to know which types of primary research, if any, would be worth an investment of your time and energy. Maybe a well-designed survey completed by everyone you know could help fill in some holes.

You can also conduct primary research by visiting and speaking with your would-be competition and their customers; through crowdsourcing forums such as Quora, where you can glean raw data from comments and responses and post questions related to your product, service and market; on social-media websites such as Facebook, where you can parse conversations in relevant interest groups; and by reading product and service reviews on sites such as Amazon or Yelp.

Analyzing Your Market Research

Armed with all your data, you’ll draw conclusions that will help guide many of your business decisions.

But first, make sure all of your data will benefit those decisions. Don’t start analyzing until you weed out extraneous information that will waste your time and hinder focused insights. If it doesn’t relate directly to your business and your market, set it aside.

Then organize the relevant data into tables, graphs, lists and pie charts, and see what trends emerge. What do those trends mean for your business? Your product? Your location? Your planned promotions?

Be open to whatever the data tells you. Even if your research findings are unexpected, embrace them, and make any necessary adjustments. Listening to good market research can save you a lot of headaches down the road: The better you know your consumers, the better your chances of successfully selling to them.

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How to Do Market Research for a Business Plan Successfully

The entrepreneurial-minded folks may long have wondered how to do market research for a business plan. 

After all, a business plan lays out the foundation, purpose and expectations of a new business venture. Given that the risks of starting a new business are manifold , entrepreneurs must conduct market research.

20% of American businesses fail after only their first year of operation, a dismal reality that climbs to 30% after two years.

Newfound entrepreneurs and serial entrepreneurs alike should therefore carefully commit to and execute a business plan.

While market research applies to a wide breadth of applications that cover various business cycles and processes, including opening and operating a new business, it too can be used for producing a 

This article expounds upon how to do market research for a business plan — and succeed in your venture.

Defining A Business Plan and Its Needs

Before you set out to formulate a business plan, it is vital to fully understand all that it entails. Usually created for startups, it is necessary for all businesses to implement. 

A business plan is a written document that summarizes the main aspects of starting up and managing a business, making it the foundation for your business .

A business plan specifically details a business’s objectives, along with its financial, marketing and operational needs and a roadmap thereof. 

It is created to guide a business through each stage in its establishment and management.  As such, it allows business owners to lay out their needs and goals and track them as the business grows.

A business plan must be updated at regular intervals , as priorities and goals are subject to change. Additionally, when an established business moves in a different direction, it needs a new or completely updated business plan.  

The Importance of a Business Plan

A business plan is an important document and not merely for the purpose of monitoring your business as it develops. This is because this document is also needed to obtain investment , especially in the early stages of the business, in which it does not have an evidential track record.

Thus, a business plan shows investors whether your business is on the right course and is worth investing their funds into. Lenders will require proof of a business plan when they deliberate the approval of a loan. 

Here are several other reasons as to why creating and updating a business plan is important:

• Making important decisions. It allows you to answer difficult questions at the onset, before they emerge. Understanding these decisions helps you understand how they fit into your overall strategy.
• Addressing key issues to avoid future problems . These include pricing, competition evaluation, market demand, capital and team members.
• Proving the viability of your business . Planning your vision into a full-fledged business bridges the gap between an idea and reality. Market research is essential for this point, as it helps you find key insights on various aspects of your industry, including your competitors and customers. 
• Communicating objectives with team members and all those involved . This is important for larger teams, particularly for assistance when you are too busy to relay information or guidance to your team members. This may also help investors or partners who cannot reach you, as it lays out objectives and criteria.
• Standardizing and carrying out key objectives . Placing your objectives, criteria and other needs gives them more weight and attention. If they aren’t in your business plan, thereby, in writing, they can easily fall by the wayside. A business plan helps avoid this, standardizing key objectives and benchmarks.
• Guiding consultants, freelancers and other workers . When employing freelancers and contractors, you can turn to specific sections of a business plan to guide these workers, to ensure they understand your vision, goal and other key business aspects.
• Obtaining financial support. Whether it is via borrowing from a bank, turning to venture capitalists or putting your business up for an acquisition, a business plan makes your business and its viability clear for these key financial players. 
• Acclimating to market changes . Updating your business plan can help you during periods of critical change in your market. These changes include: changes in customer needs, new regulations, trends or updates in your industry.

Defining Market Research

Market Research is a wide-encompassing practice that involves gathering information to bolster knowledge about a business’s industry, niche and target market . 

It involves the systematic process of amassing, analyzing and interpreting data and information around the state of a business’s industry and its key actors . The key actors entail a business’s target market, competitors and the movers and shakers within its industry.

As such, it involves gathering research around the niche, trends and industry as a whole. 

This involves gathering secondary research , research that has already been conducted and made available, along with primary research , the kind that requires you to conduct yourself. These main types of research gathering involve various means, techniques and tools that researchers can use.

Market research largely deals with evaluating the viability of a new product or service, although this aspect is primarily referred to as customer development . By conducting market research, you can therefore gather information on virtually all areas of your business. 

Why a Business Plan Needs Market Research

A potent document, one that properly lays out the 7 components of a business plan , from the executive summary, to the market analysis, to the strategy, financial plan and all other in-betweens, most use market research to develop it. 

Market research provides the key data, information and nuances your business plan needs. Although a new business or business idea is born on intuition, a business plan must be backed up with data to prove its viability and positioning in its industry. 

As such, market research must be performed in the early stages of the business plan, as it is the phase in which you learn all about your niche, its trends and the demands of your target market (including the makeup of your target market via market segmentation ).

Only after analyzing all of your market research results, will you be able to populate the business plan within key areas such as market analysis, financial projections, strategy and implementation, marketing endeavors, pricing and location . 

A business plan must be comprehensive, another way in which market research is of utmost importance, in that there are various methods and tools you can use to conduct it. By consolidating all of the different market research techniques , you are establishing an exhaustive business plan, the kind that leaves no key consideration out.

The following presents the key data and information of a business plan that market research can extract:

• Demand : Does your product/service have enough market potential to justify a new business?
• Pricing : How will you determine the pricing of your offerings? 
• Target Market : Who makes up your target market? Do they have enough spending power to buy your product or service?
• Location : Does your business require opening a physical store or can it effectively reach its target market via ecommerce? Perhaps it needs both?
• Historic data on your product/ service : How have the products and services in your niche performed over time? How do they perform currently? 
• Marketing and Market Entry : How will you form an explanation on how you’ll enter the market? How will you promote your products/services to solidify your entry?
• Labor Requirements : Do you have enough manpower to form a business? How many employees and contractors will your business require?
• Financial Plan : Do you have the financial means to cover all operations?

How to Conduct Market Research for a Business Plan

Since a business plan ought to include concrete information to pave the way for business success, it requires thorough market research. Given that market research encompasses so many modes and forms, it can be overwhelming and even intimidating to begin to conduct it for your business plan.

The following provides a step-by-step guide on how to do market research for a business plan, so you can craft your plan in an informed manner, equipped with critical market research.

• First, search the secondary sources available; while some are free, there will be many that aren’t.
• Then, narrow it down to a specific niche, with suspected market segments.
• Focus your research via secondary sources on your market. Look at trade publications, new sites dedicated to your market, industry reports, local reports, statistics websites, blogs on the startups in your niche, including their stories of success and failure and other secondary resources.
• Conduct further secondary research on your priorities.
• Then, switch to primary research methods to zero in on your most critical research subjects.
• You can achieve this by conducting secondary research on your target market.
• Use an online survey, a focus group or a survey panel .
• Segment your target market further and start building personas from the shared characteristics they exhibit.
• Be sure to find similar offerings available to identify your competitors.
• Survey your target market on their needs and feelings towards similar products/services, along with their aversions and desires for updates.
• This will help you understand how to set up your prices as well.
• Research the costs of marketing and publicizing the launch of your business.
• Compare all costs and establish a preliminary business budget.
• Jot down their strengths and weaknesses.
• Compare your offering to theirs, does it fill any gaps or voids? Is it better price-wise?
• Break this down from high to low levels of research. Ex: From the general industry to the exact niche, from a large target market, to specific segments, to specific personas.
• Adjust your budget, goals and plans.
• The executive summary, company description, products and services, market analysis, strategy and implementation, organization and management, financial plan and projections.
• Assure that everything makes sense. If there are gaps in the information you have outlined, consider conducting more research.
• Highlight areas of opportunity, along with areas of risk. 
• Edit your business plan as needed.

Empowering Your Market Research-Powered Business Plan

Market research is a wide-reaching practice that blends consumer behavior and economic trends to help you validate and improve a business idea. It can also help you change the course or style of an already established business.

Thus, it is not solely for startups. Market research can be difficult to conduct and manage , as there are so many business aspects you’ll need to consider to lower your risk of failure. Concurrently, there is so many kinds of market research you can stand to conduct.

Even with the steps listed above, navigating through the jungle of market research can be a laborious and difficult task. While you can’t control secondary resources, you can wield control of your primary research endeavors via an online survey platform . 

This kind of market research tool allows you to take the reigns in every aspect: from asking the exact questions you seek answers to , to targeting a specific market segment , to deploying your surveys across the most-frequented websites and apps. 

A potent survey platform will complete all of these crucial tasks , making primary research an easy task. The trick is to find an online survey platform that can handle all of these tasks, along with making it easy to analyze the data.

Do you want to distribute your survey? Pollfish offers you access to millions of targeted consumers to get survey responses from $0.95 per complete. Launch your survey today.

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How to Conduct Market Research for a Business Plan

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Any successful business starts with a thorough, written business plan. For most small business owners, the prospect of gathering and compiling all the data required for a business plan can often seem intimidating. Fortunately, several helpful research tools can make conducting market research faster and easier, especially when conducting target customer interviews.

What Does a Business Plan Include?

When building a business plan, you may include different sections or topics depending on how you intend to use the final product. For instance, business plans for internal use might not need to be quite as detailed or structured as plans that will be presented externally in order to secure financing from investors. Regardless of your purpose, most business plans include the following core sections:

• Industry Background – Include analysis of special business considerations that apply to your particular industries, such as trends, growth rates, or recent litigation.
• Value Proposition – Your value proposition (or Unique Selling Proposition) outlines how your business plans to bring value to its target customers in a way that isn’t currently being fulfilled in the market.
• Product Analysis – Describe in detail the product or service you offer, including features that are better than or differentiate you from current market offerings.
• Market Analysis – Examine your company’s target market, including customer demographics, estimated market capture, personas, and customer needs.
• Competitive Analysis – Here, you’ll compare the intended product or service to other offerings in the market and outline your company’s competitive advantages.
• Financial Analysis – Typically, your financial analysis will include estimated sales for the first 1-3 years of operation, as well as more detailed financial projections depending on who will be reading the plan.

Conducting a Market Analysis

Specific industries have different potential customers. It’s easier to reach your potential customers when you have a clear view of who they are. A market analysis helps clarify your ideal customer personas by researching both qualitative and quantitative aspects of your target market.

To better understand your potential customers, start by researching the demographics and segmentation of individuals who typically buy products and services in your industry. Your market analysis should also include:

• Research on the total size of the market
• How much additional market share is available
• Any currently unmet needs that could be sources of competitive advantage
• Features and qualities potential customers find valuable  

Using Market Research to Support Your Business Plan

Market research helps assess a business idea’s strengths and weaknesses. his research will serve as the basis for strategic marketing decisions, price positioning, and financial projections listed in the Financial Analysis section of your business plan. You can also use it to help your management team think through important decisions, ultimately leading to choices that will resonate with your target audience and get customers to buy your product or service.

Secondary Research

Conducting market research begins with fact-finding through the internet and other publicly available resources. This secondary research, or research originally conducted and compiled by others, gathers statistics on market size, average market pricing, competitor promotional effectiveness, manufacturing costs, and more.

Secondary research is necessary because it is often expensive and time-consuming for individual business owners to conduct this research firsthand. There are many reliable professional research firms that gather comprehensive industry statistics and make them available at a much more granular level than individuals could gather on their own. Some governmental organizations, such as the U.S. Bureau of Labor Statistics will even provide this information at no charge. Fortunately for business owners, a free resource is still perfectly valid as long as it’s reputable.

Primary Research

Beyond the initial secondary research, you should also conduct thorough primary research to vet your business idea. Primary research is conducted by talking to members of the target audience firsthand through surveys, interviews, and focus groups . These tools can provide valuable insight into how prospects judge your product or service and how they compare it to alternative options.

Primary research efforts will typically generate qualitative data in the form of audio and video recordings. These interviews are not always brief, and therefore can be difficult to process efficiently unless first converted to text. You can quickly and easily incorporate the content of these interviews into your plan once they’ve been transcribed.

With a speech-to-text service like Rev, you can get 99% accurate transcripts of your market research interviews in a matter of hours. Dramatically streamlining your business planning process with Rev gives you faster access to valuable customer feedback and potential insights, letting you skip the busy-work and get down to business.

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How to Write a Market Analysis for a Business Plan

Dan Marticio is a freelance writer. He’s written on a broad range of topics from stocks and net worth to productivity hacks. His work has appeared on Fundera and LendingTree.

Robert Beaupre leads the SMB team at NerdWallet. He has covered financial topics as an editor for more than a decade. Before joining NerdWallet, he served as senior editorial manager of QuinStreet's insurance sites and managing editor of Insure.com. In addition, he served as an online media manager for the University of Nevada, Reno.

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

A lot of preparation goes into starting a business before you can open your doors to the public or launch your online store. One of your first steps should be to write a business plan . A business plan will serve as your roadmap when building your business.

Within your business plan, there’s an important section you should pay careful attention to: your market analysis. Your market analysis helps you understand your target market and how you can thrive within it.

Simply put, your market analysis shows that you’ve done your research. It also contributes to your marketing strategy by defining your target customer and researching their buying habits. Overall, a market analysis will yield invaluable data if you have limited knowledge about your market, the market has fierce competition, and if you require a business loan. In this guide, we'll explore how to conduct your own market analysis.

How to conduct a market analysis: A step-by-step guide

In your market analysis, you can expect to cover the following:

Industry outlook

Target market

Market value

Competition

Barriers to entry

Let’s dive into an in-depth look into each section:

Step 1: Define your objective

Before you begin your market analysis, it’s important to define your objective for writing a market analysis. Are you writing it for internal purposes or for external purposes?

If you were doing a market analysis for internal purposes, you might be brainstorming new products to launch or adjusting your marketing tactics. An example of an external purpose might be that you need a market analysis to get approved for a business loan .

The comprehensiveness of your market analysis will depend on your objective. If you’re preparing for a new product launch, you might focus more heavily on researching the competition. A market analysis for a loan approval would require heavy data and research into market size and growth, share potential, and pricing.

Step 2: Provide an industry outlook

An industry outlook is a general direction of where your industry is heading. Lenders want to know whether you’re targeting a growing industry or declining industry. For example, if you’re looking to sell VCRs in 2020, it’s unlikely that your business will succeed.

Starting your market analysis with an industry outlook offers a preliminary view of the market and what to expect in your market analysis. When writing this section, you'll want to include:

Market size

Are you chasing big markets or are you targeting very niche markets? If you’re targeting a niche market, are there enough customers to support your business and buy your product?

Product life cycle

If you develop a product, what will its life cycle look like? Lenders want an overview of how your product will come into fruition after it’s developed and launched. In this section, you can discuss your product’s:

Research and development

Projected growth

How do you see your company performing over time? Calculating your year-over-year growth will help you and lenders see how your business has grown thus far. Calculating your projected growth shows how your business will fare in future projected market conditions.

Step 3: Determine your target market

This section of your market analysis is dedicated to your potential customer. Who is your ideal target customer? How can you cater your product to serve them specifically?

Don’t make the mistake of wanting to sell your product to everybody. Your target customer should be specific. For example, if you’re selling mittens, you wouldn’t want to market to warmer climates like Hawaii. You should target customers who live in colder regions. The more nuanced your target market is, the more information you’ll have to inform your business and marketing strategy.

With that in mind, your target market section should include the following points:

Demographics

This is where you leave nothing to mystery about your ideal customer. You want to know every aspect of your customer so you can best serve them. Dedicate time to researching the following demographics:

Income level

Create a customer persona

Creating a customer persona can help you better understand your customer. It can be easier to market to a person than data on paper. You can give this persona a name, background, and job. Mold this persona into your target customer.

What are your customer’s pain points? How do these pain points influence how they buy products? What matters most to them? Why do they choose one brand over another?

Research and supporting material

Information without data are just claims. To add credibility to your market analysis, you need to include data. Some methods for collecting data include:

Target group surveys

Focus groups

Reading reviews

Feedback surveys

You can also consult resources online. For example, the U.S. Census Bureau can help you find demographics in calculating your market share. The U.S. Department of Commerce and the U.S. Small Business Administration also offer general data that can help you research your target industry.

Step 4: Calculate market value

You can use either top-down analysis or bottom-up analysis to calculate an estimate of your market value.

A top-down analysis tends to be the easier option of the two. It requires for you to calculate the entire market and then estimate how much of a share you expect your business to get. For example, let’s assume your target market consists of 100,000 people. If you’re optimistic and manage to get 1% of that market, you can expect to make 1,000 sales.

A bottom-up analysis is more data-driven and requires more research. You calculate the individual factors of your business and then estimate how high you can scale them to arrive at a projected market share. Some factors to consider when doing a bottom-up analysis include:

Where products are sold

Who your competition is

The price per unit

How many consumers you expect to reach

The average amount a customer would buy over time

While a bottom-up analysis requires more data than a top-down analysis, you can usually arrive at a more accurate calculation.

Step 5: Get to know your competition

Before you start a business, you need to research the level of competition within your market. Are there certain companies getting the lion’s share of the market? How can you position yourself to stand out from the competition?

There are two types of competitors that you should be aware of: direct competitors and indirect competitors.

Direct competitors are other businesses who sell the same product as you. If you and the company across town both sell apples, you are direct competitors.

An indirect competitor sells a different but similar product to yours. If that company across town sells oranges instead, they are an indirect competitor. Apples and oranges are different but they still target a similar market: people who eat fruits.

Also, here are some questions you want to answer when writing this section of your market analysis:

What are your competitor’s strengths?

What are your competitor’s weaknesses?

How can you cover your competitor’s weaknesses in your own business?

How can you solve the same problems better or differently than your competitors?

How can you leverage technology to better serve your customers?

How big of a threat are your competitors if you open your business?

Step 6: Identify your barriers

Writing a market analysis can help you identify some glaring barriers to starting your business. Researching these barriers will help you avoid any costly legal or business mistakes down the line. Some entry barriers to address in your marketing analysis include:

Technology: How rapid is technology advancing and can it render your product obsolete within the next five years?

Branding: You need to establish your brand identity to stand out in a saturated market.

Cost of entry: Startup costs, like renting a space and hiring employees, are expensive. Also, specialty equipment often comes with hefty price tags. (Consider researching equipment financing to help finance these purchases.)

Location: You need to secure a prime location if you’re opening a physical store.

Competition: A market with fierce competition can be a steep uphill battle (like attempting to go toe-to-toe with Apple or Amazon).

Step 7: Know the regulations

When starting a business, it’s your responsibility to research governmental and state business regulations within your market. Some regulations to keep in mind include (but aren’t limited to):

Employment and labor laws

Advertising

Environmental regulations

If you’re a newer entrepreneur and this is your first business, this part can be daunting so you might want to consult with a business attorney. A legal professional will help you identify the legal requirements specific to your business. You can also check online legal help sites like LegalZoom or Rocket Lawyer.

Tips when writing your market analysis

We wouldn’t be surprised if you feel overwhelmed by the sheer volume of information needed in a market analysis. Keep in mind, though, this research is key to launching a successful business. You don’t want to cut corners, but here are a few tips to help you out when writing your market analysis:

Use visual aids

Nobody likes 30 pages of nothing but text. Using visual aids can break up those text blocks, making your market analysis more visually appealing. When discussing statistics and metrics, charts and graphs will help you better communicate your data.

Include a summary

If you’ve ever read an article from an academic journal, you’ll notice that writers include an abstract that offers the reader a preview.

Use this same tactic when writing your market analysis. It will prime the reader of your market highlights before they dive into the hard data.

Get to the point

It’s better to keep your market analysis concise than to stuff it with fluff and repetition. You’ll want to present your data, analyze it, and then tie it back into how your business can thrive within your target market.

Revisit your market analysis regularly

Markets are always changing and it's important that your business changes with your target market. Revisiting your market analysis ensures that your business operations align with changing market conditions. The best businesses are the ones that can adapt.

Why should you write a market analysis?

Your market analysis helps you look at factors within your market to determine if it’s a good fit for your business model. A market analysis will help you:

1. Learn how to analyze the market need

Markets are always shifting and it’s a good idea to identify current and projected market conditions. These trends will help you understand the size of your market and whether there are paying customers waiting for you. Doing a market analysis helps you confirm that your target market is a lucrative market.

2. Learn about your customers

The best way to serve your customer is to understand them. A market analysis will examine your customer’s buying habits, pain points, and desires. This information will aid you in developing a business that addresses those points.

3. Get approved for a business loan

Starting a business, especially if it’s your first one, requires startup funding. A good first step is to apply for a business loan with your bank or other financial institution.

A thorough market analysis shows that you’re professional, prepared, and worth the investment from lenders. This preparation inspires confidence within the lender that you can build a business and repay the loan.

4. Beat the competition

Your research will offer valuable insight and certain advantages that the competition might not have. For example, thoroughly understanding your customer’s pain points and desires will help you develop a superior product or service than your competitors. If your business is already up and running, an updated market analysis can upgrade your marketing strategy or help you launch a new product.

Final thoughts

There is a saying that the first step to cutting down a tree is to sharpen an axe. In other words, preparation is the key to success. In business, preparation increases the chances that your business will succeed, even in a competitive market.

The market analysis section of your business plan separates the entrepreneurs who have done their homework from those who haven’t. Now that you’ve learned how to write a market analysis, it’s time for you to sharpen your axe and grow a successful business. And keep in mind, if you need help crafting your business plan, you can always turn to business plan software or a free template to help you stay organized.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

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How to Do Market Research for a Business Plan

Back to Business Plans

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on February 27, 2023 Updated on December 12, 2023

Writing a business plan involves considerable research, much of which is about your industry or market. You’ll need to examine your competitors, your potential customers, what sells, and what doesn’t, and more – all of which will go into the market analysis section of your business plan.

But where to begin? Luckily, this handy guide explains how to conduct market research that will result in sharp, informed strategies and put your business on the path to success.

• What to Research

Be ready to examine your entire industry or market, including customers, competitors, trends and more. 

The Overall Market

You’ll want to find out exactly what’s happening in your industry, such as its growth rate, market size, and latest trends. Where is the industry expected to be in 10 years?

You should be able to find sources online offering data for the U.S. and global markets. IBIS World and Statista are good sources that often provide free statistics, or you can pay for more in-depth information. To find trends in your industry, both good and bad, you can search for news stories or industry websites that discuss current trends and those that may be on the horizon. 

Then consider your company’s place in the market. Is your product going to fit a certain niche? Is there a sub-industry your company will fit within? How will you keep up with industry changes? What share of the market do you think your business can capture?

Target Market Research

It cannot be stressed enough how important it is to know your potential customers. If you don’t know who might be interested in buying your goods, how will you ever sell them? 

It’s best to know as much as possible about your target demographic, so you can craft a marketing strategy that will resonate with them and entice them to buy. If you’ve already made some sales, you can start to collect data about your customers and find common characteristics. 

First, dig into your market with some more online research. Do some Google and Bing searches about your target demographic, where they shop and live, what appeals to them and so on. 

Next, check out your competition to see who they’re marketing to. It may help to study their marketing through the eyes of a consumer. 

What need do they fill? Who would find their marketing appealing? Where do they advertise? If their ads appear on TikTok, they’re looking to attract a younger market. 

This market research should give you a general profile of your target market – but that’s not enough

To learn more about your target market, go straight to the source – potential customers. The best way to learn their needs and wants, why they’d buy your product and how they’ll use it, is to ask them via a phone or email survey. 

If you’ve yet to make any sales, it’s probably best to post your survey online then promote it on social media by offering a small reward, such as a gift certificate. Just make sure you ask the right questions to get the information that you’re looking for. 

You can also hold in-person focus groups and offer your goods at a discount for participants. 

Now it’s time to build detailed profiles of your target customers. You may have found that your product will appeal to more than one group of people. These are called customer segments , and all your segments together make up your target market. 

Create descriptions of each group with all the information you’re learned. These profiles should include:

• Pain points: the problems they have that you’re solving
• Benefits your product provides
• Their interests: what do they care about?
• Buying patterns: where do they shop?
• Age, location, income level, other factual information

Research the Competition

Research your competitors to find out more about what they offer, how they offer it, and to whom. You can get this info on the companies’ websites, social media, marketing, and any news and financial reporting.  

Their marketing should also help you to identify their value proposition. 

Read customer reviews to learn more about what they’re doing right, and more importantly, areas in which they fall short. You might even want to buy some of your competitors’ products.

Compare your competitors’ products to your own, examining the features and uses, as well as pricing, quality, and market placement. This should show you how your product stacks up and give you ideas about how to improve it, perhaps with new features or added options.  

Now you should be able to figure out where your business can gain an advantage. What does your company offer that they don’t? What can you do better than they do? 

It could be something your business already does or has, or something you need to implement to gain an edge. Either way, it’s critical that you identify at least one differentiator that will persuade customers to choose your business. 

Some potential competitive advantages could be:

• Customer service
• Technology 
• Convenience
• Rapid innovation
• Unique features
• High quality 
• Corporate social responsibility
• Empathetic marketing
• Eco-friendliness
• Employee expertise

You should be able to choose at least one of these now that you have a thorough understanding of your market.

A robust, deeply researched market analysis can serve as the centerpiece of a strong business plan, so if you completed yours in a single afternoon, you probably haven’t been thorough enough.  

If you want your business to succeed, take the time to do some serious market research and craft a plan that offers real insight on your market, your competitors, your customers, and your own vision. This will give you the best chance of attracting the financing you may need to succeed. 

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The Best Ways to Do Market Research for Your Business Plan Showing that you know the state of the market and understand what you need to do to succeed is critical in a business plan. Here's how to gather the facts you need.

By Entrepreneur Staff Jan 20, 2015

In their book Write Your Business Plan , the staff of Entrepreneur Media, Inc. offer an in-depth understanding of what's essential to any business plan, what's appropriate for your venture, and what it takes to ensure success. In this edited excerpt, the authors discuss the whys and hows of conducting market research.

Market research aims to understand the reasons consumers will buy your product. It studies such things as consumer behavior, including how cultural, societal and personal factors influence that behavior.

Market research is further split into two varieties: primary and secondary. Primary research studies customers directly, whereas secondary research studies information that others have gathered about customers. Primary research might be telephone interviews or online polls with randomly selected members of the target group. You can also study your own sales records to gather primary research. Secondary research might come from reports found on the websites of various other organizations or blogs written about the industry. For your plan, you can use either type of research or a combination of both.

The basic questions you'll try to answer with your market research include:

Who are your customers? Describe them in terms of age, occupation, income, lifestyle, educational attainment, etc.

What do they buy now? Describe their buying habits relating to your product or service, including how much they buy, their favored suppliers, the most popular features and the predominant price points.

Why do they buy? This is the tricky one, attempting as it does to delve into consumers' heads. Answers will depend on the product and its uses. Cookware buyers may buy the products that offer the most effective nonstick surfaces, or those that give the most pans in a package for a given amount of money, or those that come in the most decorative colors.

What will make them buy from you? Although some of these questions may seem difficult, you'd be surprised at the detailed information that's available about markets, sales figures and consumer buying motivations. Tapping information sources to provide the answers to as many questions as you can will make your plan more convincing and your odds of success higher. Also, the business plan software programs have detailed research included and online research available. Utilize this functionality if you're using such software, and add additional data you find elsewhere. The reason to add some of your own unique material is that everyone using the software program is tapping into the same database and you want your business plan to differ from that of the last entrepreneur in your field.

You can also find companies that will sell you everything from industry studies to credit reports on individual companies. Market research isn't cheap. It requires significant amounts of expertise, manpower and technology to develop solid research. Large companies routinely spend tens of thousands of dollars researching things they ultimately decide they're not interested in. Smaller firms can't afford to do that too often.

For companies of all sizes, the best market research is the research you do on your own. In-house market research might take the form of original telephone interviews with consumers, customized crunching of numbers from published sources or perhaps competitive intelligence you've gathered on your rivals through the social media. You can gather detailed research on customers, including their likes, dislikes and preferences, through Facebook, and use Google Analytics to sort out the numbers as they pertain to your web visitors. People are researching and making their opinions felt through their actions on the web, so you can gain a lot of marketing insight by looking closely at what is going on electronically.

You'll also want to do your due diligence within your industry. When looking at comparable businesses (and their data), find a close match. For comparative purposes, consider:

1. Companies of relative size

2. Companies serving the same geographic area, which could be global if you are planning to be a web-based business

3. Companies with a similar ownership structure. If your business has two partners, look for businesses run by a couple of partners rather than an advisory board of 12.

4. Companies that are relatively new. While you can learn from long-standing businesses, they may be successful today because of their 25-year business history and reputation.

You'll want to use the data you've gathered not only to determine how much business you could possibly do but also to figure out how you'll fit into and adapt to the marketplace.

Follow these steps to spending your market research dollars wisely:

1. Determine what you need to know about your market. The more focused the research, the more valuable it will be.

2. Prioritize the results of the first step. You can't research everything, so concentrate on the information that will give you the best (or quickest) payback.

3. Review less-expensive research alternatives. Small Business Development Centers and the Small Business Administration can help you develop customer surveys. Your trade association will have good secondary research. Be creative.

4. Estimate the cost of performing the research yourself. Keep in mind that with the internet you should not have to spend a ton of money. If you're considering hiring a consultant or a researcher, remember this is your dream, these are your goals, and this is your business. Don't pay for what you don't need.

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.

Key Takeaways

• A business plan is a document detailing a company's business activities and strategies for achieving its goals.
• Startup companies use business plans to launch their venture and to attract outside investors.
• For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
• There's no single required format for a business plan, but certain key elements are essential for most companies.

Investopedia / Ryan Oakley

Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.

Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.

A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.

While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.

A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.

Common elements in many business plans include:

• Executive summary : This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
• Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
• Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
• Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.

Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.

2 Types of Business Plans

Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
• Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.

Why Do Business Plans Fail?

A business plan isn't a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections. Markets and the economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All this calls for building flexibility into your plan, so you can pivot to a new course if needed.

How Often Should a Business Plan Be Updated?

How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.

A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.

As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.

University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.

Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

Harvard Business Review. " How to Write a Winning Business Plan ."

U.S. Small Business Administration. " Write Your Business Plan ."

SCORE. " When and Why Should You Review Your Business Plan? "

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How to Create a Market Research Plan

Before starting a business, you want to fully research your idea. A market research plan will help you understand your competition, the marketplace and more.

Table of Contents

While having a great idea is an important part of establishing a business, you’ll only get so far without laying the proper groundwork. To help your business take off, not only do you need to size up the competition, but you also need to identify who will buy your product, how much it will cost, the best approach to selling it and how many people will demand it.

To get answers to these questions, you’ll need a market research plan, which you can create yourself or pay a specialist to create for you. Market research plans define an existing problem and/or outline an opportunity. From there, the marketing strategy is broken down task by task. Your plan should include objectives and the methods that you’ll use to achieve those objectives, along with a time frame for completing the work.

What should a market research plan include?

A market research plan should provide a thorough examination of how your product or service will fare in a defined area. It should include:

• An examination of the current marketplace and an analysis of the need for your product or service: To know where you fit in the market, it’s important to have a broad understanding of your industry — covering everything from its annual revenue to the industry standards to the total number of businesses operating within it. Start by gathering statistical data from sources like the U.S. Bureau of Labor Statistics and BMI Research and consider the industry’s market size, potential customer base and how external factors such as laws, technology, world events and socioeconomic changes impact it.
• An assessment of the competition: By analyzing your competitors, you can discover strategies to fill market gaps. This involves identifying well-known competitors and noting trends they employ successfully, scrutinizing customer feedback about businesses in your sector, such as through online reviews, and understanding competitors’ product or service offerings. This knowledge can then guide the refinement of your own products or services to differentiate them from others in the market.
• Data about customers: Identify which segment of potential customers in your industry you can effectively target, considering their demographics — such as age, ethnicity, income and location and psychographics, including beliefs, values and lifestyle. Learn about the challenges your customers face in their daily lives and determine how the features and benefits of your offerings address their needs.
• The direction for your marketing in the upcoming year: Your plan should provide a clear roadmap for your marketing strategies for the next year, focusing on approaches to distinguish your brand from competitors. Develop marketing messages that resonate with and display empathy toward your target market and find ways to address customers’ needs and demonstrate value.
• Goals to be met: Outline goals your business would like to achieve and make these goals clear to all employees on your team. Create goals that are realistic and attainable while also making a meaningful impact on the business’s growth. Consider factors including your target number of products or services, the expected number of units to sell based on market size, target market behavior, pricing for each item and the cost of production and advertising.

How to create your market research plan

Doing business without having a marketing plan is like driving without directions. You may eventually reach your destination, but there will be many costly and time-consuming mistakes made along the way.

Many entrepreneurs mistakenly believe there is a big demand for their service or product but, in reality, there may not be, your prices may be too high or too low or you may be going into a business with so many restrictions that it’s almost impossible to be successful. A market research plan will help you uncover significant issues or roadblocks.

Step 1. Conduct a comprehensive situation analysis.

One of the first steps in constructing your marketing plan is to create a strengths, weaknesses, opportunities and threats (SWOT) analysis , which is used to identify your competition, to know how they operate and then to understand their strengths and weaknesses.

Step 2: Develop clear marketing objectives.

In this section, describe the desired outcome for your marketing plan with realistic and attainable objectives, the targets and a clear and concise time frame. The most common way to approach this is with marketing objectives, which may include the total number of customers and the retention rate, the average volume of purchases, total market share and the proportion of your potential market that makes purchases.

Step 3: Make a financial plan.

A financial plan is essentia l for creating a solid marketing plan. The financial plan answers a range of questions that are critical components of your business, such as how much you intend to sell, what will you charge, how much will it cost to deliver your services or produce your products, how much will it cost for your basic operating expenses and how much financing will you need to operate your business.

In your business plan, be sure to describe who you are, what your business will be about, your business goals and what your inspiration was to buy, begin or grow your business.

Step 4: Determine your target audience.

Once you know what makes you stand out from your competitors and how you’ll market yourself, you should decide who to target with all this information. That’s why your market research plan should delineate your target audience. What are their demographics and how will these qualities affect your plan? How do your company’s current products and services affect which consumers you can realistically make customers? Will that change in the future? All of these questions should be answered in your plan.

Step 5: List your research methods.

Rarely does one research avenue make for a comprehensive market research plan. Instead, your plan should indicate several methods that will be used to determine the market share you can realistically obtain. This way, you get as much information as possible from as many sources as possible. The result is a more robust path toward establishing the exact footprint you desire for your company.

Step 6: Establish a timeline.

With your plan in place, you’ll need to figure out how long your market research process will take. Project management charts are often helpful in this regard as they divide tasks and personnel over a timeframe that you have set. No matter which type of project management chart you use, try to build some flexibility into your timeframe. A two-week buffer toward the home stretch comes in handy when a process scheduled for one week takes two — that buffer will keep you on deadline.

Step 7: Acknowledge ethical concerns.

Market research always presents opportunities for ethical missteps. After all, you’ll need to obtain competitor information and sensitive financial data that may not always be readily available. Your market research plan should thus encourage your team to not take any dicey steps to obtain this information. It may be better to state, “we could not obtain this competitor information,” than to spy on the competitor or pressure their current employees for knowledge. Plus, there’s nothing wrong with simply feeling better about the final state of your plan and how you got it there.

Using a market research firm

If the thought of trying to create your own market research plan seems daunting or too time-consuming, there are plenty of other people willing to do the work for you.

Pros of using a market research firm

As an objective third party, businesses can benefit from a market research firm’s impartial perspective and guidance, helping to shape impactful brand strategies and marketing campaigns. These firms, which can help businesses with everything from their marketing campaigns to brand launches, deliver precise results, drawing on their expertise and experience to provide in-depth insights and solutions tailored specifically to your company’s needs. 

Even more, working with a market research firm can elevate a brand above the competition, as they provide credible and unique research that is highly valued by the media, enhancing brand credibility and potentially increasing website traffic, social media shares and online visibility.

Cons of using a market research firm

Although hiring a firm can provide businesses with tremendous results, certain downsides can lead a business toward the do-it-yourself route. Most notably, market research firms can be a costly expense that some businesses can’t afford. However, businesses that can allocate the funds will likely see a positive return on investment, as they are paying for the expertise and proficiency of seasoned professionals in the field.

Additionally, finding the right market research firm for your business’s needs can take some time — and even longer, ranging from weeks to months, for a market research firm to complete a plan. This lack of immediate results can be detrimental for businesses that don’t have the time to wait. 

Market research firms can charge into the thousands of dollars for a market research plan, but there are ways to get help more affordably, including:

• Outline your plans carefully and spell out objectives.
• Examine as many sources as possible.
• Before paying for any information, check with librarians, small business development centers or market research professors to see if they can help you access market research data for free.
• You may think you’ll need to spend a hefty sum to create a market research plan, but there are plenty of free and low-cost sources available, especially through university business schools that will guide you through the process.

Miranda Fraraccio contributed to this article. 

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Research: Writing a Business Plan Makes Your Startup More Likely to Succeed

• Francis J. Greene
• Christian Hopp

It’s particularly important if you plan to raise money.

When asked about an opponent’s plan for their impending fight, former world heavyweight champion Mike Tyson once said: “everyone has a plan until they get punched in the mouth.” It is a school of thought now fashionable in entrepreneurship circles. The truth, though, is that we just don’t know if it pays to plan. For every study that shows that it does, another study comes along and says that start-ups should just learn by doing. We wanted to study entrepreneurial planning, but with more context than previous efforts. We found that it pays to plan. Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical non-planning entrepreneurs. More than that, we were also able to see what makes people write business plans in the first place.

When asked about an opponent’s plan for their impending fight, former world heavyweight champion Mike Tyson once said: “Everyone has a plan until they get punched in the mouth.”

• FG Francis J. Greene is Chair in Entrepreneurship in the University of Edinburgh Business School.
• CH Christian Hopp is Chair in Technology Entrepreneurship in the TIME Research Area, the Faculty of Business and Economics, RWTH Aachen University.

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How to do Market Research When Creating a Business Plan in 2024

Market research significantly enhances your business plan by providing essential insights into the industry, competitors, and target market. It reveals critical data about demand, pricing strategies, and customer demographics, crucial for your business’s success. For instance, understanding spending power and preferences of your target market helps in tailoring marketing strategies effectively. A reputable source notes, “Market research furnishes entrepreneurs with invaluable data, enabling them to make informed decisions that align closely with market demands and opportunities”.

Market research serves as your guide through the complex landscape of business planning. It empowers you to craft strategies that resonate with your target audience, optimize your product offerings, and set competitive prices. By integrating detailed demographic and competitor analysis, you position your business to capitalize on market opportunities and mitigate potential risks. This strategic approach not only streamlines product development and marketing but also enhances overall business viability and potential for success.

How does market research influence financial projections in a business plan?

Market research directly impacts your financial projections by providing data-driven insights into potential revenue streams and cost structures. It helps you forecast sales, understand market trends, and set realistic financial goals. Detailed analyses of competitor pricing and consumer spending habits allow you to adjust your budgeting and financial planning more accurately.

• Identify revenue opportunities by analyzing market size and growth potential.
• Assess cost implications through competitor and industry benchmarking.
• Enhance financial accuracy with targeted consumer demographic studies.

This focus on financial specifics ensures that your business plan is not only theoretically sound but also practically viable. Market research bridges the gap between strategic planning and financial reality, enabling you to create a robust business plan grounded in concrete data and realistic projections. By continuously aligning your financial strategies with market research findings, you maintain relevance and competitiveness in a dynamic market environment.

How to Conduct Market Research for a Business Plan?

You need to follow a structured approach to conduct market research effectively. Start by defining your objectives, such as understanding market trends or identifying customer needs. Secondary research from industry reports and trade publications provides a broad market context. Primary research through surveys and interviews offers direct insights into customer preferences.

According to industry experts, “Effective market research is the cornerstone of any successful business plan, as it provides critical insights into the market and competitive landscape”. This emphasizes the importance of thorough research in strategy development.

Market research begins with clear objectives and involves both secondary and primary methods to gather comprehensive data. Your target market’s demographics and behaviors are crucial for tailoring your business strategy. Analyzing this data helps in segmenting the market and developing customer personas, which are essential for effective targeting. Assessing competitors allows you to position your business strategically. Finally, synthesizing all findings into your business plan demonstrates a data-driven approach to potential stakeholders.

What Are the Key Benefits of Conducting Market Research?

Market research significantly enhances your business plan by providing insights that inform your strategy and decision-making. It helps you understand customer needs and market trends, ensuring your product meets demand.

• Identify emerging trends that could impact your business model.
• Understand customer behaviors and preferences to tailor your offerings.
• Analyze competitors to find your unique selling proposition.

This process not only supports your initial business strategy but also prepares you for adapting to market changes, keeping your business relevant and competitive. By continuously updating your market research, you ensure that your business strategy evolves with the market, maintaining its effectiveness over time.

How do you determine which market research metrics are important when creating a business plan?

You identify the key performance indicators (KPIs) that align with your strategic goals and objectives. Market research metrics like Customer Satisfaction Score (CSAT) and Net Promoter Score (NPS) are crucial when your goal is to improve customer retention. Metrics assessing market demand, size, and growth potential are essential for setting realistic sales targets. Financial KPIs such as Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLV) gauge the financial health and profitability of your business.

“Selecting the right market research metrics involves aligning them with your business’s strategic goals to provide actionable insights,” according to industry experts.

Metrics selection begins with a clear understanding of your business objectives. Whether your aim is to increase market share, enhance customer satisfaction, or launch new products, each goal dictates the metrics you should focus on. For instance, if enhancing brand awareness is your target, you would look at unaided and aided brand awareness metrics. This approach ensures that every metric you track is tied directly to an aspect of your business growth or improvement, making your market research efforts both targeted and effective.

What are the benefits of choosing the right market research metrics for your business plan?

Selecting appropriate metrics helps you measure success accurately and make informed decisions. It allows you to tailor your strategies to meet customer needs effectively, optimize your market position, and enhance overall business performance.

• Measure Success : Track progress against predefined objectives to ensure you are on the right path.
• Inform Decisions : Use data-driven insights to make strategic business choices.
• Optimize Strategies : Adjust marketing and operational strategies based on customer feedback and market conditions.

By focusing on metrics that directly relate to your strategic goals, you ensure that all efforts contribute towards the overarching objectives of your business. This targeted approach not only streamlines your operations but also enhances your ability to adapt to market changes and customer preferences effectively.

Why are customer pain points one of the most important metrics to research when creating a business plan?

You need to understand customer pain points to tailor your business offerings effectively, ensuring they meet market demands and enhance customer satisfaction. Research shows that businesses addressing these pain points increase customer loyalty by 45% and improve retention rates by up to 50%. Additionally, companies that focus on solving customer problems report a 30% higher rate of innovation and competitiveness.

According to industry experts, “Identifying customer pain points not only helps in enhancing the product fit but also significantly boosts the overall market positioning of the business”.

Customer pain points guide your business strategies, ensuring products and services solve real issues. This focus transforms your business into a solution-oriented entity, enhancing customer relationships and fostering loyalty. By addressing these specific issues, your business stands out as a customer-centric brand, which is crucial in today’s competitive market. This strategic alignment results in a robust value proposition, attracting new customers and retaining existing ones, thereby driving sustainable business growth.

How can identifying customer pain points improve your business strategy?

By recognizing and addressing these pain points, you enhance your business’s relevance and appeal directly. This strategic focus leads to improved product development, more effective marketing strategies, and better customer service.

• Enhance product development by aligning offerings with customer needs, increasing satisfaction and usability.
• Tailor marketing strategies to highlight solutions to common problems, enhancing engagement and conversion rates.
• Improve customer service by understanding and addressing the specific issues customers face, boosting satisfaction and loyalty.

Identifying and addressing customer pain points allows you to refine your business strategy, ensuring it is not only aligned with but also proactive in meeting customer needs. This approach not only improves the customer experience but also fosters a positive brand perception, which is vital for long-term success. By focusing on what truly matters to your customers, your business remains competitive and relevant in a rapidly evolving market.

What to Identify About Customers When Conducting Market Research for a Business Plan?

You must gather comprehensive information about potential customers to tailor strategies effectively. Key aspects include demographic, geographic, psychographic, and behavioral data. Demographic information such as age, gender, and income level helps understand who the customers are. Geographic details like location and climate influence product offerings and marketing strategies. Psychographic information reveals why customers may prefer certain products, guiding personalized marketing efforts.

“Understanding customer demographics, psychographics, and behaviors is essential for tailoring marketing strategies and product development,” states a market research expert.

Customer profiles encompass a range of data points that define purchasing behaviors and preferences. Demographic data provides insights into the customer’s background, influencing how you approach them. Geographic and psychographic information allows for the customization of marketing messages and product features to better suit the customer’s environment and lifestyle. Behavioral data, including purchasing patterns and brand loyalty, helps refine marketing tactics and product offerings to increase customer satisfaction and loyalty.

How Can This Information Impact Your Business Strategy?

This data directly influences your business strategy by enabling targeted marketing and product customization. Understanding your customers’ demographics, preferences, and behaviors allows you to design products and services that meet their needs and exceed their expectations. For instance, knowing the age and income level can help determine the price sensitivity of your market segment.

• Tailor marketing messages : Use demographic and psychographic data to craft compelling marketing communications that resonate with your target audience.
• Customize products and services : Align product features and benefits with the identified needs and preferences of your customers.
• Enhance customer engagement : Apply behavioral and technographic data to choose the most effective channels for customer interaction.

These strategies, rooted in deep customer understanding, ensure that your business aligns its offerings with market demands, thereby enhancing competitiveness and market relevance.

Incorporating detailed customer insights into your business plan ensures that every aspect of your strategy—product development, marketing, sales, and customer service—is finely tuned to meet the demands of your target market. By understanding not just who your customers are, but also their lifestyles, preferences, and behaviors, you can create a more compelling and successful business strategy that is responsive to customer needs.

What should you identify about competitors when conducting market research for your business plan?

You must gather detailed information on competitors to strategically position your business for a competitive advantage. Key aspects include business overview, product offerings, market share, customer base, marketing strategies, sales tactics, strengths and weaknesses, technological capabilities, customer feedback, and regulatory compliance. According to a study, understanding these elements can significantly enhance strategic planning and market positioning.

“Thorough competitor analysis allows businesses to identify market gaps and opportunities, ensuring a robust strategic approach,” notes a business strategist in a recent publication.

A comprehensive competitor analysis involves scrutinizing various dimensions of competing businesses. Business overview sets the stage by revealing the competitor’s history, size, and market reach. Product and service offerings highlight what competitors provide and at what price, offering insights into market demands and pricing strategies. Market share and financial performance metrics are critical as they reflect the competitor’s market strength and economic stability. Understanding the customer base helps tailor your marketing efforts effectively. Analyzing marketing and sales tactics offers a glimpse into the operational effectiveness and market penetration strategies of competitors. Technological capabilities indicate the level of innovation and adaptation in competitor operations. Lastly, customer reviews and regulatory standings provide a direct line to competitor’s reputational and compliance status.

Why is it crucial to analyze the strengths and weaknesses of competitors during market research?

Analyzing these aspects helps you pinpoint areas where your business can excel and where it may be vulnerable. This strategic insight guides resource allocation and strategy development.

• Assess competitors’ strengths to understand what draws customers to them.
• Identify weaknesses to explore potential market opportunities for your business.
• Examine financial stability to gauge long-term viability and market presence.

Understanding the strengths and weaknesses of competitors allows you to craft strategies that leverage your business’s unique capabilities while addressing potential threats. This dual approach ensures a balanced and informed business plan that anticipates competitive dynamics and aligns with market realities.

What are the methods of gathering information when conducting market research for a business plan?

You can categorize these methods into primary and secondary research. Primary research methods include surveys, focus groups, interviews, observations, and experiments, which provide direct insights from consumers. Secondary research methods involve analyzing existing data like industry reports, competitor analysis, and public domain data, offering a broader understanding of market trends.

According to experts, “Primary research delivers direct feedback from potential customers, while secondary research provides contextual market understanding essential for strategic planning.”

Primary research methods allow direct interaction with the market, enabling you to collect specific data relevant to your business needs. Surveys and questionnaires, for instance, can yield both quantitative and qualitative data, offering a balanced view of consumer opinions and behaviors. Focus groups and interviews delve deeper, providing nuanced insights that help refine your business strategies. Observations and experiments test real-world reactions, enhancing product or service offerings based on actual consumer responses.

How do these methods impact the effectiveness of a business plan?

These methods significantly enhance the accuracy and relevance of your business plan. By integrating both primary and secondary research, you ensure a robust foundation for your strategic decisions.

• Surveys reveal consumer preferences and needs, guiding product development and marketing strategies.
• Focus groups provide depth to these insights, highlighting potential areas for innovation or improvement.
• Competitor analysis sharpens your competitive edge, informing you about market gaps and opportunities.

These research methods ensure your business plan is not only reflective of current market conditions but also anticipatory of future trends. By understanding both consumer behavior and competitive dynamics, you position your business for success in a crowded marketplace.

What Tools Can Help with Gathering Information When Conducting Market Research for a Business Plan?

You can utilize a variety of tools to efficiently gather comprehensive information for your business plan. SurveyMonkey, Google Trends, and Statista stand out for their ability to collect and analyze market data. For instance, SurveyMonkey enables the creation and distribution of surveys, collecting valuable customer feedback. Google Trends offers insights into the popularity of search terms over time, helping you understand market interests.

Statista provides extensive market and consumer data, which is crucial for data-driven decision-making in your business strategy. These tools not only facilitate data collection but also enhance the analysis, allowing you to tailor your business plan based on real-time market trends and consumer behavior.

The effectiveness of these tools lies in their ability to provide detailed and actionable market insights. SurveyMonkey, for example, allows you to directly engage with your audience, gaining firsthand insights that can shape your business offerings. Google Trends helps you track changes in market dynamics, enabling you to adjust your marketing strategies accordingly. Statista’s comprehensive reports equip you with the necessary data to back your business decisions.

How Can These Tools Specifically Enhance the Quality of a Business Plan?

These tools enhance your business plan by providing precise, up-to-date market and consumer insights. You can tailor your strategies to meet the actual needs and preferences of your target market. For example, using SurveyMonkey to gather customer feedback directly influences product development and customer service improvements. Google Trends allows you to observe seasonal trends and consumer interest peaks, aiding in timely marketing campaigns.

• Identify emerging trends : Google Trends reveals shifts in consumer interests, helping you stay ahead in your industry.
• Understand consumer behavior : Statista offers detailed reports on consumer habits and market conditions, guiding strategic decisions.
• Gauge competitive landscape : Tools like Semrush provide insights into competitors’ strategies, allowing for informed competitive positioning.

These tools collectively contribute to a robust, data-driven business plan. By integrating consumer feedback, trend analysis, and competitive insights, you ensure your business strategy is both responsive and informed.

Incorporating tools like SurveyMonkey, Google Trends, and Statista into your market research process not only enriches the data at your disposal but also transforms this data into actionable insights that directly inform your business strategies. By understanding and applying the information these tools provide, you can craft a business plan that accurately reflects market realities and consumer preferences, positioning your business for success in a competitive landscape.

What questions should you ask when conducting market research for your business plan?

You need to explore various dimensions such as customer understanding, product evaluation, market and industry analysis, competitive analysis, brand perception, and pricing strategy. According to a study, 72% of successful businesses emphasize comprehensive market research to understand customer preferences and competitive dynamics. Another report highlights that 65% of marketing leaders use market research to decide strategic directions.

“Effective market research is crucial for the development of a viable business strategy,” notes a recent business journal, emphasizing the importance of asking the right questions to gather actionable data.

Market research questions form the backbone of your business strategy, providing critical insights into who your customers are, what they need, and how they make purchasing decisions. Customer understanding questions delve into demographics, behaviors, and pain points, helping you tailor your offerings. Product evaluation queries assess how your product stands out in the market, while competitive analysis gives you an edge by understanding your rivals’ strengths and weaknesses. Questions about market size, trends, and barriers from the market and industry analysis section guide your market entry strategy. Brand perception and pricing strategy questions further refine your approach, ensuring alignment with customer expectations and market standards.

What impact does thorough market research have on your business plan’s success?

Effective market research significantly enhances your business plan by providing a solid foundation for decision-making and strategy formulation. It helps identify market opportunities, optimize product development, and tailor marketing strategies to target audiences.

• Identify market gaps and opportunities, allowing for strategic positioning and product differentiation.
• Optimize product features and services based on direct customer feedback and competitive insights.
• Tailor marketing and communication strategies to preferred channels and messages that resonate with your target audience.

Thorough market research not only informs the various aspects of your business plan but also mitigates risks by validating assumptions and providing a clear path forward. It equips you with the knowledge to make informed decisions, adapt to market changes, and strategically position your brand in a competitive landscape. By understanding and responding to customer needs and market conditions, you enhance your potential for success and sustainability.

Where can you gather data when conducting market research for a business plan?

You can collect data from primary and secondary research sources, each offering unique insights and information. Primary sources include surveys, interviews, and social media monitoring, while secondary sources encompass industry reports, government data, and academic journals. These methods provide a mix of quantitative and qualitative data essential for informed decision-making.

According to the Market Research Association, “Effective market research draws on a range of sources, both primary and secondary, to gather the necessary data for business planning.” This approach ensures a comprehensive understanding of the market landscape.

Primary research methods allow direct interaction with your target audience, giving you firsthand insights into consumer behaviors and preferences. Secondary research, on the other hand, offers a broader context, helping you understand industry trends and competitive dynamics. Utilizing both types of research ensures a robust business plan, equipped with detailed, actionable data.

What types of data can you expect from primary and secondary research methods?

Primary research typically yields direct feedback and specific behavioral insights, while secondary research provides contextual and historical data that outline industry trends and benchmarks. Together, these data types form a comprehensive market analysis.

• Surveys and Questionnaires provide quantifiable data on consumer preferences and behaviors.
• Interviews and Focus Groups offer qualitative insights into customer motivations and experiences.
• Industry Reports deliver trend analyses and market forecasts.
• Government and Official Data supply economic indicators and demographic statistics.
• Academic Journals present peer-reviewed research findings relevant to your market.

Each source plays a crucial role in painting a complete picture of the market, enabling businesses to strategize effectively. By integrating these diverse data streams, you enhance the accuracy and relevance of your business plan.

In summary, primary and secondary research methods are indispensable tools in market research. They provide a spectrum of data, from specific consumer insights to general industry trends, all of which are crucial for crafting a well-informed business plan. By leveraging both types of data, you position your business for success in a competitive landscape.

How to Find a Good Source or Database for Market Insights When Creating a Business Plan?

You can find a good source or database for market insights by clearly defining your information needs and utilizing specialized research tools and databases. Libraries, especially those at universities, often provide access to essential business databases like S&P Global Net Advantage and Gale Business Insights. Online platforms such as IBISWorld and Statista deliver detailed industry reports and statistics, crucial for understanding market trends and consumer behavior.

“Access to accurate and comprehensive market data is critical for developing a robust business plan,” according to experts at Fordham University Libraries. This statement underscores the importance of selecting the right tools and databases for market research.

Market research databases offer a wealth of information, from customer demographics to competitive analysis. These resources help you understand the industry landscape and identify potential opportunities and threats. By engaging with databases like Mergent Online or MarketResearch.com Academic, you gain insights into financial benchmarks and industry-specific trends that can shape your strategic decisions. Utilizing government resources like the U.S. Small Business Administration can also provide valuable data and statistics for free, which is particularly beneficial for startups and small businesses.

What Should You Consider When Choosing a Market Research Database?

When choosing a market research database, consider the specificity and relevance of the information to your industry. Ensure the database offers comprehensive, up-to-date information and user-friendly access. For instance, databases like Mintel Reports and MarketResearch.com provide extensive market research reports focusing on consumer markets, which are invaluable for businesses targeting specific demographic groups.

• Evaluate the database for industry relevance ensures the data aligns with your business needs.
• Check for recent updates and reports to ensure the information is current and reflective of market conditions.
• Assess accessibility and user support to guarantee you can efficiently utilize the database resources.

Choosing the right market research database involves careful consideration of these factors to ensure the information obtained is applicable and beneficial for your business planning process. By focusing on databases that offer detailed and relevant market insights, you position your business for informed decision-making and strategic planning.

How to Quickly Analyze and Interpret Market Research Data for Creating a Business Plan?

To swiftly analyze and interpret market research data for crafting a business plan, you should follow a structured approach. This method involves defining clear research objectives, organizing data efficiently, and applying both descriptive and inferential analysis. For instance, using descriptive statistics like mean and median can summarize trends, while inferential statistics allow for broader population predictions.

According to experts, “Effective data organization and analysis not only streamline the process but also enhance the accuracy of business insights”. Visualization tools such as Tableau or Microsoft Power BI are crucial in making complex data sets accessible and understandable.

A robust analysis begins with well-defined objectives that align with your business goals, ensuring that every piece of data analyzed contributes directly to strategic decision-making. Organize your data in a format that allows for easy access and manipulation. Employ statistical tools to uncover patterns and relationships within the data. Visualization aids in interpreting these patterns, making them clear and actionable. Finally, cross-verification of findings ensures the reliability of your conclusions, minimizing biases and errors.

What Are the Key Benefits of Using Structured Data Analysis in Business Planning?

Structured data analysis significantly enhances your business planning by providing clear, actionable insights. It allows you to make informed decisions based on empirical data rather than assumptions. This approach not only saves time but also increases the precision of your business strategies.

• Enhances Decision Making : Empirical data provides a solid foundation for making strategic decisions, reducing the reliance on intuition.
• Increases Efficiency : Organizing data systematically saves time and resources, allowing for quicker analysis and interpretation.
• Improves Accuracy : Using statistical tools to analyze data helps in identifying true market trends and consumer behaviors, leading to more accurate business predictions.
• Supports Strategic Alignment : Each step of the analysis is aligned with the business’s goals, ensuring that all insights directly support strategic initiatives.

By integrating structured data analysis into your business planning, you ensure that every decision is backed by solid data, enhancing both the efficiency and effectiveness of your business strategies. This method not only streamlines the process but also provides a competitive edge by aligning detailed market insights with your business objectives.

How to Document and Incorporate Market Research Data in Your Business Plan?

To effectively integrate market research data into your business plan, you must follow a structured approach. Market research data reveals customer demographics, market size, growth trends, competitive analysis, and customer preferences, which are crucial for your business strategy. For instance, 60% of businesses that conduct regular market research outperform their competition, as they are better equipped to meet market demands and adjust to changing conditions. Visual aids like charts and graphs enhance comprehension and engagement, making complex data easily understandable.

Experts suggest, “A well-documented market analysis section that aligns with business strategies significantly increases the likelihood of attracting investment” . This highlights the importance of linking market data directly to your business objectives.

Market research data serves as the backbone of your business plan. Summarizing key findings provides a clear overview, while integrating this data into the market analysis section outlines how you will address market needs. Visual representations such as charts and graphs play a pivotal role in making the data accessible. Moreover, documenting the sources and methodologies enhances the credibility of your data, ensuring stakeholders trust the insights provided. Regular updates to the market research reflect current market conditions, keeping your business plan relevant and actionable.

What are the benefits of regularly updating the market research data in your business plan?

Regular updates to your market research data ensure your business remains aligned with current market conditions. This proactive approach allows you to adapt swiftly to market changes, maintaining a competitive edge. For example, updating your data might reveal a shift in customer preferences or emerging market trends that could significantly impact your business strategy.

• Identify emerging trends : Regularly updated data helps you spot trends as they arise, giving you a first-mover advantage in the market.
• Adjust business strategies : With current data, you can refine your strategies to better meet customer needs and market demands.
• Enhance investment appeal : Investors are more likely to support a business that demonstrates awareness and adaptability to market dynamics.

Incorporating the latest market research into your business plan not only keeps your strategies relevant but also demonstrates a commitment to data-driven decision-making. This approach not only enhances the internal strategies but also builds investor confidence by showcasing a thorough understanding of the market landscape.

What tools or software can help in doing market research for creating a business plan?

Several tools and software significantly aid in conducting market research for creating a business plan. IdeaApe, SurveyMonkey, and SEMrush are among the most effective, providing insights into customer behavior, preferences, and market positioning. These platforms offer capabilities ranging from survey creation and data analysis to SEO insights and competitive intelligence, essential for informed decision-making.

“Tools like Google Analytics and SEMrush provide critical insights that help businesses understand their market and refine their strategies,” according to industry experts.

Market research tools such as Google Analytics, SEMrush, and IdeaApe empower you with data-driven insights. These tools analyze website traffic, user behavior, and competitive landscapes, enabling you to tailor your business strategies effectively. By leveraging these insights, you can enhance your understanding of market dynamics, optimize your marketing efforts, and better meet customer needs.

How do these tools enhance the effectiveness of market research?

These tools enhance market research by providing detailed analytics and real-time data, allowing you to make informed decisions quickly. They offer insights into consumer behavior, market trends, and competitive analysis, which are crucial for adapting and thriving in dynamic markets.

• Analyze trends : IdeaApe reveals the pain points of Reddit threads, helping you stay ahead of market shifts.
• Gather consumer feedback : SurveyMonkey enables direct customer engagement through surveys, gathering valuable feedback that informs product development and marketing strategies.
• Visualize data : Tableau transforms complex data sets into understandable visual formats, making it easier to identify patterns and insights.

By integrating these tools into your market research processes, you gain a comprehensive view of your industry’s landscape. This integration allows for more strategic planning and targeted marketing efforts, ultimately leading to better business outcomes.

You can leverage several tools and software to conduct effective market research for your business plan. Google Analytics, IdeaApe, and SEMrush stand out as particularly useful for gathering and analyzing data relevant to your market. Google Analytics offers insights into website traffic and user behavior, crucial for understanding online customer engagement. SurveyMonkey allows you to collect direct feedback from customers, helping you grasp consumer preferences and market needs. SEMrush provides comprehensive SEO and marketing analytics, essential for assessing your market position and spotting opportunities.

“Tools like Google Analytics, SEMrush, and SurveyMonkey have become indispensable in the arsenal of a market researcher, offering a blend of analytical depth and user feedback that is crucial for any business plan,” notes a market research expert.

These tools empower you to collect a variety of data types—from user behavior to competitive insights—enabling a thorough understanding of your market landscape. Google Analytics, for instance, delves into demographic data and user engagement metrics, providing a clear picture of who your customers are and how they interact with your online presence. SurveyMonkey facilitates direct communication with your customer base, yielding qualitative insights that quantitative data alone cannot offer. IdeaApe enhances your competitive edge by analyzing social media trends and keyword effectiveness.

How can these tools specifically enhance the quality of a business plan?

These tools enhance your business plan by providing detailed, actionable insights that inform strategic decisions. You can tailor your marketing and product development strategies based on data-driven insights from tools like Google Analytics and IdeaApe. For example, understanding user behavior through Google Analytics helps you optimize your website and marketing campaigns for better engagement and conversion rates. SEMrush’s competitor analysis features allow you to identify market gaps and opportunities, positioning your business more competitively.

• Analyze user engagement : Google Analytics reveals how users interact with your site, highlighting areas for improvement in user experience and engagement.
• Gather direct customer feedback : IdeaApe enables you to understand customer needs and preferences through targeted Social Media analysis, directly influencing product development and marketing strategies.
• Identify competitive opportunities : SEMrush offers insights into your competitors’ strategies, helping you to find niches and optimize your market positioning.

You ensure that your business plan is not only informed by comprehensive market data but also aligned with current industry trends and consumer behaviors. This approach not only enhances the precision of your business strategy but also boosts your potential for success in a competitive market.

How Can AI Save Time in Conducting Market Research for Business Planning?

AI significantly reduces the time required for market research in business planning by automating data collection and analysis. Tools like Browse AI and IdeaApe Market Explorer streamline the gathering and processing of vast amounts of data, providing insights faster than traditional methods. For instance, predictive analytics with Pecan can forecast market trends, while sentiment analysis tools like Brand24 offer immediate customer perception insights. Additionally, real-time data analysis platforms such as Algolia deliver instant competitor and consumer behavior analytics.

According to a study by McKinsey, businesses employing AI in market research report up to a 50% reduction in time spent on data gathering and analysis. “AI not only speeds up the process but also enhances the accuracy of market research, leading to better-informed business strategies,” notes the report.

How does IdeaApe help small businesses understand their market better?

IdeaApe simplifies market research, making it accessible and efficient for small businesses. The tool provides simplified market research processes, idea validation, comprehensive analysis, competitor analysis, content and pricing strategy, and real-time social media monitoring. These features enable entrepreneurs to conduct thorough market research without needing extensive expertise, validate their business ideas by understanding market demand and competition, and stay updated with real-time market trends. Experts highlight, “IdeaApe’s integration of real-time data analysis and simplified research tools significantly reduces the barriers for small businesses entering new markets, offering them a competitive edge by providing insights into consumer behavior and market trends”. IdeaApe stands as a pivotal resource for small businesses. The tool’s ability to analyze vast amounts of data from various sources offers a well-rounded assessment of a business idea’s viability. Small businesses benefit from insights into consumer desires and pain points, which are crucial for tailoring products and services to meet market demands. Additionally, IdeaApe’s competitor analysis feature alerts businesses to changes in the competitive landscape, allowing them to identify opportunities and threats swiftly.

How does real-time social media monitoring by IdeaApe benefit small businesses?

Real-time social media monitoring by IdeaApe provides small businesses with immediate insights into market trends and consumer reactions. This feature allows businesses to stay ahead of competitors and react quickly to changes in consumer preferences and market conditions. By leveraging this data, businesses can make informed decisions, adjust their strategies promptly, and maintain relevance in their market.

• Identifies emerging trends : IdeaApe detects shifts in consumer interests and market dynamics, enabling businesses to adapt their offerings.
• Monitors competitor activities : The tool keeps track of competitors’ social media strategies, helping businesses anticipate and counter moves effectively.
• Enhances customer engagement : By understanding current discussions and sentiments, businesses can create content that resonates with their audience, improving engagement and loyalty. Real-time social media monitoring not only keeps businesses informed but also actively engaged with their audience. By analyzing social media data, IdeaApe helps businesses understand the nuances of consumer behavior, enabling them to craft strategies that align closely with customer expectations and market requirements. This proactive approach ensures that small businesses remain competitive and responsive in a rapidly changing market.

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How To Do Market Research For Your Business

Before you start a new business, new product, or service, it is important to conduct thorough and accurate market research. Market research includes research into the target customer of the product or service as well as any competitors that may already be providing a similar product or service.

In this article, we will give you some tips on how to go about conducting market research for your new business.  

What is Market Research?

First, let’s take a look at what market research actually is. Market research is the process of collecting information about a particular market sector or industry. This information can be used to help you understand your target customer, their needs and wants, as well as any potential competition.

Why Do Market Research?

There are a few key reasons why it is important to conduct market research before starting a business:

• To understand your target audience and what they want/need
• To understand the size of the potential market for your product or service
• To identify any potential competition and how you can differentiate yourself from them
• To understand the costs and revenue potential for your business
• To develop a marketing strategy

It is important to remember that market research should not be conducted solely to sell your product or service. The purpose of market research is to help you understand what customers want and need, as well as how many potential customers there are in your target area. If a business does not meet the needs of its customer base, it will lose out on a lot of revenue.

Primary and Secondary Research Methods For A Business

There are two main types of market research methods – primary and secondary research.

Conducting Primary Research

Primary market research is the process of gathering information from people who may be interested in your business or potential customers directly. This type of market research can be done through a number of different methods, including:

• Focus groups allow you to find out what consumers think about a product or service. In a focus group, a small group of people are brought together to discuss a particular topic.
• In-depth interviews are one-on-one interviews with potential customers about their needs and wants when it comes to your product or service.
• Questionnaires allow you to gather information from a large number of people in a short period of time.
• Online surveys involve emailing potential customers and asking them questions about their needs and wants with regard to your new business.

Exploratory Primary Research

Exploratory primary research provides you with the opportunity to test your great business idea before starting up. This method of primary market research is conducted on people who are not customers yet but could be in the future. It typically involves collecting information about consumers’ needs and wants when it comes to a product or service that would meet those needs.

Specific Primary Research

Specific primary research is conducted when you already have a product or service and are looking to find out more about it. This information can help you identify any areas of improvement for your product or service, as well as provide insight into where the market will be in the future.

Conducting Secondary Research

Secondary market research is the process of gathering information that has already been gathered by someone else. This information can be found in a number of different places, including:

• Market reports analyze data from a particular market or industry.
• Company websites can be a great source of information about your potential competitors.
• Trade journals contain articles about specific industries or consumer markets.
• Government websites often have market statistics about various industries.

Public Sources

There are several public market data sources available including directories, databases, and other websites that provide publicly available information.

• Business directories allow you to find a list of other companies in a particular industry.
• Product review websites can help you understand the quality of your competitors’ products.
• Market research reports give you current data on a particular market or industry.
• Government census reports can give you valuable insight into industry trends.
• Databases allow you to search for a particular company or product.

Commercial Sources

There are commercial secondary data sources that provide a vast amount of information on various industries, but you have to pay for a subscription in order to access their database. These include:

• Industry-specific databases allow you to search a number of different sources for information about a particular market or industry. These types of databases can be very expensive.
• Trade magazines contain articles that are mostly targeted at business owners and managers, while trade journals tend to target academics and other professionals in the field who want to gain new consumer insights.
• Market research firms offer a variety of services, from providing market analysis to conducting focus groups.
• An industry trade association often has market research reports that are available to members only.

Once you have a general understanding of the different types of market research, you need to decide which type(s) will work best for your new business. The following questions can help you make that decision:

Do you have a product or service to sell?

If you have a product or service to sell, then you will need to conduct specific-problem research in order to understand how your product or service meets the needs and wants of potential customers.

What is the target market for your product or service?

If you know who your target audience is, then you can focus your research on that particular group of people.

What are the needs and wants of your target market?

To understand what the needs and wants of your target market are, you will need to do some exploratory research. This involves talking to potential customers about their needs and wants, as well as researching what is currently available in the market.

What are your competitors’ products and services?

If you know what your competitors are selling, you can use that information to understand the needs and wants of your target market. You can also use it to identify any areas where you may have an advantage over your competitors.

Types of Market Research

There are several types of market research including:

• Specific-Problem Research : This type of market research is most commonly used for new products or services. It involves understanding the problems that customers are having with existing solutions, and how your product or service can provide a solution to those problems.
• Exploratory Research : This type of research is used to gain a better understanding of a particular market or group of customers. It involves talking to potential customers about their needs and wants, as well as researching what is currently out there.
• Competitive Research & Intelligence : This research is used to identify the strengths and weaknesses of your direct and indirect competitors, in order to help figure out how you can differentiate your company or product.
• Market Segment Research : Market segmentation involves separating your potential customers into groups based on similar needs, wants, or characteristics.
• Product Positioning : Product positioning focuses on how you want your product to be viewed in the market by your target audience.
• Economic Research & Analysis : This research is often conducted when deciding whether or not to start a business in a particular industry. It involves understanding the economic factors that could impact your business.
• Marketing Research : This research is used to understand consumer behavior, including what products or services they are interested in, and how much they are willing to spend on them.
• New Product Development : This type of market research is done during the development stage of a new product or service, and involves testing different options with consumers to determine which version would be most successful on the market.
• Social Research & Analysis : This research focuses on understanding the impact that your company’s social actions have on the public and how to use this information in a positive way.
• Distribution Research : This type of research is focused on understanding where consumers purchase products and services, and how to gain access to those distribution channels.
• Allocation Research : This type of research focuses on understanding which distribution channel will best reach your target audience.
• Market Forecasting and Trends Analysis : This research looks at historical primary data to determine future market trends.
• Pricing Research : This research is focused on understanding how much your target audience is willing to pay for your product or service, and what the competition is charging for similar products.

Once you have identified the type of research you will be conducting, you need to decide who your target market is. This can be done by doing a customer profile, which will help you understand what your target customer looks like. You will also need to determine where to find these target customers and how to reach them.

How to Do Good Market Research

Let’s take a look at the market research process. The following steps will help you get started:

Determine the purpose of your market research

To start the market research process, you need to determine the purpose of your research. What do you want to find out? What are your goals?

Define your target customer

The first step in conducting market research is to define your target customer. This is the group of people that you are hoping to sell your product or service to. You need to understand who they are, what they want, and what needs your product or service can meet.

Gather data about the market

Once you have defined your target customer, you need to gather data about the market. This data can include detailed information such as population data, demographics (age, gender, income, etc.), purchasing power, and what products and services are already available.

Analyze your data

Once you have gathered data about the market, you need to analyze it to see what trends it brings to light. For example, if your target customer wants a product that is inexpensive and easy to use, this information will be useful when you are deciding on your product features. If you are providing a service, you need to research the average salary in your target area so that you can price your services correctly.

Perform a SWOT analysis

Once you have gathered your data and conducted your interviews, you need to perform a SWOT analysis. A SWOT analysis will help you consolidate all of the information that you have gathered and identify your business’s strengths, weaknesses, opportunities, and threats.

Conduct a competitive analysis

Once you have analyzed the specific market research data, it’s time to conduct an analysis to better understand the competitive environment. This entails researching other businesses in your area that provide similar products or services and understanding how they operate. It is important to understand what makes your business different from the competition and how you can capitalize on it.

Create a business plan

Once you have completed your market research, it is important to include the findings in your business plan. The business plan will help you to determine if your new business is feasible and how you will go about marketing and selling your product or service.

This document will outline your business goals, marketing strategies, and how you plan on achieving them. Your market research should be included in the appendix as a supporting document for your claims within the business plan.

Market research should not be conducted solely to sell your product or service. The purpose of market research is to help you understand what customers want and need, as well as how many potential consumers there are in your target area.

Do Market Research Regularly

Once you have started your business, it is a good idea to conduct market research on a regular basis. This will help you identify any changes in consumer behavior and adjust your marketing plan accordingly. You can also conduct market research to identify your target market, which will help you to tailor your product or service to them.

Don’t Forget the Business Plan!

Once you have completed your market research, remember that it should be included in your business plan. Your business plan provides a method for showing investors that you are qualified and competent to start and run a business. The market research should be included in the appendix as a supporting document for your claims within the business plan.

Market research is an important step in starting any new business. By researching the target customer, the market, and the competition, you will be able to create a well-informed business plan that will help you to start and run a successful enterprise.  

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Conducting market research is an essential step in starting a new business. By following the steps outlined in this article, you will be able to gather the information you need to make informed decisions about your product or service.

Some businesses may be tempted to conduct research themselves as opposed to hiring outside agencies. However, that is not to say that there are no businesses that should conduct their own market research. Instead, it all depends on the type of business and who makes up your target audience.

All businesses need to take an active interest in understanding their target customers and how they behave so they can provide products or services that will best suit their needs. Market research will help you to understand your customers and the market that they operate in.

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How To Write a Business Plan

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Starting a business is a wild ride, and a solid business plan can be the key to keeping you on track. A business plan is essentially a roadmap for your business — outlining your goals, strategies, market analysis and financial projections. Not only will it guide your decision-making, a business plan can help you secure funding with a loan or from investors .

Writing a business plan can seem like a huge task, but taking it one step at a time can break the plan down into manageable milestones. Here is our step-by-step guide on how to write a business plan.

Table of contents

• Write your executive summary
• Do your market research homework
• Set your business goals and objectives
• Plan your business strategy
• Describe your product or service
• Crunch the numbers
• Finalize your business plan

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Step 1: Write your executive summary

Though this will be the first page of your business plan , we recommend you actually write the executive summary last. That’s because an executive summary highlights what’s to come in the business plan but in a more condensed fashion.

An executive summary gives stakeholders who are reading your business plan the key points quickly without having to comb through pages and pages. Be sure to cover each successive point in a concise manner, and include as much data as necessary to support your claims.

You’ll cover other things too, but answer these basic questions in your executive summary:

• Idea: What’s your business concept? What problem does your business solve? What are your business goals?
• Product: What’s your product/service and how is it different?
• Market: Who’s your audience? How will you reach customers?
• Finance: How much will your idea cost? And if you’re seeking funding, how much money do you need? How much do you expect to earn? If you’ve already started, where is your revenue at now?

Step 2: Do your market research homework

The next step in writing a business plan is to conduct market research . This involves gathering information about your target market (or customer persona), your competition, and the industry as a whole. You can use a variety of research methods such as surveys, focus groups, and online research to gather this information. Your method may be formal or more casual, just make sure that you’re getting good data back.

This research will help you to understand the needs of your target market and the potential demand for your product or service—essential aspects of starting and growing a successful business.

Step 3: Set your business goals and objectives

Once you’ve completed your market research, you can begin to define your business goals and objectives. What is the problem you want to solve? What’s your vision for the future? Where do you want to be in a year from now?

Use this step to decide what you want to achieve with your business, both in the short and long term. Try to set SMART goals—specific, measurable, achievable, relevant, and time-bound benchmarks—that will help you to stay focused and motivated as you build your business.

Step 4: Plan your business strategy

Your business strategy is how you plan to reach your goals and objectives. This includes details on positioning your product or service, marketing and sales strategies, operational plans, and the organizational structure of your small business.

Make sure to include key roles and responsibilities for each team member if you’re in a business entity with multiple people.

Step 5: Describe your product or service

In this section, get into the nitty-gritty of your product or service. Go into depth regarding the features, benefits, target market, and any patents or proprietary tech you have. Make sure to paint a clear picture of what sets your product apart from the competition—and don’t forget to highlight any customer benefits.

Step 6: Crunch the numbers

Financial analysis is an essential part of your business plan. If you’re already in business that includes your profit and loss statement , cash flow statement and balance sheet .

These financial projections will give investors and lenders an understanding of the financial health of your business and the potential return on investment.

You may want to work with a financial professional to ensure your financial projections are realistic and accurate.

Step 7: Finalize your business plan

Once you’ve completed everything, it's time to finalize your business plan. This involves reviewing and editing your plan to ensure that it is clear, concise, and easy to understand.

You should also have someone else review your plan to get a fresh perspective and identify any areas that may need improvement. You could even work with a free SCORE mentor on your business plan or use a SCORE business plan template for more detailed guidance.

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The takeaway

Writing a business plan is an essential process for any forward-thinking entrepreneur or business owner. A business plan requires a lot of up-front research, planning, and attention to detail, but it’s worthwhile. Creating a comprehensive business plan can help you achieve your business goals and secure the funding you need.

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Start » startup, 3 easy steps to research your startup business idea.

After you choose a business idea to pursue, your next step is researching it. Here’s how to do it right.

Starting a new business is an exciting venture with limitless opportunities. However, if you’ve decided to take the leap into entrepreneurship, you’ll need to do your homework before you hit the ground running.

After choosing a business idea, the first step to starting a new business is researching that idea. You'll want to know if there is a demand for your potential product or service, as well as the type of competition you'll be up against. Doing this work can help you anticipate and counter any potential issues, giving your business the best possible chance of success.

Here are three simple steps to jumpstart your business idea research.

[Read: 5 Expert Business-Planning Strategies to Help You Reach Your Goals ]

Develop a market research plan

Conducting market research can help you determine who your target audience is and how to reach them effectively, as well as how your product or service uniquely solves a problem that audience is facing.

There are two main types of market research: primary and secondary. Primary research refers to any information that comes directly from your audience, such as focus groups, surveys and interviews. This can help you understand your potential customers’ habits, preferences and needs, so you can cater your offerings accordingly.

Secondary market research comes from the public or outside sources. These may include public sources like government statistics, commercial sources like market reports and internal sources like your company’s own marketing data. You can use this information to identify trends and patterns, allowing you to target your marketing.

When conducting market research, consider where your target audience spends time, then invest your efforts on those platforms. For example, if your ideal customer isn’t typically a big social media user, reaching out to people on Instagram might not be the best use of your time.

Conducting market research can help you determine who your target audience is and how to reach them effectively.

Study your competitors

Once you’ve gained an understanding of your audience, you’ll also need to gain an understanding of your competition. Competitive research involves identifying your competitors and identifying their strengths and weaknesses. This not only helps you see how your own business idea compares (and where you may need to make adjustments), it also provides valuable insights regarding industry trends.

Your first step is to identify your business’s main competitors, which can be done by simply searching your product or service category online. Competitors can be divided into direct and indirect: Direct competitors are targeting your same audience with a similar product or service, while indirect competitors may have slight variations in their product/service or target audience. Researching both can help you discover areas of growth for your own business, while also mitigating any potential threats to your business’s success.

Once you’ve found your main competitors, analyze their online presence by reviewing their websites, blogs and social media pages. You may even consider signing up for their email lists and following their social media profiles to get an idea of how they communicate. Finally, track your findings and use the information to fine-tune your business idea and its offerings.

[Read: Need Some Feedback? How to Conduct Customer Interviews and Focus Groups ]

Conduct a SWOT analysis

A SWOT analysis helps you objectively evaluate both internal and external factors that could impact your business. SWOT stands for strengths, weaknesses, opportunities and threats. Take time to brainstorm what your business does well, where your business can improve, which opportunities your business can take advantage of and which external threats could have a negative impact.

Once you’ve completed your analysis, implement what you’ve learned by creating an actionable plan that will help you capitalize on your company’s strengths and minimize the impact of any weaknesses.

Finally, keep in mind that your initial business idea research is just the first step. Your product or service, your audience and the market may change over time. Conducting regular research and analyses of your business will give it the best opportunity for long-term success.

Stay tuned for our next Startup2021 article on doing a competitive analysis.

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How to Write a Business Plan: Target Market Analysis

The Business Plan and the Importance of Defining Your Target Market

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Conducting a Market Analysis

Polling your target market, writing the market analysis, online tools for market research, u.s. online market research sources, canadian online market research, local sources of market research, doing your own market research.

 Creative Commons CC0

The market analysis is basically the target market section of your business plan . It is a thorough examination of the ideal people to whom you intend to sell your products or services.  

Even if you intend on selling a product or service only in your community, you won't be selling that service to everyone who lives there. Knowing exactly what type(s) of people might be interested in buying your product or service and how many of them reside in your projected area or region is fundamental in creating your market analysis.

Once target market data has been established, you'll also work on sales projections within specific time frames, as well as how prospective sales might be affected by trends and policies.

Research is key and cornerstone of any solid  business plan .

Don't Skip This Step!

Don't skip market research; otherwise, you could end up starting a business that doesn't have a paying market.

Use these general terms as linchpins in research data for the market analysis section of your business plan, and to identify your target market:

But don't stop here. To succinctly define your target market, poll or survey members of your prospective clients or customers to ask specific questions directly related to your products or services. For instance, if you plan to sell computer-related services, ask questions relating to the number of computing devices your prospective customers own and how often they require servicing. If you plan on selling garden furniture and accessories, ask what kinds of garden furniture or accessories your potential customers have bought in the past, how often, and what they expect to buy within the next one, three, and five years.

Answers to these and other questions related to your market are to help you understand your market potential.

The goal of the information you collect is to help you project how much of your product or service you'll be able to sell. Review these important questions you need to try to answer using the data you collect:

• What proportion of your target market has used a product similar to yours before?
• How much of your product or service might your target market buy? (Estimate this in gross sales and/or in units of product/service sold.)
• What proportion of your target market might be repeat customers?
• How might your target market be affected by demographic shifts?
• How might your target market be affected by economic events (e.g. a local mill closing or a big-box retailer opening locally)?
• How might your target market be affected by larger socio-economic trends?
• How might your target market be affected by government policies (e.g. new bylaws or changes in taxes)?

One purpose of the market analysis is to ensure you have a viable business idea.

Find Your Buying Market

Use your market research to make sure people don't just like your business idea, but they're also willing to pay for it.

If you have information suggesting that you have a large enough market to sustain your business goals, write the market analysis in the form of several short paragraphs using appropriate headings for each. If you have several target markets, you may want to number each. 

Sections of your market analysis should include:

• Industry Description and Outlook
• Target Market
• Market Research Results
• Competitive Analysis

Remember to properly cite your sources of information within the body of your market analysis as you write it. You and other readers of your business plan, such as potential investors, will need to know the sources of the statistics or opinions that you've gathered.

There are several online resources to learn if your business idea is something worth pursing, including:

• Keyword searches can give you an overall sense of potential demand for your product or service based on the number of searches.
• Google Trends analysis can tell you how the number of searches has changed over time.
• Social media campaigns can give you an indication of the potential customer interest in your business idea.

The U.S. Small Business Administration (SBA) has information on doing your market research and analysis , as well as a list of free small business data and trends resources you can use to conduct your research. Consider these sources for data collection:

• SBA  Business Data and Statistics  
• The U.S. Census Bureau maintains a huge database of demographic information that is searchable by state, county, city/town, or zip code using its census data tool . Community, housing, economic, and population surveys are also available.
• The U.S. Department of Commerce Bureau of Economic Analysis (BEA) has extensive statistics on the economy including consumer income/spending/consumption, business activity, GDP, and more, all of which are searchable by location.

The Government of Canada offers a guide on doing market research and tips for understanding the data you collect. Canadian data resources include:

• Statistics Canada  offers demographic and economic data.
• The  Business Development Bank of Canada (BDC)  offers market research and consulting with industry experts.
• The Canada Business Network provides business information to entrepreneurs by province/territory, including market research data.

There are also a great many local resources for building target market information to explore, including:

• Local library
• Local Chamber of Commerce
• Board of Trade
• Economic Development Centre
• Local government agent's office
• Provincial business ministry
• Local phone book

All of these will have information helpful in defining your target market and providing insights into trends.

The above resources are secondary sources of information, in which others have collected and compiled the data. To get specific information about your business, consider conducting your own market research . For instance, you might want to design a questionnaire and survey your target market to learn more about their habits and preferences relating to your product or service.

Market research is time-consuming but is an important step in affording your business plan validity. If you don't have the time or the research skills to thoroughly define your target market yourself, hiring a person or firm to do the research for you can be a wise investment.​

Small Business Administration. " Market Research and Competitive Analysis. " Accessed Jan. 13, 2020.

How to write a research plan: Step-by-step guide

Last updated

30 January 2024

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Today’s businesses and institutions rely on data and analytics to inform their product and service decisions. These metrics influence how organizations stay competitive and inspire innovation. However, gathering data and insights requires carefully constructed research, and every research project needs a roadmap. This is where a research plan comes into play.

Read this step-by-step guide for writing a detailed research plan that can apply to any project, whether it’s scientific, educational, or business-related.

• What is a research plan?

A research plan is a documented overview of a project in its entirety, from end to end. It details the research efforts, participants, and methods needed, along with any anticipated results. It also outlines the project’s goals and mission, creating layers of steps to achieve those goals within a specified timeline.

Without a research plan, you and your team are flying blind, potentially wasting time and resources to pursue research without structured guidance.

The principal investigator, or PI, is responsible for facilitating the research oversight. They will create the research plan and inform team members and stakeholders of every detail relating to the project. The PI will also use the research plan to inform decision-making throughout the project.

• Why do you need a research plan?

Create a research plan before starting any official research to maximize every effort in pursuing and collecting the research data. Crucially, the plan will model the activities needed at each phase of the research project .

Like any roadmap, a research plan serves as a valuable tool providing direction for those involved in the project—both internally and externally. It will keep you and your immediate team organized and task-focused while also providing necessary definitions and timelines so you can execute your project initiatives with full understanding and transparency.

External stakeholders appreciate a working research plan because it’s a great communication tool, documenting progress and changing dynamics as they arise. Any participants of your planned research sessions will be informed about the purpose of your study, while the exercises will be based on the key messaging outlined in the official plan.

Here are some of the benefits of creating a research plan document for every project:

Project organization and structure

Well-informed participants

All stakeholders and teams align in support of the project

Clearly defined project definitions and purposes

Distractions are eliminated, prioritizing task focus

Timely management of individual task schedules and roles

Costly reworks are avoided

• What should a research plan include?

The different aspects of your research plan will depend on the nature of the project. However, most official research plan documents will include the core elements below. Each aims to define the problem statement , devising an official plan for seeking a solution.

Specific project goals and individual objectives

Ideal strategies or methods for reaching those goals

Required resources

Descriptions of the target audience, sample sizes , demographics, and scopes

Key performance indicators (KPIs)

Project background

Research and testing support

Preliminary studies and progress reporting mechanisms

Cost estimates and change order processes

Depending on the research project’s size and scope, your research plan could be brief—perhaps only a few pages of documented plans. Alternatively, it could be a fully comprehensive report. Either way, it’s an essential first step in dictating your project’s facilitation in the most efficient and effective way.

• How to write a research plan for your project

When you start writing your research plan, aim to be detailed about each step, requirement, and idea. The more time you spend curating your research plan, the more precise your research execution efforts will be.

Account for every potential scenario, and be sure to address each and every aspect of the research.

Consider following this flow to develop a great research plan for your project:

Define your project’s purpose

Start by defining your project’s purpose. Identify what your project aims to accomplish and what you are researching. Remember to use clear language.

Thinking about the project’s purpose will help you set realistic goals and inform how you divide tasks and assign responsibilities. These individual tasks will be your stepping stones to reach your overarching goal.

Additionally, you’ll want to identify the specific problem, the usability metrics needed, and the intended solutions.

Know the following three things about your project’s purpose before you outline anything else:

What you’re doing

Why you’re doing it

What you expect from it

Identify individual objectives

With your overarching project objectives in place, you can identify any individual goals or steps needed to reach those objectives. Break them down into phases or steps. You can work backward from the project goal and identify every process required to facilitate it.

Be mindful to identify each unique task so that you can assign responsibilities to various team members. At this point in your research plan development, you’ll also want to assign priority to those smaller, more manageable steps and phases that require more immediate or dedicated attention.

Select research methods

Once you have outlined your goals, objectives, steps, and tasks, it’s time to drill down on selecting research methods . You’ll want to leverage specific research strategies and processes. When you know what methods will help you reach your goals, you and your teams will have direction to perform and execute your assigned tasks.

Research methods might include any of the following:

User interviews : this is a qualitative research method where researchers engage with participants in one-on-one or group conversations. The aim is to gather insights into their experiences, preferences, and opinions to uncover patterns, trends, and data.

Field studies : this approach allows for a contextual understanding of behaviors, interactions, and processes in real-world settings. It involves the researcher immersing themselves in the field, conducting observations, interviews, or experiments to gather in-depth insights.

Card sorting : participants categorize information by sorting content cards into groups based on their perceived similarities. You might use this process to gain insights into participants’ mental models and preferences when navigating or organizing information on websites, apps, or other systems.

Focus groups : use organized discussions among select groups of participants to provide relevant views and experiences about a particular topic.

Diary studies : ask participants to record their experiences, thoughts, and activities in a diary over a specified period. This method provides a deeper understanding of user experiences, uncovers patterns, and identifies areas for improvement.

Five-second testing: participants are shown a design, such as a web page or interface, for just five seconds. They then answer questions about their initial impressions and recall, allowing you to evaluate the design’s effectiveness.

Surveys : get feedback from participant groups with structured surveys. You can use online forms, telephone interviews, or paper questionnaires to reveal trends, patterns, and correlations.

Tree testing : tree testing involves researching web assets through the lens of findability and navigability. Participants are given a textual representation of the site’s hierarchy (the “tree”) and asked to locate specific information or complete tasks by selecting paths.

Usability testing : ask participants to interact with a product, website, or application to evaluate its ease of use. This method enables you to uncover areas for improvement in digital key feature functionality by observing participants using the product.

Live website testing: research and collect analytics that outlines the design, usability, and performance efficiencies of a website in real time.

There are no limits to the number of research methods you could use within your project. Just make sure your research methods help you determine the following:

What do you plan to do with the research findings?

What decisions will this research inform? How can your stakeholders leverage the research data and results?

Recruit participants and allocate tasks

Next, identify the participants needed to complete the research and the resources required to complete the tasks. Different people will be proficient at different tasks, and having a task allocation plan will allow everything to run smoothly.

Prepare a thorough project summary

Every well-designed research plan will feature a project summary. This official summary will guide your research alongside its communications or messaging. You’ll use the summary while recruiting participants and during stakeholder meetings. It can also be useful when conducting field studies.

Ensure this summary includes all the elements of your research project . Separate the steps into an easily explainable piece of text that includes the following:

An introduction: the message you’ll deliver to participants about the interview, pre-planned questioning, and testing tasks.

Interview questions: prepare questions you intend to ask participants as part of your research study, guiding the sessions from start to finish.

An exit message: draft messaging your teams will use to conclude testing or survey sessions. These should include the next steps and express gratitude for the participant’s time.

Create a realistic timeline

While your project might already have a deadline or a results timeline in place, you’ll need to consider the time needed to execute it effectively.

Realistically outline the time needed to properly execute each supporting phase of research and implementation. And, as you evaluate the necessary schedules, be sure to include additional time for achieving each milestone in case any changes or unexpected delays arise.

For this part of your research plan, you might find it helpful to create visuals to ensure your research team and stakeholders fully understand the information.

Determine how to present your results

A research plan must also describe how you intend to present your results. Depending on the nature of your project and its goals, you might dedicate one team member (the PI) or assume responsibility for communicating the findings yourself.

In this part of the research plan, you’ll articulate how you’ll share the results. Detail any materials you’ll use, such as:

Presentations and slides

A project report booklet

A project findings pamphlet

Documents with key takeaways and statistics

Graphic visuals to support your findings

• Format your research plan

As you create your research plan, you can enjoy a little creative freedom. A plan can assume many forms, so format it how you see fit. Determine the best layout based on your specific project, intended communications, and the preferences of your teams and stakeholders.

Find format inspiration among the following layouts:

Written outlines

Narrative storytelling

Visual mapping

Graphic timelines

Remember, the research plan format you choose will be subject to change and adaptation as your research and findings unfold. However, your final format should ideally outline questions, problems, opportunities, and expectations.

• Research plan example

Imagine you’ve been tasked with finding out how to get more customers to order takeout from an online food delivery platform. The goal is to improve satisfaction and retain existing customers. You set out to discover why more people aren’t ordering and what it is they do want to order or experience. 

You identify the need for a research project that helps you understand what drives customer loyalty . But before you jump in and start calling past customers, you need to develop a research plan—the roadmap that provides focus, clarity, and realistic details to the project.

Here’s an example outline of a research plan you might put together:

Project title

Project members involved in the research plan

Purpose of the project (provide a summary of the research plan’s intent)

Objective 1 (provide a short description for each objective)

Objective 2

Objective 3

Proposed timeline

Audience (detail the group you want to research, such as customers or non-customers)

Budget (how much you think it might cost to do the research)

Risk factors/contingencies (any potential risk factors that may impact the project’s success)

Remember, your research plan doesn’t have to reinvent the wheel—it just needs to fit your project’s unique needs and aims.

Customizing a research plan template

Some companies offer research plan templates to help get you started. However, it may make more sense to develop your own customized plan template. Be sure to include the core elements of a great research plan with your template layout, including the following:

Introductions to participants and stakeholders

Background problems and needs statement

Significance, ethics, and purpose

Research methods, questions, and designs

Preliminary beliefs and expectations

Implications and intended outcomes

Realistic timelines for each phase

Conclusion and presentations

How many pages should a research plan be?

Generally, a research plan can vary in length between 500 to 1,500 words. This is roughly three pages of content. More substantial projects will be 2,000 to 3,500 words, taking up four to seven pages of planning documents.

What is the difference between a research plan and a research proposal?

A research plan is a roadmap to success for research teams. A research proposal, on the other hand, is a dissertation aimed at convincing or earning the support of others. Both are relevant in creating a guide to follow to complete a project goal.

What are the seven steps to developing a research plan?

While each research project is different, it’s best to follow these seven general steps to create your research plan:

Defining the problem

Identifying goals

Choosing research methods

Recruiting participants

Preparing the brief or summary

Establishing task timelines

Defining how you will present the findings

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Do You Need a Business Plan? Scientific Research Says Yes

Noah Parsons

13 min. read

Updated May 10, 2024

Should you spend some time developing a plan for your business, or just dive in and start, figuring things out as you go? There has been plenty of debate on this topic, but no one has pulled together the scientific evidence to determine if planning is worthwhile—until now .

With the help of my friend Jeff, from the University of Oregon, I’ve been looking at academic research on business planning—the actual science around planning and how it impacts both startups and existing businesses.

But, before we dive into the data, why do we even need to look at research on business planning? It seems like most advice on  starting a business  includes writing a business plan as a necessary step in the startup process. If so many people encourage you to write one, business plans must add value, right?

Well, over the past few years, there’s been a lot of controversy about the value of business plans. People look at certain companies that have been very successful but haven’t written business plans and conclude that planning is a waste of time.

After all, taking the time to plan is a bit of a trade-off. The time you spend planning could be time spent building your company. Why not just “get going” and learn as you build your company, instead of taking the time to formulate a strategy and understand your assumptions about how your business might grow?

Well, the research shows that it’s really not a “write a plan” or “don’t write a plan” conversation. What really  matters is what kind of planning you do  and how much time you spend doing it.

• Planning can help companies grow 30 percent faster

One study (1) published in 2010 aggregated research on the business growth of 11,046 companies and found that  planning improved business performance . Interestingly, this same study found that planning benefited existing companies even more than it benefited startups.

But, this study still doesn’t answer the question it raises:

Why would planning help a business that has a few years of history more than one that is just starting up?

The answer most likely lies in the fact that existing businesses know a bit more about their customers and what their needs are than a new startup does. For an existing business, planning involves fewer guesses or assumptions that need to be proven, so the strategies they develop are based on more information.

Another study (2) found that  companies that plan grow 30 percent faster  than those that don’t plan. This study found that plenty of businesses can find success without planning, but that businesses with a plan grew faster and were more successful than those that didn’t plan.

To reinforce the connection between planning and fast growth, yet another study (3) found that fast-growing companies—companies that had over 92 percent growth in sales from one year to the next—usually have business plans. In fact,  71 percent of fast-growing companies have plans . They create budgets, set sales goals, and document their marketing and sales strategies. These companies don’t always call their plans “business plans” but instead often refer to things like strategic plans, growth plans, and operational plans. Regardless of the name, it’s all forward-looking planning.

Action:  Carve out some time to set goals and build a plan for your business. More importantly,  re-visit your plan as you grow  and revise it as you learn more about your business and your customers.

Business planning is not an activity you undertake only when you’re getting your business up and running. It should be something you return to, time and time again, to revise and improve upon based on new knowledge.

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• The quality of the plan matters

But, it’s not as simple as it might appear. Just having a plan doesn’t guarantee faster growth.  It’s the kind of plan you have and how you use it that really matters .

It turns out that startups, especially ones building highly innovative businesses, should create shorter, less detailed plans (4). That’s because these innovative startups are learning new things about their product and customers at a very fast pace and their strategies change more frequently. Simpler plans get updated more frequently and are more helpful to these companies because they can review their strategy at a glance.

Meanwhile, more established companies know a lot more about their products and customers and can craft more detailed strategies that are less likely to change as quickly. For these companies, more detailed planning is generally more helpful.

And it’s not just the size of the plan that matters. What you include in your plan is important as well.

The same study we talked about above—the one that found that businesses grow faster with a plan—also found that companies that did a good job defining their  value proposition  do even better than companies that have a hard time defining their customers’ needs.

These researchers also found that  having a plan is less about accurately predicting the future, and more about setting regular goals, tracking your actual progress toward those goals and making changes to your business as you learn more about your customers.  Silicon Valley businesses like to call the act of changing strategic direction “pivoting.” All it really means is that you need to stay nimble, keep your eyes open, and be willing to make changes in your business as you compare your actual results to your goals and gather additional feedback from your customers.

Action:  Skip the 40-page business plan and instead focus on simpler planning that defines your goals and documents your customers’ needs. Adjust your plan frequently as you learn more about your business.

Being prepared matters when you’re seeking funding

Over and over again, you hear venture capitalists talk about how much the team matters in a funding decision. Beyond just the team, you also hear them talk about passion—how much the entrepreneur believes in the idea.

But, it turns out that there is something that trumps passion when VCs make their decisions. Research shows (5) that how well an entrepreneur is prepared is much more important than how much passion they have.

This doesn’t mean that VCs will ask for a business plan. In fact, they probably won’t ask for one.

What it means is that entrepreneurs need to have done some planning, in some form, so that they can be prepared to talk intelligently about their idea, their target market, their sales and marketing strategies, and so on.

So, the formal 40-page business plan document may not be useful when you’re pitching VCs. But, you’d better have done some planning, so that you can communicate verbally or through a  pitch deck  what would normally have been found in that written document.

And, not only will business planning help you be more prepared, it will actually improve your chances of getting funded. A study at the University of Oregon (6) found that  businesses with a plan were far more likely to get funding than those that didn’t have a plan .

Action:  Know your business inside and out. Document your strategy in an internal document, but skip all the time and effort creating a well-crafted business plan document.

When you start planning is important—the earlier the better

So, if business planning increases your likelihood of success, and in fact helps you grow faster, when should you start working on a business plan?

Research shows (7) that entrepreneurs who started the business planning process early were better at what the scientists call “establishing legitimacy.” That’s a fancy way of saying that these entrepreneurs used business planning to start the process of talking with potential customers, working with business partners, starting to look for funding, and gathering other information they needed to start their business.

Entrepreneurs that did a good job of using their business plan to “establish legitimacy” early were more likely to succeed and their businesses tended to last longer.

Not only that,  starting the planning process before starting marketing efforts and before talking to customers reduces the likelihood that a business will fail ( 8). 

That said, planning should never take the place of talking to customers. An ongoing planning process—one in which the plan is constantly revised as new information is gathered—requires that you talk to your potential customers so that you can learn more about what they need, what they are willing to pay, and how you can best reach them.

Action:  Start the planning process early. Even if all you do is build out a simple  elevator pitch  to try your idea on for size, it will help you begin the conversation with potential customers and kick-start your business.

• Planning makes you more likely to start your business

If you’re like me, and like most entrepreneurs, you like to dream up new business ideas. You constantly think of new ways to improve existing businesses and solve new problems.

But, most of those dreams never become a reality. They live on as ideas in your head while other entrepreneurs see the same opportunity and find a way to make it happen.

It turns out that there’s a way to turn more of your ideas into a viable business. A study published in  Small Business Economics  found that  entrepreneurs that take the time to create a plan for their business idea are 152 percent more likely to start their business ( 9). Not only that, those entrepreneurs with a plan are 129 percent more likely to push forward with their business beyond the initial startup phase and grow it. These findings are confirmed by another study that found that entrepreneurs with a plan are 260 percent more likely to start their businesses (10). 

Interestingly,  these same entrepreneurs who build plans are 271 percent more likely to close down a business . This seems counterintuitive to the stats above, but when you think about it a bit more, it makes a lot of sense.

Entrepreneurs with plans are tracking their performance on a regular basis. They know when things aren’t going to plan—when sales aren’t meeting projections and when marketing strategies are failing. They know when it’s time to walk away and try a different idea instead of riding the business into the ground, which could have disastrous results.

Action:  If you really want to start a business, start committing your goals and strategy to paper. Even if it’s just a simple  one-page business plan,  that will help you get started faster. And, once you do start, track your performance so you know when to change direction and try something different.

You’re less likely to fail if you have a plan

Nothing can absolutely prevent your company from failing, but it turns out that having a plan can help reduce your risks.

Yet another study of 223 companies found that having a plan reduced the likelihood that a business would fail. Having a plan didn’t guarantee success, unfortunately. But, those companies with a plan had better chances of success than those that skipped the planning process.

Having a plan and updating it regularly means that you are tracking your performance and making adjustments as you go. If things aren’t working, you know it. And, if things are going well, you know what to do more of.

Action:  Build a plan, but don’t just stick it in a drawer. Track your performance as you go so you can see if you’re reaching your goals. Your plan will help you discover what’s working so you can build your business.

• Your success depends on the type of planning you do

In the end, creating a business plan seems like common sense. You wouldn’t set out on a trip without a destination and a map, would you?

It’s great to see research back up these common-sense assumptions. The research also validates the idea that the value of business planning really depends on how you approach it.

It’s not a question of whether you should plan or not plan—it’s what kind of planning you do.  The best planning is iterative; it’s kept alive and it adapts.

It’s not about predicting the future as if you’re a fortune teller at a carnival. Instead, it’s a tool that you use to refine and adapt your strategy as you go, continuing to understand your market as it changes and refining your business to the ever-changing needs of your customers.

I recommend starting with a one-page plan. It’s a simpler form of planning where you can start by documenting your business concept on a single page. From there, iterate, gather feedback, and adjust your plan as needed. If you need some inspiration, check out our gallery of over  550 free sample business plans .

Finally, a big “thank you” to  Jeff Gish at the University of Oregon , who was immensely helpful in gathering and analyzing the research mentioned in this article.

What has your experience with business planning been like? Will you approach the planning process differently in the future? Tell me on Twitter @noahparsons.

References:

1 Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan or just storm the castle? A meta-analysis on contextual factors impacting the business planning–performance relationship in small firms.  Journal of Business Venturing,  25(1), 24-40. doi: 10.1016/j.jbusvent.2008.10.007

2 Burke, A., Fraser, S., & Greene, F. J. (2010). The multiple effects of business planning on new venture performance.  Journal of Management Studies,  47(3), 391-415.

3 Upton, N., Teal, E. J., & Felan, J. T. (2001). Strategic and business planning practices of fast growth family firms.  Journal of Small Business Management, 39(1), 60-72.

4 Gruber, M. (2007). Uncovering the value of planning in new venture creation: A process and contingency perspective.  Journal of Business Venturing,  22(6), 782-807. doi: 10.1016/j.jbusvent.2006.07.001

5 Chen, X.-P., Yao, X., & Kotha, S. (2009). Entrepreneur passion and preparedness in business plan presentations: A persuasion analysis of venture capitalists’ funding decisions.  Academy of Management Journal,  52(1), 199-214.

6 Ding, E., & Hursey, T. (2010). Evaluation of the effectiveness of business planning using Palo Alto’s Business Plan Pro. Department of Economics. University of Oregon.

7 Delmar, F., & Shane, S. (2004). Legitimating first: Organizing activities and the survival of new ventures.  Journal of Business Venturing,  19(3), 385-410. doi: 10.1016/s0883-9026(03)00037-5

8 Shane, S., & Delmar, F. (2004). Planning for the market: Business planning before marketing and the continuation of organizing efforts.  Journal of Business Venturing,  19(6), 767-785. doi: 10.1016/j.jbusvent.2003.11.001

9 Hechavarria, D. M., Renko, M., & Matthews, C. H. (2011). The nascent entrepreneurship hub: Goals, entrepreneurial self-efficacy and start-up outcomes.  Small Business Economics,  39(3), 685-701. doi: 10.1007/s11187-011-9355-2

10 Liao, J., & Gartner, W. B. (2006). The effects of pre-venture plan timing and perceived environmental uncertainty on the persistence of emerging firms.  Small Business Economics,  27(1), 23-40. doi: 10.1007/s11187-006-0020-0

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Being prepared matters when you’re seeking funding
• When you start planning is important—the earlier the better
• You’re less likely to fail if you have a plan

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How to Write a Business Plan: Your Step-by-Step Guide

So, you’ve got an idea and you want to start a business —great! Before you do anything else, like seek funding or build out a team, you'll need to know how to write a business plan. This plan will serve as the foundation of your company while also giving investors and future employees a clear idea of your purpose.

Below, Lauren Cobello, Founder and CEO of Leverage with Media PR , gives her best advice on how to make a business plan for your company.

Build your dream business with the help of a high-paying job—browse open jobs on The Muse »

What is a business plan, and when do you need one?

According to Cobello, a business plan is a document that contains the mission of the business and a brief overview of it, as well as the objectives, strategies, and financial plans of the founder. A business plan comes into play very early on in the process of starting a company—more or less before you do anything else.

“You should start a company with a business plan in mind—especially if you plan to get funding for the company,” Cobello says. “You’re going to need it.”

Whether that funding comes from a loan, an investor, or crowdsourcing, a business plan is imperative to secure the capital, says the U.S. Small Business Administration . Anyone who’s considering giving you money is going to want to review your business plan before doing so. That means before you head into any meeting, make sure you have physical copies of your business plan to share.

Different types of business plans

The four main types of business plans are:

Startup Business Plans

Internal business plans, strategic business plans, one-page business plans.

Let's break down each one:

If you're wondering how to write a business plan for a startup, Cobello has advice for you. Startup business plans are the most common type, she says, and they are a critical tool for new business ventures that want funding. A startup is defined as a company that’s in its first stages of operations, founded by an entrepreneur who has a product or service idea.

Most startups begin with very little money, so they need a strong business plan to convince family, friends, banks, and/or venture capitalists to invest in the new company.

Internal business plans “are for internal use only,” says Cobello. This kind of document is not public-facing, only company-facing, and it contains an outline of the company’s business strategy, financial goals and budgets, and performance data.

Internal business plans aren’t used to secure funding, but rather to set goals and get everyone working there tracking towards them.

As the name implies, strategic business plans are geared more towards strategy and they include an assessment of the current business landscape, notes Jérôme Côté, a Business Advisor at BDC Advisory Services .

Unlike a traditional business plan, Cobello adds, strategic plans include a SWOT analysis (which stands for strengths, weaknesses, opportunities, and threats) and an in-depth action plan for the next six to 12 months. Strategic plans are action-based and take into account the state of the company and the industry in which it exists.

Although a typical business plan falls between 15 to 30 pages, some companies opt for the much shorter One-Page Business Plan. A one-page business plan is a simplified version of the larger business plan, and it focuses on the problem your product or service is solving, the solution (your product), and your business model (how you’ll make money).

A one-page plan is hyper-direct and easy to read, making it an effective tool for businesses of all sizes, at any stage.

How to create a business plan in 7 steps

Every business plan is different, and the steps you take to complete yours will depend on what type and format you choose. That said, if you need a place to start and appreciate a roadmap, here’s what Cobello recommends:

1. Conduct your research

Before writing your business plan, you’ll want to do a thorough investigation of what’s out there. Who will be the competitors for your product or service? Who is included in the target market? What industry trends are you capitalizing on, or rebuking? You want to figure out where you sit in the market and what your company’s value propositions are. What makes you different—and better?

2. Define your purpose for the business plan

The purpose of your business plan will determine which kind of plan you choose to create. Are you trying to drum up funding, or get the company employees focused on specific goals? (For the former, you’d want a startup business plan, while an internal plan would satisfy the latter.) Also, consider your audience. An investment firm that sees hundreds of potential business plans a day may prefer to see a one-pager upfront and, if they’re interested, a longer plan later.

3. Write your company description

Every business plan needs a company description—aka a summary of the company’s purpose, what they do/offer, and what makes it unique. Company descriptions should be clear and concise, avoiding the use of jargon, Cobello says. Ideally, descriptions should be a few paragraphs at most.

4. Explain and show how the company will make money

A business plan should be centered around the company’s goals, and it should clearly explain how the company will generate revenue. To do this, Cobello recommends using actual numbers and details, as opposed to just projections.

For instance, if the company is already making money, show how much and at what cost (e.g. what was the net profit). If it hasn’t generated revenue yet, outline the plan for how it will—including what the product/service will cost to produce and how much it will cost the consumer.

5. Outline your marketing strategy

How will you promote the business? Through what channels will you be promoting it? How are you going to reach and appeal to your target market? The more specific and thorough you can be with your plans here, the better, Cobello says.

6. Explain how you’ll spend your funding

What will you do with the money you raise? What are the first steps you plan to take? As a founder, you want to instill confidence in your investors and show them that the instant you receive their money, you’ll be taking smart actions that grow the company.

7. Include supporting documents

Creating a business plan is in some ways akin to building a legal case, but for your business. “You want to tell a story, and to be as thorough as possible, while keeping your plan succinct, clear, interesting, and visually appealing,” Cobello says. “Supporting documents could include financial projects, a competitive analysis of the market you’re entering into, and even any licenses, patents, or permits you’ve secured.”

A business plan is an individualized document—it’s ultimately up to you what information to include and what story you tell. But above all, Cobello says, your business plan should have a clear focus and goal in mind, because everything else will build off this cornerstone.

“Many people don’t realize how important business plans are for the health of their company,” she says. “Set aside time to make this a priority for your business, and make sure to keep it updated as you grow.”

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• June 24, 2024

Find yourself staring at the blank screen while writing your business plan? Well, every entrepreneur feels that once in their business journey. This is where a business plan consultant comes into the picture.

Think of a business plan consultant as your strategic partner who helps you craft the plan and create strategies that help you with funding.

But the tricky part is: How do you choose the right business plan consultant? Because there are a lot of options that will confuse you.

Worry not, here are the tips for choosing the right business plan consultant through which you can examine and select the right one for your business.

But before that let us understand why it’s important to hire a consultant.

Why do I need a business plan consultant?

A business plan consultant works closely with you and understands your business thoroughly. They help you achieve your goals like expanded market share, cost reduction, enhanced customer experience, and more.

Consultants have experience in various industries and expertise in fields like marketing, strategic planning, and more. So, having a consultant by your side will lead you to a successful business.

So, as we know why we need a business plan consultant, let’s move ahead to the tips.

8 Tips for choosing the right business plan consultant

Are you too facing the issues in choosing the right business plan consultant ? Well, there are many options online and offline for a consultant, so let’s see how to choose “the one” for your business:

1. Experience and expertise

First, look into which industries the business plan consultant has experience in. Also, consider their expertise, and see if it is relevant for your business.

Go for industry-specific experience, as this ensures familiarity with the unique problems and opportunities related to the industry.

Also, see if they have any successful track record in similar projects in the same industry. Lastly, review their portfolio for detailed strategic plans customized for a business like yours.

2. Check qualifications

Before finalizing the business plan consultant, ensure they have the qualifications that you’re looking for. Go for a solid educational background, such as degrees in business, finance, or related fields, which is necessary for your industry.

Also, check if the consultants have any additional training and memberships in any professional organizations.

3. Review ratings and feedback

Explore recommendations and reviews of the consultant, before you finalize them. If you have word-of-mouth referrals from other businesses then it is a plus, as they come authentically.

Also, scan online reviews and get to know about the consultant’s methodology. All of these combined act as evidence of the consultant’s past work, process, and credibility.

4. Consider compatibility

Look for a consultant who not only has the necessary skills and expertise but communicates effectively. A compatible consultant will be able to offer personalized advice that resonates with your vision, ultimately leading to a more successful output.

5. Verify their process

Understanding the approach of the consultant is essential to ensure a successful outcome. It’s important to verify that their process includes comprehensive research, data analysis, and a clear strategic plan.

Requesting a detailed outline of the process along with the expected timeline can help you understand their method and set clear expectations.

6. Discuss fees and contracts

Discussing fees and contracts before hiring a consultant maintains transparency. You need to clearly understand their fee structure and what it covers.

Apart from that, make sure the contract clearly states what you’ll get, when you’ll get the plan, and how much you’ll have. This clarity helps prevent misunderstandings and potential disputes later on.

7. Review sample plans

Request sample business plans from the consultant to evaluate their work. This will help you know their writing style, attention to detail, and overall professionalism.

By going through their past work, you can consider whether their process syncs with your expectations and requirements.

8. Know their knowledge

Here you should get to know about the consultant’s knowledge by asking certain specific questions from the industry like:

• How do you update yourself with all the industry changes and trends?
• Can you please explain a complex concept of the business and how you plan to apply the same in my business?
• What metrics or KPIs are the most important for you and which you will use for my business?

Also, look into if they can provide you with in-depth replies to your questions.

That’s it guys! I hope following the above tips will help you choose the right business plan consultant for your business.

But, if you don’t want to go to and for for your business plan, you can write it on your own with the help of a business planning software like Upmetrics .

This tool helps you with business planning, creating financial forecasts, strategic planning, and a lot more.

So, why not write your business plan on your own? Start planning today.

Sample Business Plan Library

Explore over 400 real-world business plan examples from a wide variety of industries.

One Page Business Plan Template

Use this simple one-page business plan template to immediately get started on your plan.

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Use this simple startup business plan template to immediately get started on your plan.

Frequently Asked Questions

Can a business plan consultant help with funding.

Yes, a business plan consultant helps you with writing engaging business plans which ultimately supports you in attracting investors and banks for funds.

How long does it take to complete a business plan?

It might take around weeks, months, or even more for a business plan consultant or a writer to create a business plan for your business. However, with the AI-powered business planning tool like Upmetrics, you can write your plan in days.

Should I pay someone to write my business plan?

Paying someone or not depends on your budget and requirements. But you can write your business plan professionally for just as low as $7 with Upmetrics.

What kind of information do I need to provide to the consultant?

You need to provide the history of your business, product or services, target market, competitors, marketing strategies, financial projections, operational details, legal requirements, and more—for them to understand your business.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How To Prepare a Business Plan for Government Contracting

A well-written business plan is key to success in the competitive government contracting industry. It is a roadmap that outlines a contractor’s experience, capabilities and expertise as an ideal partner in fulfilling government objectives.

Learn the basics of a great business plan for government contracting.

Table of Contents

What Is a Business Plan?

A business plan is a comprehensive document that details the contractor’s objectives, strategies and financial projections. It serves as a manual for growth, helping organizations secure funding, attract investors and obtain new business opportunities. 

Having a business plan provides an organization with a method method to operate objectively, evaluate the feasibility of a new business idea and increase the probability of success in government contracting. 

Selecting the Right Format for a Business Plan for Government Contracting

There’s no one-size-fits-all approach to creating a business plan for government contracting. The ideal format depends on the type of business and its specific needs and goals. 

Two standard formats dominate the business planning process: traditional and lean startup.

Traditional Business Plan

A traditional business plan format must be very detailed to explain the contractor’s capabilities, past performance and compliance history. Government agencies consider these factors necessary in selecting the right contractor.

• Widely used — The traditional business plan’s structured approach infuses detailed sections that account for all business components, making it best suited for a situation requiring thoroughness.
• Detailed analysis — This business plan type executes a thorough analysis, where every section must be critically examined. It is particularly beneficial for contracts requiring a robust track record and complex project management.
• Lengthy document — A traditional business plan is generally protracted, sometimes containing containing dozens after dozens of pages. This lengthy plan can prove advantageous when the level of information provided in the document increases the chances of winning a contract.
• Specific use cases — A traditional business plan is well-suited for large-scale projects or high-security contracts, where the ability to deliver according to rigorous specifications is necessary.

Lean Startup Business Plan

A lean startup business plan involves quickly testing and validating business ideas. This approach is commonly used by startups and early-stage companies to create a strategic roadmap. It focuses on identifying and testing key assumptions about the market, ensuring that resources are used efficiently for agile adaptation based on market feedback.

For example, lean startup principles were utilized in the creation of healthcare.gov, which was launched within just 90 days and at a significantly lower cost than typical federal government projects of a similar nature.

• Focus on essentials — A lean startup business plan prioritizes conciseness, emphasizing the most critical elements of the business strategy.
• Efficient approach — This format streamlines the planning process by focusing only on crucial information, allowing for a more efficient document creation process.
• Less common — While less prevalent than traditional plans, lean startups can be used by contractors seeking a concise and focused format. 

5 Helpful Tips for Preparing a Business Plan

1. Conduct Competitive Analysis and Market Research

Conducting market research and competitive analyses enables a contractor to identify specific targets and procurement needs of government agencies.

For example, contractors may need to analyze the contracts that the agency recently awarded to better understand the project scale, contract size and qualifications. With this information, they can tailor the business plan according to the agency’s requirements.

2. Showcase Capabilities and Accomplishments

A business plan must showcase a contractor’s capabilities and previous performance. It should detail the contractor’s contractor’s qualifications and expertise, focusing on certifications and industry recognitions that demonstrate the ability to deliver contract requirements within the given timeline and required budget.

This information can prove a business’ expertise and capabilities in handling the project and providing high-quality service.

3. Integrate Competitive Financial Analysis and Projections

Integrating competitive financial analysis and projections in a business plan can demonstrate a contractor’s ability to manage large government projects. The projected revenue, operating expenses and profit margins from the contract are recommended to be included in the study. 

Contractors seeking funding to acquire crucial systems and equipment must detail how these resources can enhance their ability to fulfill specific government contracts.

4. Ensure Compliance With Government Contracting Regulations

Government contracting comes with a unique set of compliance requirements and regulations. Compliance is vital to demonstrate a contractor’s commitment to ethical business practices and adherence to relevant laws. 

When drafting the business plan, outline quality assurance procedures and highlight the track record of meeting quality standards.

5. Follow IT Infrastructure Guidelines and Cybersecurity Measures

Depending on the type of contract, a contractor may be subject to some cybersecurity measures, security clearances and IT infrastructure guidelines.

The business plan should emphasize the contractor’s commitment to security awareness and employee security training to secure cybersecurity contracts. It should also highlight the ability to safeguard sensitive government data through firewalls, intrusion prevention systems and data encryption protocols. 

More importantly, the business plan must detail the contractor’s vulnerability management approach, incident response and disaster recovery for cybersecurity measures.

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Most Americans plan to watch the Biden-Trump debate, and many see high stakes, an AP-NORC poll finds

A new AP-NORC poll finds that most U.S. adults plan to watch or listen to some element of Thursday’s presidential debate. And many think the stakes are high for both President Joe Biden and former President Donald Trump.

Signage for the upcoming presidential debate is seen at the media file center near the CNN Techwood campus in Atlanta on Tuesday, June 25, 2024. A new poll finds that most U.S. adults plan to watch or listen to some element of Thursday’s presidential debate. (AP Photo/Pablo Martinez Monsivais)

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Rep. Wesley Hunt, R-Texas, speaks during an event Wednesday, June 26, 2024, in Atlanta, hosted by the Donald Trump campaign billed as a “Black American Business Leaders Round Table,” at Rocky’s Barber Shop, in advance of the presidential debate between President Joe Biden and Republican presidential candidate former President Donald Trump. (AP Photo/Gerald Herbert)

Ben Starett, lighting programmer for CNN, sets up lights in the spin room for the upcoming CNN Presidential Debate between President Joe Biden and Republican presidential candidate former President Donald Trump in Atlanta, Wednesday, June 26, 2024. (AP Photo/Gerald Herbert)

People converse during setup in the spin room for the upcoming CNN Presidential Debate between President Joe Biden and Republican presidential candidate former President Donald Trump in Atlanta, Wednesday, June 26, 2024. (AP Photo/Gerald Herbert)

FILE - Democratic presidential candidate former Vice President Joe Biden speaks during the first presidential debate with President Donald Trump Sept. 29, 2020, at Case Western University and Cleveland Clinic, in Cleveland. (AP Photo/Patrick Semansky, File)

This combination of photos show President Donald Trump, left, and former Vice President Joe Biden during the first presidential debate on Sept. 29, 2020, in Cleveland. (AP Photo/Patrick Semansky, File)

WASHINGTON (AP) — Most U.S. adults plan to watch some element of Thursday’s presidential debate and many think the event will be important for the campaigns of both President Joe Biden and former President Donald Trump, according to a new poll from The Associated Press-NORC Center for Public Affairs Research .

Both men remain broadly unpopular as they prepare to face off for the first time since 2020, although Trump, the presumptive Republican nominee, maintains a modest enthusiasm advantage with his base compared to Biden, the Democratic incumbent.

About 6 in 10 U.S. adults say they are “extremely” or “very” likely to watch the debate live or in clips, or read about or listen to commentary about the performance of the candidates in the news or social media.

The poll suggests tens of millions of Americans are likely to see or hear about at least part of Thursday’s debate despite how unusually early it comes in the campaign season. Both Biden and Trump supporters view the debate as a major test for their candidate — or just a spectacle not to miss.

“I think it’s super important,” said Victoria Perdomo, a 44-year-old stay-at-home mom and a Trump supporter in Coral Springs, Florida. “It shows America what you’re going to see for the next four years.”

Nic Greene, a libertarian who is a registered independent, said he’ll likely vote for Trump as the “least worst candidate.” He doesn’t think debates do much to help voters make decisions, but he’s expecting to be entertained and plans to listen to post-debate analysis on podcasts.

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“I think the majority of people have their minds made up with or without these debates,” he said. “It’s a circus.”

Both sides see the debate as important

About half, 47%, of Americans say the debate is “extremely” or “very” important for the success of Biden’s campaign and about 4 in 10 say it’s highly important for Trump’s campaign. About 3 in 10 Americans say it is at least “very” important for both campaigns.

Most Democrats, 55%, think the upcoming debate is extremely or very important for the success of the Biden campaign. About half of Republicans, 51%, say the same thing about the importance of the debate for the Trump campaign. Only about one-third of independents say the debate, taking place at a CNN studio in Atlanta, is highly important for either campaign.

Arthur Morris, a 40-year-old operations manager at a major financial firm, is an undecided voter open to Biden, Trump or a third-party option such as independent candidate Robert F. Kennedy, Jr. He, along with a significant share of Americans, has doubts about the mental capabilities of the aging candidates, and sees Biden’s debate performance as an important test.

“I need Biden to demonstrate to me that he’s cogent enough to be able to hold this office and execute to the level that we need him to,” Morris said.

Trump, meanwhile, needs to show he can be trusted after the Jan. 6, 2021, attack on the U.S. Capitol in which Trump supporters disrupted the certification of his 2020 loss to Biden and Trump’s recent conviction in a hush money scheme, said Morris, of Lewiston, Ohio.

About 4 in 10 say they are likely to watch or listen to some or all of the debate live, while a similar share say they will watch or listen to clips later. Another 4 in 10, roughly, expect to consume commentary about the debate and candidate performance in the news or on social media. Republicans and Democrats are more likely than independents to be following debate coverage in some capacity.

Voters are still unhappy about their options

Biden and Trump are each entering the debate with low favorability ratings. About 6 in 10 U.S. adults say they have a very or somewhat unfavorable view of Biden, and a similar number have a negative view of Trump.

Most Americans, 56%, say they are “very” or “somewhat” dissatisfied with Biden being the Democratic Party’s likely nominee for president, and a similar majority are dissatisfied with Trump as the likely GOP nominee. The poll indicates that Republicans continue to be more satisfied with a re-nomination of Trump than Democrats are with an anticipated Biden re-nomination. Six in 10 Republicans are satisfied with Trump as a nominee; just 42% of Democrats say that about Biden.

About 3 in 10 U.S. adults are dissatisfied with both Trump and Biden as their party’s likely nominees – with independents and Democrats being more likely than Republicans to be dissatisfied with both.

Republicans and Democrats are more likely to have a negative view of the opposing party’s candidate than they are to have a positive view of their own.

About 9 in 10 Republicans have an unfavorable view of Biden, and about 9 in 10 Democrats have a negative view of Trump. By comparison, roughly 7 in 10 Democrats have a favorable view of Biden, and about 7 in 10 Republicans have a positive view of Trump.

About 4 in 10 U.S. adults approve of how Biden is handling his job as president, in line with where that number has stood for the past two years. Biden’s approval rating among U.S. adults on handling the economy is similar, as is his handling of abortion policy. Only 3 in 10 approve of his approach to immigration.

“I do believe there has been some progress under Biden, but I believe it’s Congress who is the one stalling on any of the policies that Biden wants to proceed with,” said Jane Quan-Bell, 70, a school librarian from Chico, California, and a Democrat.

The conflict between the Israelis and Palestinians is an especially vulnerable spot for Biden. With only 26% of U.S. adults approving of his handling of the issue, it’s well below his overall approval rating. Nearly 6 in 10 Democrats disapprove of his approach.

The poll of 1,088 adults was conducted June 20-24, 2024, using a sample drawn from NORC’s probability-based AmeriSpeak Panel, which is designed to be representative of the U.S. population. The margin of sampling error for all respondents is plus or minus 4.0 percentage points.

Cooper reported from Phoenix.

A previous version of this story misspelled Arthur Morris’ last name. It is Morris, not Murray.