Market Analysis

The market analysis section of your business plan should illustrate your industry and market knowledge as well as any of your research findings and conclusions. This section is usually presented after the company description.

What to Include in Your Market Analysis

Industry Description and Outlook – Describe your industry, including its current size and historic growth rate as well as other trends and characteristics (e.g., life cycle stage, projected growth rate). Next, list the major customer groups within your industry.

Information About Your Target Market – Narrow your target market to a manageable size. Many businesses make the mistake of trying to appeal to too many target markets. Research and include the following information about your market:

Distinguishing characteristics – What are the critical needs of your potential customers? Are those needs being met? What are the demographics of the group and where are they located? Are there any seasonal or cyclical purchasing trends that may impact your business?

Size of the primary target market – In addition to the size of your market, what data can you include about the annual purchases your market makes in your industry? What is the forecasted market growth for this group?

How much market share can you gain? – What is the market share percentage and number of customers you expect to obtain in a defined geographic area? Explain the logic behind your calculation.

Pricing and gross margin targets – Define your pricing structure, gross margin levels, and any discount that you plan to use.

When you include information about any of the market tests or research studies you have completed, be sure to focus only on the results of these tests. Any other details should be included in the appendix.

Competitive Analysis – Your competitive analysis should identify your competition by product line or service and market segment. Assess the following characteristics of the competitive landscape:

Market share
Strengths and weaknesses
How important is your target market to your competitors?
Are there any barriers that may hinder you as you enter the market?
What is your window of opportunity to enter the market?
Are there any indirect or secondary competitors who may impact your success?
What barriers to market are there (e.g., changing technology, high investment cost, lack of quality personnel)?

Regulatory Restrictions – Include any customer or governmental regulatory requirements affecting your business, and how you’ll comply. Also, cite any operational or cost impact the compliance process will have on your business.

Guest Post: Quilts For Sale - 5 Reasons Why We Wrestle With Retail Pricing

Many of us wrestle with how to price our quilting projects especially when we are first starting out in business. We have designed our personal line of quilts and we have our shelves well stocked and ready for business.

Before starting your quilting business you had probably visited many quilting stores or shops and looked at the price of their quilts. You also told yourself you could make a quilt for a more reasonable price as you thought the retailer was too expensive.

The coin has flipped. You are now the retailer and from the retailers point of view the cost looks very differently. And that is the problem...how to price your quilts for sale. You are sincerely concerned about this because you want to please the customer with a fair price but at the same time you need to make a profit. Speaking from experience, if you do not make a profit, you cannot continue to be in business. It may sound harsh, but it is true.

Here are 5 reasons why we are wrestling with retail pricing:


We love the quilts that we made.
Our quilts are our personal design.
Our fabrics and notions were costly.
We worked very hard.
It takes many hours of labor to complete a quilt.

You will need to re-evaluate your thinking. I know and understand from a personal point of view how difficult it is to part with our quilts; nonetheless, we need to think as a business person and be objective. We need to be a stranger to our quilts and discard any emotional attachment that we have for our creations.



A stranger has fallen in love with your design, your workmanship, and the types of fabrics that you used, and it is perfect for her personal use. She is willing to pay a fair and reasonable price for your quilt.

Here are 7 reasons why a customer will purchase your quilt:

• It will meet her needs.
• She loves it.
• She recognizes the amount of work and labor that went into making it.
• She could not make it herself as she does not know how to quilt.
• She does not have the time to sew a quilt.
• If she could quilt she could never have created what you designed.
• It is perfect and she is willing to pay monies to have it for herself.

Do not hesitate to sell your creation as another person will truly enjoy and share in the love. The customer will continue to add her memories and keep your quilt alive for a very long time. It may even continue into the future as an heirloom for their family.

Understand Your Market

To run a successful business, you need to learn about your customers, your competitors and your industry. Market research is the process of analyzing data to help you understand which products and services are in demand, and how to be competitive. Market research can also provide valuable insight to help you:

Reduce business risks
Spot current and upcoming problems in your industry
Identify sales opportunities

How to Conduct Market Research

Before you start your business, understand the basics of market research by following these steps:

Identify Official Government Sources of Market and Industry Data

The government offers a wealth of data and information about businesses, industries and economic conditions that can aid in conducting market research. These sources provide valuable information about your customers and competitors:

Economic Indicators
Employment Statistics
Income and Earnings

Identify Additional Sources of Analysis

Trade groups, business magazines, academic institutions and other third parties gather and analyze research data about business trends. Use Internet and database searches to find information related to your location and industry.

Understand the International Marketplace

Today’s economy is a globalized marketplace, so it’s important to understand the international factors that influence your business. These resources will help you to research potential international markets for your products or services:
Market Research Guide for Exporters
Identifies resources for business owners seeking to sell their products abroad.
Country Market Research
Reports on trade issues in countries across the globe.
BuyUSA.gov
Helps U.S. companies find new international business partners.