Know Your People a.k.a. The Market Description [Business Plan Basics #3]
So far, in part 1, we’ve covered the Business Description, which gives the reader an overview of your company or idea and in part 2, the Industry Analysis, which details the business arena your idea fits into. Up next? The Market Description.
The Market Description is your chance to get specific about who exactly will be interested in your product or service. How big is the market? How old are they? What gender are they? Where do they live? The more details, the better. Here’s one way to break it down:
What are the demographic characteristics of your market? Take a look at your Customer Avatar worksheet to help with this process. This includes things like: age, gender, race, educational level, family structure, income level, and occupation. Do research online by looking at Census and other figures to add specific numbers here.
Where do your target markets live? Are they in cities or the suburbs, certain city, state, or region? Similarly as with the Demographics, enrich this section by including detailed statistics about the number of potential customers in this geographic market or in a rural community (or maybe all of the above)? Is your product or service only available to people living in a certain city, state, or region?
This is your place to describe the psychology or personality traits of your market, such as: What do they think about? What are their primary beliefs and attitudes? What do they need more of? Understanding who your customer is from a psychographic standpoint will be incredibly helpful as you start figuring out how to best market your idea!
How does your target market buy or use products or services? Do they shop online? Are they all about brand loyalty? How frequently do they shop for the product or services you’re offering, and will they come back for more?
Lastly, the Market Description should clearly state WHY your target market needs the product or service you’re planning to sell. This is your opportunity to clearly outline a need among your ideal consumer, a gap in the current business climate, and explain how your product or idea will fill that need among your target market. If you’re competing against companies or organizations with similar products or services, take the time here to describe the reasons why the consumer will come to you versus your competition.
Ready to dive in and flesh out your Market Description? Download our Market Description Worksheet to start brainstorming. Then, write up a 1-2 page Market Description based on your notes and get ready to move onto what comes next: the Competitive Analysis.