An analysis of the purpose and importance of a business plan

Before you can describe your marketing and sales strategies, you need to figure out what market you serve and what need you fulfill. Then, your Marketing Strategy and Implementation Plan, ideally covered in the next section of your business plan, will fit into a logical flow.

An analysis of the purpose and importance of a business plan

Town B Although Town B looks more competitive 10 competitors vs. The definition of a potential customer will depend on your type of business. For example if you are opening a small shop selling office furniture then your market will be all the companies within your delivery range.

You would however factor it when assessing the value of the market. Market value Estimating the market value is often more difficult than assessing the number of potential customers.

The first thing to do is to see if the figure is publicly available as either published by a consultancy firm or by a state body. It is very likely that you will find at least a number on a national level. If not then you can either buy some market research or try to estimate it yourself.

Methods for building an estimate There are 2 methods that can be used to build estimates: The bottom up approach consist in building a global number starting with unitary values.

In our case the number of potential clients multiplied by an average transaction value. We would first factor in the size of the businesses in our delivery range in order to come up with the size of the desks park. Then we would try to estimate the renewal rate of the park to get the volume of annual transactions.

Finally, we would apply an average price to the annual volume of transactions to get to the estimated market value.

The Importance of Planning in an Organization | arteensevilla.com

Here is a summary of the steps including where to find the information: You can get the number and size of businesses in your delivery area from the national statistics. Your accountant should be able to give you the useful life of a desk but you should know it since it is your market!

An analysis of the purpose and importance of a business plan

You can compare the desk prices of other furniture stores in your area. As a side note here: The top down approach consist in starting with a global number and reducing it pro-rata.

When coming up with an estimate yourself it is always a good practice to test both the bottom up and top down approaches and to compare the results.

If the numbers are too far away then you probably missed something or used the wrong proxy. Once you have estimated the market size you need to explain to your reader which segment s of the market you view as your target market.

Target Market The target market is the type of customers you target within the market. For example if you are selling jewellery you can either be a generalist or decide to focus on the high end or the lower end of the market.

An important part of any good business plan is the Market Analysis

This section is relevant when your market has clear segments with different drivers of demand. In my example of jewels, value for money would be one of the drivers of the lower end market whereas exclusivity and prestige would drive the high end. Now it is time to focus on the more qualitative side of the market analysis by looking at what drives the demand.

Market Need This section is very important as it is where you show your potential investor that you have an intimate knowledge of your market. You know why they buy! Here you need to get into the details of the drivers of demand for your product or services.

One way to look at what a driver is, is to look at takeaway coffee. One of the drivers for coffee is consistency. The coffee one buys in a chain is not necessarily better than the one from the independent coffee shop next door.

Whereas you know that the coffee from the chain will taste just like in every other shop of this chain. Hence most people on the move buy coffee from chains rather than independent coffee shops. From a tactical point of view, this section is also where you need to place your competitive edge without mentioning it explicitly.

What you want to do is prepare the reader to embrace your positioning and invest in your company.

Gallery of Purpose Of A Business Plan

To do so you need to highlight in this section some of the drivers that your competition has not been focussing on. A quick example for an independent coffee shop surrounded by coffee chains would be to say that on top of consistency, which is relevant for people on the move, another driver for coffee shop demand is the place itself as what coffee shops sell before most is a place for people to meet.

You would then present your competition.State the main purpose of a business plan - arteensevilla.com Oct 09,  · What is a SWOT analysis? S.W.O.T. is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is an organized list of your business’s greatest strengths, weaknesses, opportunities, and threats/5().

an analysis of the purpose and importance of a business plan The update of the Downtown and Business District Market Analysis toolbox is a result of a collaborative effort involving. Planning is one of the most important parts of running a business, no matter whether it is a large multinational corporation trying to plan an expansion or a small business launching an exciting.

The purpose of a business plan is to help articulate a strategy for starting your business. It also provides insight on steps to be taken, resources required for achieving your business goals and a timeline of anticipated results.

A marketing plan lets you implement an integrated strategy with regard to your customers and your sales goals. The marketing plan identifies the characteristics of your potential customers, details where to find them, specifies how to reach them and suggests how much they will pay.

What Is the Importance & Purpose of a Business Plan? | arteensevilla.com