The business plan really is all about the market niche – researching it, understanding its needs, identifying how the needs are best met, and designing products and services that are aligned with the identified customer needs. From page one to the end, the entrepreneur is building a business plan that caters to clearly defined customers.
Business Plan Blues
Sometimes it is challenging to convey what the business has to offer the niche because people concentrate on the product or service rather than the how the products and services are bringing market niche solutions. Startups are building a niche from the ground up, so it is important for the business plan to always stay focused on exactly who the business is serving.
Following are some tips to keep the business plan’s line of sight on the target market.
Precisely Identify What is Being Offered
All clothing retailers sell clothes, but each one has a different customer base. One may sell children’s clothing while another sells haute couture. Obviously the marketing, pricing, and product sourcing will be vastly different for each type of retailer.
In the business plan, the entrepreneur is presenting a picture of the target market. Assume the startup is another clothing retailer. What makes this particular business unique, and who exactly is the business selling to? What is it about the business that makes it different from all the other clothing retailers.
Basically, the important question is: What is the business really selling? Is it comfort for young children? Is it glamour? Each business has a brand which is based on the ultimate purpose of the business. Sure, the clothing retailer sells fashion, but more importantly, the business is selling an image and qualities the target market will appreciate. Capturing in the business plan what is really being sold will present a much clearer picture of the enterprise to readers.
Paint a Picture of the Market Niche
Why does the entrepreneur believe the niche market exists? The business plan should always reflect in-depth market research. Once potential customers are identified, it is wise to conduct a market survey and pinpoint the needs.
The next step is to identify the competitors and discover why the need remains unmet. This process gives businesses critical insight into the niche market and opportunities that may have not been realized yet.
Get Specific About the Market Niche
Small businesses must cater to a limited group of people. That does not mean they should only sell one product, but a good growth strategy is specifically identifying the target market for every product or service sold. It is possible that the business will sell to more than one market niche.
However, going through this process will help the entrepreneur avoid stretching to far during the startup and early operations stage. As market niches are added, it becomes clear that each one needs special marketing, pricing, promotion, customers support, and so on. Products and services can always be added over time as a growth strategy.
The business plan needs to stay focused on the market niche from beginning to end. This will make it much more attractive to investors. Just as importantly, this approach will keep the entrepreneur focused on a path to success.