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Business Plan InformationAnalyzing Customers in Your Business Plan
by:
Dave Lavinsky
The Consumer
Analysis section of the business plan assesses the consumer
segments that the institution serves. In it, the institution must 1) identify its target customers, 2) convey the necessarily of these customers, and 3) show how its products and services satisfy these needs.
The 1st step of the Consumer
Analysis is to define exactly which customers the institution is serving. This requires specificity. It is not adequate to say the institution is targeting small businesses, for example, because there are some million of these types of customers. Rather, the plan must identify precisely the customers it is serving, such as small businesses with 10 to 50 employees based in large metropolitan cities on the West Coast.
Once the plan has clearly known
and defined the company’s target customers, it is necessary to explain the demographics of these customers. Questions to be answered include: 1) how many a potential customers fit the given definition? is this consumer
base growing or decreasing? 2) what is the average revenues/income of these customers? and 3) wherever
are these customers geographically based?
After explaining consumer
demographics, the plan must detail the necessarily of these customers. Conveyance of title consumer
necessarily could take the form of past actions (X% have purchased a similar product in the past), futurity projections (when interviewed, X% aforementioned that they would-be purchase product/service Y) and/or implications (because X% use a product/service which our product/service enhances/replaces, then X% need our product/service).
The business plan must as well detail the drivers of consumer
decision-making. Sample questions to answer include: 1) Do customers find cost to be much important than the quality of the product or service? and 2) are customers looking for the highest level of reliability, or wish they have their own keep and simply seek a basic level of service?
There is one last critical step in the Consumer
Analysis -- showing an understanding of the actual decision-making process. Examples of questions to be answered here include: 1) wish the consumer
consult others in their organization/family before fashioning a decision?, 2) wish the consumer
seek multiple bids? and 3) wish the product/service require significant operational changes (e.g., wish the consumer
have to invest time to discover new technologies? wish the product/service cause different members inside
the organization to lose their jobs? etc.).
It is essential to truly understand customers to develop a eminent business and marketing strategy. As such, sophisticated investors require comprehensive profiles of a company’s target customers. By defrayal the time to research and analyze your target customers, you wish develop some
enhance your business strategy and funding success.
Just about the author:
As President of Growthink Business Plans, Dave Lavinsky has helped the institution become one of the premier business plan development firms. Since its inception, Growthink has developed over 200 business plans. Growthink clients have conjointly raised over $750 million in financing, launched many
new product and service lines and gained competitive advantage and market share.
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