How to make the transition from your market research to your business plan? This is the last of the 7 steps of our market research methodology.
Today we will discuss why market research needs to be seen as an input to your business and financial plans.
Read phase 7 of our market research methodology
Before we give you an overview of this last step, let us remind you that you can read the previous posts that accompanied the publication of each step our methodology here :
- Phase 1: putting your business on paper and fixing the most obvious flaws
- Phase 2 : improving your idea with a prototype
- Phase 3 : choosing the right market research methods (there are so many!)
- Phase 4 : using secondary information sources for the PESTEL and the competition analysis
- Phase 5 : qualitative research
- Phase 6 : quantitative research
Why market research is a requisite for your business plan
The business plan sums up all your predictions for your future business. It needs to be backed up with facts and figures to convince your bank, your partners and investors.
Market research is a preliminary to the business plan because :
- it allows you to formulate hypotheses about your future market
- it enables you to confirm (or not) those hypotheses
- it helps you quantify your market (number of potential customers, potential revenues)
- it gives you an overview of the factors that will determine how big a chunk of that market you’ll be able to take
How can you do a financial plan without market research?
The financial plan is an instrumental part of the business plan. It shows the financial projections of your venture and must prove that the case is profitable.
How can you do a financial plan without knowing those essential pieces of information?
- the size of the market
- the market share you can reasonnably expect
- the price customers are willing to pay for your product or service
Market research aims at answering those questions.
Essential inputs from market research for your business plan
Once your market research is done do the following before starting writing your business plan :
- identify and select the most promising market segments
- evaluate the size of each market segment
- evaluate the potential revenues from each market segment
We hope our market research methodology will help make your project a success.
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