How to use competitive market research within a business plan
A business plan aims to help a business know where it wants to go and how to get there. This article answers how to use competitive market research within a business plan. However, the plan should be viewed as a future-facing map, not as a static document. Competitive Intelligence should be used within the plan. Competitive Intelligence helps identify the strongest competition and where new opportunities may exist. Businesses can create strategies to stay ahead of the competition using this information.
Market research in a business plan
The stages of the competitive market research process for a business plan are:
- Secondary research
- Primary research
- Collation and analysis
Competitive Market Research Within a Business Plan
A comprehensive business plan is essential for any entrepreneur or business leader. Competitor analysis is a key element to consider as part of this process. A business plan aims to help a business know where it wants to go and how to get there. This article answers how to use competitive market research within a business plan. However, the plan should be viewed as a future-facing map, not as a static document. Competitive Intelligence should be used within the plan. Competitive Intelligence helps identify the strongest competition and where new opportunities may exist. Businesses can create strategies to stay ahead of the competition using this information.
A business plan is a map.
Whatever the purpose of a business plan, it should be viewed as a future-facing map. Use it to know the direction you want to go and visualise the challenges you will face. Intelligence within a business plan consists of:
- Market analysis
- Research your competitors. Or competitor analysis as it is called.
Market analysis and competitor analysis play a central role in creating your strategy. Your business plan could be for a funding round, a startup, or an expansion into new markets. A business plan is useless without competitor analysis and market analysis.
Competitive analysis business plan
These tools and processes allow you to see:
- Where you are
- What your future could be like
- Who will get in your way and
- What is the best route to take
However, a map is just a map. You need to add context and insight to get the lay of the land and the potential obstacles. So, it’s impossible to create a business plan without including competitive analysis. A plan without it is like driving in your car blindfolded. And how can you formulate a plan if you don’t understand:
- Customer needs
- Market conditions
- Industry trends
Understand the future landscape
That’s why it’s crucial that you understand how to do market research for a business plan. Conducting market analysis research allows an understanding of your current and future landscape. With insights, you can create a business plan showing your success path. If you are new to market analysis research, it’s easy to be overwhelmed. Especially with all the various types of Market Intelligence tools around. All are offering an easy solution to your needs. Some do, and some don’t. Some are excellent, while you will be better off with Google than others.
Competitive analysis business plan
Secondary research, Google, and other search engines will be sufficient at first. If you can’t find something, look in different search engines. Still no joy in using niche search engines. And, of course, try asking your questions differently.
This article covers everything you need to know for your business plan. And the vital Competitive Intelligence-based market research. So, let’s move on and get started.
Initial Competitive Market Research
You have preconceived thoughts about your competitors and markets. You’ll definitely have many unconscious biases about your:
- People involved
- The future
What are biases?
The best way to neutralise bias is by being aware of them in the first place. Allowing you to isolate them, note them down, and reject them. Another thing to be careful of is our assumptions. The best thing to do with the assumption is to get them out in the open. List them and discuss them. Don’t reject or accept. Just accept that they are assumptions. Like biases, assumptions don’t like the limelight. They do their damage deep in people’s minds. To confirm or reject your biases, assumptions, and concepts. Then, determine which areas you will want to focus on.
But there is something else you need to do during this initial research. And perhaps before you even power up the Google machine. Take a leaf out of the Competitive Intelligence playbook and ask potent questions. Questions that will help you define and focus your efforts.
Every research project is different.
Every competitive market research or research of your competitors will be different. But here are some questions to get you started:
- What’s the market size?
- Is the market expanding?
- Or is it contracting?
- How’s the industry value chain structured?
- Is the competition intense?
- Is there a threat of new entrants to the market?
- How many potential buyers are there?
- What are the barriers to entry?
- What does the supplier bargaining power look like?
- And what substituted products could customers use?
Investment business plan
The level and formality of this research depend on what you want to do with it. As per Competitive Intelligence, you should isolate the problems and opportunities first. Before creating questions to answer. You may be an existing business looking to grow or gain investment.
It will need more than just a business plan if looking for investment. Owners can chase money without any of the following put in place:
- A profile in each case of the investor demographics to build exact fits in both directions
- Understanding of investment modelling and fit (alongside current investments etc.).
- Term sheets and dedicated proposals to match identified investor appetites
Getting a meaningful investment outside of striking a lucky hit is almost impossible. Either way, you should informally talk to your customers. We suggest keeping the questions in mind. But encouraging an open and informal conversation. And encourage them to speak and share their ideas.
Competitive analysis business plan
If you are a startup founder, get in touch with people who could be your target audience. Potential customers if you like, but don’t treat them as such. Just ask their opinion of the market and those out there, including:
- What are the problems with current suppliers?
- Who does some good stuff?
- Why is it considered a good offering?
Depending on what you want to do, this could be chatting with friends, colleagues, and family.
This phase aims to start building possible hypotheses about the future. It’s not about collecting and turning a lot of information into data. Nothing off the table or accepted as fact. Resist trying to prove or reject an assumption early on. That’s precisely what an assumption wants you to do. There will be time to abandon these later on in the exercise.
Secondary competitive analysis and market research consist of:
- Existing internal information
- And more likely external information.
- Social media,
- Industry reports,
- Publically available published research
In-depth secondary research gives an excellent understanding of your broader market.
The list of secondary research sources is vast. Where to look will depend on the questions you want to answer and the scope of your business plan. Space and defence businesses will have different sources of information than Fintech organisations. Obvious, perhaps, but it needs to be said. Examples of secondary market research for your business plan include:
- Academic papers
- Industry-based white papers and reports
- Financial analyst reports
Here are some search engines to go beyond Google to find alternative search results:
- Board Reader
- Dark Search
- Million Short
- Answer the public
- Deep Help
Once you have collected the information, organising and collating it is essential. If you have not got questions sorted first, you may struggle with the vast amount of information. Once you have sorted the information, you have created data. Rearrange the data into different boxes that suit your requirements. This way, you will start to see patterns and what could happen.
Primary market research
The next stage is Primary market research is precious. And don’t let anyone tell you that primary is less valuable than secondary research. Again it all depends on the questions you need to answer. Combining secondary with primary research will create even better competitive research. And each can back up and verify the other’s findings. Or reject them, of course.
There are quantitative and qualitative research methods within primary research. Usually, quantitative research tells us what is happening. Qualitative research suggests to us why it is happening. Both are equally important. Make your competitive analysis more powerful by finding out what’s happening next. What’s happened is nice to know, and what’s happening now is good to know. But what’s happening next week, month or year is a must know.
This must-know insight will come from analysing all the secondary and primary information. But talking to people who can offer their thoughts and experience will be the key.
Quantitative market research for a business plan
Quantitative market research involves survey-based techniques. Surveys are best for you to collect a great deal of data. The data analysis will reveal insights to shape the message of your business plan. There are many tools to create online and email surveys. Some are simple, and others not so much. Use the tool that fits your needs, and keep it simple.
Qualitative market research for a business plan
Qualitative research creates a better understanding of why people make decisions. Quantitative techniques give you a rich vein of context and insight. Techniques include in-depth interviews and focus groups. Lots of use of open-ended questions. Encouraging how they make decisions. Think that way about a competitor, product, or the future. But we find the best primary research is just talking to someone who will know the answer. It can be that simple. Then, talking to more to confirm or reject the hypotheses. Take into account their assumptions and biases, of course.
Collate and analyse
After answering your research questions, it’s time to analyse what you have found. Your business plan needs more than interesting information. Where possible, you need to find that “Blinking Heck, I didn’t know that. It’s amazing/alarming.” To get the reader excited, and if investing, you have to hold them back with a stick.
Now, it’s time to write your competitive market insights into your plan. Have a section for the key findings, a summary of the research, and an appendix with the full report. Defining your key findings is not a five-minute job at the end of the exercise; and it is the most crucial bit. Other than the section where you make up some revenue numbers and show the hockey stick growth. 🙂
Your whole business plan narrative needs to be built around the isolated insights. They tell the world why it’s important for your business and why an investor would be crazy not to invest. Lead the investor to think it’s their insight that has revealed the opportunity.
Keep your market up-to-date
Only incorporate visuals like graphs and charts if they bring your findings to life. If they don’t, never use them as filler or to look clever. Once the business plan is sorted, keep your market research up to date.
So in order to create an effective business plan, you must first understand what your target audience wants. Use these tips to help you do just that! The best way to learn about your customers’ needs is to talk to them directly. This will give you valuable information on what products and services they need and how they use those products and services.
Understand Your Audience
Once you’ve identified your target market, you’ll need to learn more about them. You can start by asking yourself questions such as “What do I know about my potential customers?” and “How can I reach them?”.
Create a List of Questions You Want Answers From Them
If you’re looking for answers to some of those questions, you should ask them directly. This will give you insight into how your potential customers think and act. It’s also a good idea to keep track of any ideas you come up with so you can use them later when creating your business plan.
Ask Yourself Why They Would Buy from You
Think about why people would buy from you. What makes you different than other businesses in your industry? What sets you apart? What makes you unique? What makes you stand out?
How to use competitive market research within a business plan
In conclusion, a business plan is an important tool for any business. It can help you to set goals and direction, as well as track your progress. Competitive Intelligence should be used to help you stay ahead of the competition. It doesn’t matter if you are a startup or an established business. Understanding competitors is an incredibly important aspect of success. We asked how to use competitive market research within a business plan. Industries are transforming overnight to keep competitive. It’s vital that you understand customers deeply. What are your competitors up to, and what is the future of your market? And market research in a business plan is very important.