Summarize this article:

A market analysis can be complex or simple. Tailor it to your audience. For example, if you are seeking investors, then they will need more detail than if the business plan is solely for internal use—however, don’t overdo it. Include demographic information such as their age, income, location, gender, etc. Also describe their buying habits and hobbies.  For example, if you are running a children’s clothing boutique, then your target consumer might be stay-at-home moms who are middle class. Many businesses target multiple market segments. For example, a coffee shop might target people who work within a five mile radius as well as teens and the elderly who drink coffee. However, be realistic when identifying your market segments. Not everyone in the world is a potential customer. Your products or services should meet a consumer need. For example, a children’s clothing boutique meets the needs of parents who want to dress their children in unique outfits. Sometimes, a need only arises after you’ve created your business. However, it will be difficult to get investors in this situation. For example, you might describe the need for children’s clothing this way: “Increasingly, young parents want to establish their children’s individual identify from an early age. Just as clothes make the person, a child’s clothing plays a key part in how others perceive them—and their parents. The unique outfits at Kid’s Couture LLC will let status-conscious parents nurture their child’s individuality.” Offer a birds-eye view of your industry. How fast has the market grown? What is its current size? Provide national and local information. Give the reader some sense of whether this is an emerging market or one that is established. For example, an analysis of the coffee industry might begin, “Coffee consumption in the U.S. has grown at a 2.5% annual growth rate for the past 10 years. The retail coffee industry has grown at twice this speed in northern New England….” Markets rarely stand still. You should note any changes that you see. What are the changes in demographics, taste, or customer needs? Are certain products or services gaining traction. For example, young families might be moving into an area. By contrast, a neighbor may be aging as few young people move to it. These trends can affect the success of your business. Identify your competitors’ market share and then discuss their strengths and weaknesses. Also explain how you will take advantage of current competitor weaknesses. Usually, you will offer a service that your competitors don’t, but you might also provide a different experience.  For example, a children’s boutique might find that there is no one within driving distance who offers original children’s clothing. Instead, the only competitors might be box stores who offer popular brands. A coffee shop might compete by offering a comfortable, at-home atmosphere that brand stores cannot create. You should write the summary last but put it at the front of the market analysis. Provide a capsule summary of the highlights. Generally, the summary can be as short as one paragraph. This summary might be included in a loan application, so it should be as thorough as possible while maintaining brevity. Based on your research and analysis, you might need to change other parts of your business plan. This is not unusual—your initial assumptions might have been wrong. For example, you might need to change your marketing plan based on what you learned about consumer behavior. If your target market doesn’t watch television, there’s no reason to pay for pricey TV ads.  If the demographics of a neighborhood are changing in a way that’s bad for your business, you might need to relocate. If your target market has less disposable income than anticipated, you will need to change your pricing strategy.

Summary:
Identify your audience. Define your target consumers. Explain what market need you satisfy. Analyze the industry. Identify market trends. Provide a competitive analysis. Draft a short summary of the market analysis. Adjust the other sections of your business plan.