1. What Is Market Research in a Business Plan?
Market research in a business plan is the process of collecting and analyzing information about your target market, industry, competitors, and customer behavior. It helps validate your business idea and informs decisions related to product development, pricing, and marketing.
2. Why Include Market Research in a Business Plan?
- Demonstrates that there’s demand for your product or service
- Shows you understand your target market and competition
- Helps you set realistic sales and financial goals
- Builds credibility with investors or lenders
3. Key Market Research Sections in a Business Plan
- Industry Overview: Size, growth rate, trends, and key players
- Target Market Description: Age, gender, location, preferences, spending habits
- Customer Needs: Pain points and how your product solves them
- Competitive Analysis: Competitor strengths, weaknesses, pricing, and market share
- Market Size and Opportunity: Total Addressable Market (TAM), potential revenue
- Market Trends: Technological, cultural, or economic shifts affecting the market
4. Primary Research Examples for Business Plans
- Surveys and Questionnaires: Asking potential customers about their needs, budgets, or preferences.
Example: A coffee shop surveys 200 local residents and finds 75% prefer eco-friendly cups and seating areas with Wi-Fi. - Focus Groups: In-person or online discussions to gather deeper feedback.
Example: A skincare startup hosts a focus group with 10 target customers to evaluate packaging and product claims. - One-on-One Interviews: In-depth conversations with target users or experts.
Example: A tech startup interviews 10 small business owners about current software frustrations. - Product Testing or Demos: Offering prototypes or free trials to gather reactions.
Example: A food delivery app offers free access to 50 users and collects feedback on features and usability.
5. Secondary Research Examples for Business Plans
- Government Statistics: Data from ONS or business registries.
Example: A transportation startup uses ONS data showing a 12% rise in urban cycling since 2020. - Industry Reports: From sources like IBISWorld or Statista.
Example: A fashion brand cites an IBISWorld report indicating that the UK streetwear market is expected to grow 6% annually. - Competitor Websites and Reviews: Analyzing product features, pricing, and customer sentiment.
Example: A new gym examines Google reviews of nearby competitors and notes common complaints about cleanliness and pricing. - Trade Associations and Publications: Trends, buyer behavior, and expert insights.
Example: A childcare center uses insights from a local education body showing increased demand for flexible nursery hours.
6. How to Present Market Research in a Business Plan
- Use charts and graphs to show trends and survey results
- Include direct quotes from customers or focus group participants
- Compare competitor offerings in a simple comparison format
- Provide citations for all secondary data sources
Frequently Asked Questions
Why is market research important in a business plan?
It shows that your idea is based on real-world demand and helps you make informed decisions on marketing, pricing, and operations.
What are good sources for secondary market research?
Government websites, industry reports, competitor analysis, and academic journals.
Can startups conduct market research with a small budget?
Yes. Online surveys, social media polls, and informal interviews are cost-effective options.
How do I calculate market size?
Use available industry data, population figures, or sales volume estimates relevant to your target market.
What’s the difference between primary and secondary research?
Primary research is original data you collect; secondary research uses existing sources.
Should I include market trends in my plan?
Yes. Trends help justify timing, demand, and potential for growth.
Conclusion
Using strong market research examples for business plans not only validates your idea but also strengthens your pitch to investors and lenders. Whether through firsthand surveys or trusted external data, solid research builds the foundation for smart, strategic planning and long-term business success.