1. What Is Market Research in a Business Plan?
In a business plan, market research is the section where you show that you understand your industry, target customers, competitors, and market trends. It proves there is demand for your product or service—and that you know how to reach the right people.
2. Why It’s Crucial for Your Business Plan
Market research:
- Validates your business idea
- Helps you tailor your product or service
- Attracts investors or lenders
- Informs marketing and sales strategies
A well-written market research section builds trust and credibility.
3. Market Research in Business Plan Example
Market Analysis
Industry Overview
The UK coffee shop market is worth over £10 billion annually and continues to grow, driven by consumer demand for high-quality, convenient, and socially conscious options. The market is expected to grow by 4.2% annually over the next five years.
Target Market
Our primary target market is urban professionals aged 25–40 in Leamington Spa. These individuals value convenience, premium quality, and a social experience. Secondary audiences include students and remote workers looking for a relaxed workspace.
- 67% of 25–40-year-olds visit a coffee shop at least twice a week
- The average spend per visit is £4.75
- 85% consider ethical sourcing a factor when choosing where to buy coffee
Customer Needs
Customers seek:
- Fast, friendly service
- Comfortable seating and Wi-Fi
- Ethically sourced, high-quality coffee
- Light snacks and plant-based options
Our research, including a local survey of 150 people, revealed 78% would prefer a local independent coffee shop over national chains if it offered these features.
Competitive Analysis
Key competitors include:
- Costa Coffee (x2 locations): Strong brand, consistent service
- Coffee#1: Popular with students
- Two local independents: Limited opening hours, no loyalty schemes
Our competitive edge includes extended opening hours, a digital loyalty programme, and strong ethical branding.
Market Gaps Identified
- Lack of eco-friendly and vegan offerings
- Poor customer loyalty schemes among local competitors
- Inconsistent Wi-Fi and workspace comfort
4. How to Write Market Research for Your Business Plan
- Use statistics: Show market size and growth
- Define your audience: Be specific about who they are and what they want
- Assess the competition: Detail their strengths and your unique edge
- Highlight trends: Spot patterns in behaviour or demand
- Include your own research: Even small surveys can add value
5. Tips for Including Market Research
- Avoid generic info—focus on your niche and location
- Use visual aids if allowed (charts, bullet points)
- Be concise but detailed—show your knowledge, not fluff
- Reference real sources or your own findings
- Tie research insights into your product/service positioning
Frequently Asked Questions
Do I need market research in every business plan?
Yes. Investors and banks expect it to see if your idea has commercial potential.
Where can I find free market data?
Use ONS, Statista (limited access), local council reports, and trade associations.
Can I do my own research?
Absolutely. Surveys, interviews, and competitor visits can be highly effective.
How detailed should the research be?
Enough to show deep understanding, without overwhelming the reader—1–2 pages is typical.
Should I include charts or visuals?
If permitted, yes. They make the data more digestible.
Can market research help with pricing?
Yes, especially when surveying what customers are willing to pay.
Conclusion
Including market research in your business plan isn’t optional—it’s essential. It shows you know your customers, your competitors, and how your business can succeed. With real data and clear insights, you position your business to win support from investors, banks, and partners.