This component of your business plan will define your target market. Before proceeding with this section you should take into consideration the demographics (age, gender, residence, income, family structure, etc.) and the size of your market. You will need to determine the need for your product or service in the area that you plan on operating your business from. There are a number of ways to go about obtaining this information. I suggest starting with the census information of your target area.
Break down your product information, defining the target market for each (see Market Segmentation in the sample below). Who will be purchasing each product or service?
You will also want to determine who your competition is. This can be easily done online (I recommend using Google Maps). Explain the advantages and disadvantages of each competitor.
Take your time developing your market analysis. You will need this information for advertising and promotional purposes as well as determining which products and services will fair best in your target area.
Sample Company History Summary
The primary target market for The Party Store consists of most of Kings County (excluding Cambridge, which is located close to The Ultimate Party Store in Richmond). The population for this area is 25,119, which accounts for 4.13% of the states total population. There are 9,719 households in this area with a median income of $37,645. The estimated annual growth for this area is 2.3%.
The target market for The Party Store will shop for wedding accessories or general party supplies.
· There are approximately 265 weddings and civil unions held each year within the target market area.
· There are 9,719 households in the target market area.
Target Market Segment Strategy
· Wedding Accessories: This group of customers is looking to purchase supplies for weddings and civil unions The Party Store will provide a variety of accessories in its retail store as well as allowing customers to order supplies that are not in stock.
· Party Supplies: This group of customers is looking to purchase party supplies for a variety of reasons including, but not exclusive to, birthdays, graduations, baby showers, anniversaries, holidays, and bridal showers. The Party Store will have a wide selection of party supplies available at its retail store. Customers requiring large amounts of party supplies will have the option to place an order for items that are not in stock.
Competition and Buying Patterns
There are two party supply stores within a 30-mile radius of The Party Store as well as various party supply stores online. While some customers will prefer the convenience of shopping online, or the larger selections that stores such as The Ultimate Party Store in Richmond has, The Party Store is confident that there is a need for a local, exclusive party supply store.
· The Ultimate Party Store in Richmond
This company provides 30,000 in stock party supply items to customers at their 15,000 square foot facility. They also offer items that The Party Store will not such as costumes and rentals. They are located 39 miles (a 1 hour drive) from The Party Store.
· Party Party in Jonesville
This company provides party supplies online and at 50 retail stores across the United States. They also offer items that The Party Store will not such as costumes. They are located 35 miles (a 50 minute drive) from The Party Store.
This post is part of the series: Business Plans
Advice to help you create a solid business plan for your company.