The market and the competition. What do you need to know before starting a business.

Launching a business is not particularly difficult. Have you seen how many people do that? Have you noticed how few are successful?

Well, most of the time, the people who are truly successful have done their homework, that means they know all the possible information about the market and the competition. 

Whether you do your own research, or you contract a team of experts, in which case your chances increase, this step can’t be overlooked.

Find out below what you need to know before launching a business and how important it is to know the market and the competition! 

What is the target market? 

After you’ve come up with an idea, it will be necessary to find out how exactly you’ll monetize it. A business can’t survive without customers, so you’ll need a strategy to attract their attention. Not everyone’s attention, just the target audience. 

The target audience is also known as the target market, meaning that category of clients that your business will serve directly. In order to identify said category, start not necessarily with who these people are, but by what it is that they want.

Find out how to identify customers’ need by using Big Data and the process will be much easier. Describe the final customer in detail and you’ll also figure out the sector you wish to approach.

Of course, after winning over customers it will be mandatory to figure out how you’ll retain said customers, but this is a topic for another day. 

What does a business plan look like? 

You can’t attempt a market entry if you’re not backed by a structured business plan. The research has to be organized and analyzed in order to find answers for questions from potential investors, for example. A business plan will offer clarity, in what pertains to the direction of the business, but also sources of income. 

There are countless models of business plans to be found online or you may create your own from scratch, according to the specific nature of your business. Even though information may vary, some points must always be touched upon.

These are as follows: 

• Executive summary:
• The general description of the company;
• Products/services offered;
• Market analysis and competition analysis;
• The strategy and its implementation;
• The way the team and its management will be organized;
• The financial plan and projections.

After you’ve put together a well outlined business plan, you’ll know exactly what are the conditions on the market you want to approach, but also who is your competition.

Armed with this knowledge you’ll be able to choose a market entry strategy. 

What does a financial model look like? 

The most important elements of a financial model are the profit estimations based on the market analysis, the investment cost and the break even point. Thus, how productive a business is will be determined by the difference between profit and costs. 

Of course, we suggest reaching out to consultants, especially if you’re not already familiar with all these concepts. 

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