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Before you start seeking legal advice, renting office space, or forming an LLC, you need to put your thoughts on paper. You’ll also be able to share this plan with others to help you get valuable feedback.I don’t recommend starting a company without consulting people first.Writing a formal plan increases your than those without a plan.
If there’s no market for your business, the company will fail. All too often I see entrepreneurs rush into a decision because they fall in love with an idea.Your competitors will depend on your target market.If you’re planning to sell jeans for , you won’t be competing with designer brands selling jeans for 0.Customers won’t have a reason to switch to your brand if it’s the same as the company they already know and trust. Your differentiation strategy could involve your price and quality.If your prices are significantly lower, that can be your niche in the industry.You can target customers living in New England, for example.By the time you’re finished, the target market could look something like this: This profile encompasses all four demographic segments I mentioned earlier. Your business plan should talk about the research you conducted to identify this market. You’ll use this target market in other sections of the business plan as well when you discuss future projections and your marketing strategy. In addition to researching your target market, you need to conduct a competitive analysis as well. When you’re writing a business plan, your startup doesn’t exist yet. Don’t expect to be successful if you’re planning to launch a competitor’s carbon copy.Both of these fall under the market research category of your business plan.Once you figure out who your competitors are, it will be easier to determine how your company will be different from them.Your company description can also incorporate your mission statement.This is an opportunity for you to gain a better understanding of your startup.