As with any business plan, a bank business plan will have an extensive section on market research. Market Research is always important to understanding your customers and where your business and products or services fit among competition. It should always be a part of a business plan but, will be especially scrutinized in an investor or a bank business plan. So, what questions does market research answer and what does a full market analysis entail?
Questions Market Research Answers
Once you have completed and analyzed your market research for your Bank Business Plan, you should be able to answer the following questions, among others.
Is there a genuine demand for your product or services?
How many people would be interested in what you are offering?
What are the economic indicators such as revenue range, employment rates, etc.?
What location will you focus on; where do your potential clients live and how do you reach them?
How much competition is there; are others already offering what I offer?
How does the product/service differ from that of others?
- What do customers of competitors pay for similar products?
Market Research Sections
Once your research has answered the questions above, you will then organize this information into a market analysis section in your Business Plan. Each section will address specific aspects of the industry and market.
Industry Overview – A brief overview of the overall industry in which your business operates as well as expected short- and long-term trends.
Market Research Testing – A description of what Market Research methods were used to gather the industry and market information presented for your bank business plan.
Target Market(s) – This is where you identify your specific customers with some specificity. This typically includes general demographics like location, age, gender, interests and the like.
Market Need – This section addresses what need the business is filling as well as how much of a need there is.
Market Trends – Addressing what is trending in the market right now and how is this expected to change as time goes on. It should also include how the business intends to address these trends.
Competitive Analysis – A description of the main competitors and how your company and products fit in the overall landscape.
Barriers to Entry – This isn’t always its own section in a bank business plan depending on what barriers exist. You may simply, in an earlier section, write that there are no or limited barriers to entry unless there are some that are worth noting and require specific attention.
Regulations – This also may not have its own section in your bank business plan. It will depend on whether or not it’s material to your business and market.
The best business idea in the world cannot be successful if you don’t explore and address these important questions that market research answers as well as the sections in the Bank Business Plan it informs. That is why it is important to not only conduct market research but, to understand its importance and its role in the overall business plan. It is one of the many tools that will help create a solid bank business plan and pave the way for business success.
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