Have you ever tried to complete a puzzle without knowing what the final picture is supposed to look like? In business planning, market research is one of the ways you are able to view the full picture of the business puzzle. It is for this reason that Market Research can have a significant impact on your business plan, especially a bank business plan.
When creating a bank business plan, the most important thing to keep in mind is your audience. A bank loan officer’s primary objective is to determine if you are going to be able to pay back your loan. Your market research will help them make this determination in a variety of ways.
Market Research Shows You Are Prepared
One thing that allows great business plans to stand out from good business plans is your market research. Market research is arguably one of the most difficult parts of the business plan to complete.
When you have thorough market research, with information from trusted and reliable sources, it shows you have truly done your due diligence. By association, this will help to legitimize and validate the rest of the Bank Business Plan as well.
Market Research Creates Cohesion in Your Business Plan
Reflecting back on the opening paragraph here, market research is what helps paint the picture for the entire bank business plan. It helps shape the potential for the full plan. It also helps pinpoint the micro aspects.
When your market research is done thoroughly, it helps inform all aspects of the business plan. It will – or at least should – be mentioned in nearly every section of the plan whether directly or indirectly. It becomes an underpinning aspect of your plan that helps tie all the decisions you make together.
Determining the size of the total market and reviewing your competitors give you a sense of your overall market potential. It allows you to pinpoint your niche markets. It helps you plan for how many people you will need to hire. It informs if you hire them locally or outsources. It tells you how much expenses are likely to cost. The list goes on.
Validates Your Financial Assumptions
Last but certainly not least is the impact of market research on the financials. The Financial Projections are undoubtedly one of the most important aspects to the loan officer. This is where they get the chance to determine if you are likely to have the cash flow to meet your loan repayment terms.
Your market research will give them an indication if your financial assumptions are reasonable and achievable. This then gives validity to the rest of the numbers. While other factors like your personal credit or prior business success will weigh in heavily, good market research can help tip the decision in your favor.
There are few parts of the business planning process that are as vital as the Market Research. If you’re unsure about how to conduct this research, don’t be afraid to look to professionals for assistance. Knowing the impact it can have, it is well worth the investment.
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