Analyzing Customers in Your Business Plan

Written by Dave Lavinsky

The Customer Analysis section ofrepparttar business plan assessesrepparttar 145741 customer segments thatrepparttar 145742 company serves. In it,repparttar 145743 company must 1) identify its target customers, 2) conveyrepparttar 145744 needs of these customers, and 3) show how its products and services satisfy these needs.

The first step ofrepparttar 145745 Customer Analysis is to define exactly which customersrepparttar 145746 company is serving. This requires specificity. It is not adequate to sayrepparttar 145747 company is targeting small businesses, for example, because there are several million of these types of customers. Rather,repparttar 145748 plan must identify preciselyrepparttar 145749 customers it is serving, such as small businesses with 10 to 50 employees based in large metropolitan cities onrepparttar 145750 West Coast.

Oncerepparttar 145751 plan has clearly identified and definedrepparttar 145752 company’s target customers, it is necessary to explainrepparttar 145753 demographics of these customers. Questions to be answered include: 1) how many potential customers fitrepparttar 145754 given definition? is this customer base growing or decreasing? 2) what isrepparttar 145755 average revenues/income of these customers? and 3) where are these customers geographically based?

After explaining customer demographics,repparttar 145756 plan must detailrepparttar 145757 needs of these customers. Conveying customer needs could takerepparttar 145758 form of past actions (X% have purchased a similar product inrepparttar 145759 past), future projections (when interviewed, X% said that they would purchase product/service Y) and/or implications (because X% use a product/service which our product/service enhances/replaces, then X% need our product/service).

Why You Need a Business Planning System NOT a Business Plan

Written by David Coffman

Copyright 2005 David Coffman

When someone mentions business planning we have been conditioned to think about writing a business plan. There are hundreds of books and articles, tons of software, an army of consultants, and a multitude government programs to help you write a business plan. There are virtually no resources to help you set up what today’s business environment really demands – a continuous, ongoing planning system.

A commonly accepted theory is that for a business to survive and prosper it must be flexible and nimble. It must be able to turn on a dime as conditions warrant. Having a written five-year plan is not part of this picture. In fact, trying to follow a long-term plan during rampant change is not logical. It is applying linear thinking to a non-linear situation. It just doesn’t work.

Having a formal, written business plan is so accepted as being crucial to success that there haven’t been many studies or surveys to test this premise. If business plans were such a wonderful thing, there would be a significant and conclusive difference between businesses that have them and those that don’t. Interviews of 100 founders of companies on 1989s “INC 500” list of fastest growing private companies inrepparttar U.S. found only 28 percent had “full-blown” business plans. The 1993 AT&T Small Business Study found that 59 percent of small businesses that grew overrepparttar 145715 previous two years used a formal business plan. A 1994 survey ofrepparttar 145716 country’s fastest growing companies found 23 percent lacked a business plan. “The Relationship between Written Business Plans andrepparttar 145717 Failure of Small Businesses inrepparttar 145718 U.S.,” by Dr. Stephen Perry, surveyed 152 failed and 152 non-failed small businesses in 1997. He found that 64 percent ofrepparttar 145719 non-failed firms had no written business plan. He also found that non-failed firms had more extensive written plans than failed firms, 23 percent compared to 9 percent, respectively.

As you can seerepparttar 145720 results of studies and surveys are all acrossrepparttar 145721 board and don’t prove anything. Clearly, a significant percentage of successful businesses don’t have written business plans. None of these studies revealrepparttar 145722 nature ofrepparttar 145723 process that createdrepparttar 145724 plan. Was itrepparttar 145725 result of an annual process with occasional updates or an ongoing, continual process? As Professor Albert Shapero said, “Companies that plan do better than companies that don’t, but they never follow their plan.”

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