Planning Basics: Don't Forget Your
I was coaching a group of
entrepreneurs and came up against a
much too common scenario:
founding member of the group was
convinced his technology/product was
ready for market launch.
was, the group hadn't yet discussed
what and who the market was and
whether it was worth going after.
fall into the trap of being so
enamored with your idea, venture or
invention, that you forget to perform
a thorough market analysis. You
don't have to spend a lot of money on
fancy research (although at some point
you'll be wise to invest in some hard
data). Start by answering the
FIVE basic questions of a good Market
1 (Customer Value): Why
is someone going to buy your product?
problem will your product solve and
why would someone start using your
method/product/service versus what
they are doing right now? What
pain will you relieve? "Benefits"
are not enough! You must relieve
pain or solve a real problem! Customer
value is the key question to
answer first---AND be honest.
Don't bother with the rest of the
questions if you can't answer this
2 (Market Profile): What
type of organizations/persons/users
will buy your product?
I didn't say "use". Is
the user the same as the buyer?
Where is the buyer? How
many buyers are there?
Where are they located? What is
their current state? How will we get
this exercise you will arrive at a
number that represents the
3 (Market Size): How big is the market
for this product?
your estimated size of the market
(number of available buyers) times
your best estimate of a price for your
price must be based on reason:
how are comparable products priced?
What is the ROI of the product?
a figure for market size that
represents market size right now, and
also a future projection based on
trends that will impact market
characteristics and "buyer
this exercise you will calcuate your
market size and growth in terms
This is NOT your projected revenues or
4 (Market Share): What percentage of
the market will we have?
is the other question (besides
customer value) where entrepreneurs
lose their sense of reason.
this exercise by asking yourself
these key questions about "ramp
many of my products can I sell in year
1, year 2, year 3, year 4, and
year 5, based on my ability to: a)
build the product, b)educate the
user/buyer, c)approach the buyer,
d)close the sale, e)deliver the
product, and f)handle the
competitors also entering the market.
the temptation to take the short-cut
of: "if we only capture 1% of the
market, we'll be millionaires."
If it's that's easy to capture 1% of
the market you will have a million
your homework and work out a pro forma
sales projection for the first 5 years
to figure market share and
growth---and be sure to factor in the
5 (Competitive landscape): Why
will someone buy from us and not the
will you do that is different?
Will you compete on the basis of: a)
price, b) special features, or c)
will the competition say about your
product? What you will say to
a potential buyer about the
puhhleease don't say you have no
you can walk through these five
basic questions about your market
and create a defensible market plan,
you are well on your way to a
successful business plan.
Gaillour, MD, Business Consultant and Executive Coach for
Healthcare Leaders firstname.lastname@example.org,