Key Steps to Writing Your Business Plan Market Research Section

The business plan market research section isn’t where you make guesses. It’s where you demonstrate that you understand the environment you’re entering or operating in. If done properly, it shows potential backers you’ve done the groundwork, know your customers and your competitors, and understand how big the opportunity really is.

This guide breaks down what to include in this chapter, how to gather relevant data, and how to make your findings useful without overloading the reader. Whether you’re planning a new business or refining an existing one, this section helps support your decisions and future strategy.

Why Market Research Belongs in Your Business Plan

Investors and funders want evidence, and so should you. They want to see that your idea has a solid foundation, and that means tangible proof of demand, a thorough understanding of competitors, and extensive awareness of trends. Even if you’re bootstrapping or starting a business with no money, this section keeps you from building something no one wants.

Market research in a business plan helps you:

• Define your customer: Pinpoint who your ideal buyers are based on real characteristics like behaviour, needs, and location. This avoids vague targeting and keeps your marketing focused.
• Understand your competition: Know who else is offering similar products or services. Studying their strengths and weaknesses reveals where you can stand out.
• Measure your opportunity: Estimate the size of your potential market and your likely share within the first few years of operation. This helps you plan realistically, setting reasonable, meaningful, and achievable goals.
• Minimise risk and false assumptions: Use facts, not guesses, to guide your decisions. Market research grounds your business model in external evidence, not internal hopes.

It also feeds directly into pricing, marketing, and your financial forecasts later in the plan.

What to Include in Your Business Plan Market Research Section

A strong research section doesn’t have to be long, but it does have to be well-structured and include the following sections.

Industry Overview

Start by outlining the sector your business will operate in, including its core focus and boundaries. Describe whether the industry is expanding or contracting, and explain what’s driving that change. Support your statements with reliable data from sources like trade associations, government reports, or Eurostat’s extensive database.

Target Market

Define the specific customer groups your business intends to serve, based on demographic, geographic, or behavioural characteristics. Describe what matters to them and how they typically make buying decisions. Clear audience targeting ensures your product, messaging, and pricing stay relevant and effective, and it should align closely with your business description.

Market Size

Estimate the total size of your potential market using current data, and explain what proportion of that you can realistically expect to capture. Use conservative assumptions and explain your method and reasoning clearly. Moreover, having credible projections helps back up the revenue goals in your financial plan.

Competitor Analysis

Map out the key competitors in your space and analyse their positioning, strengths, and weaknesses. Use this to identify gaps you can fill or strategies you can improve on. This shows you’re entering the market with a clear understanding of what already exists.

Trends and Demand Drivers

Highlight important trends that are shaping your industry, such as changes in regulation, consumer preferences, or emerging technologies. Adapting your strategy to these shifts shows that your business idea is timely and relevant. For example, businesses paying attention to developments like AI search are already exploring ways to optimise visibility and respond to changing search behaviour.

Customer Research Insights

Summarise any original market research you conducted, including interviews, surveys, or early product tests. Briefly describe what methods you used and what patterns emerged. First-hand insights give your plan credibility and can reveal needs that are missing in data available to the general public, including your competitors.

Barriers to Entry and Regulatory Factors

Explain what legal, operational, or financial challenges could slow your entry into the market. This may include licensing, certifications, or dominant incumbents. Addressing these factors early also helps you plan mitigation strategies and can highlight areas where additional investment or expertise may be required.

How to Do Market Research for a Business Plan

While good business research is partly based on data collection, it’s also important to know where that data comes from and how to apply it. There are two types of research, known as primary and secondary, and each plays a different role in helping you build a grounded, useful view of your market. The insights you gather here also strengthen your business plan executive summary by giving it a factual backbone, rather than speculation.

• Primary research: This type of research involves gathering your own data. This could mean sending out a survey, running test ads, or conducting one-to-one interviews. For example, if you’re opening a bakery, speaking directly with people in your target area helps validate demand.
• Secondary research: This type uses data that already exists. Government stats, industry reports, and competitor websites are all fair game. Secondary research is often faster and cheaper, but less tailored to your exact needs.

Presenting Your Research Clearly

A strong market research section is only as effective as its presentation. Your findings should be easy to follow, logically ordered, and visually digestible. Instead of long blocks of text, use bullet points, subheadings, and short paragraphs to guide the reader through your key insights.

If your research includes substantial data, consider using charts or infographics to convey patterns or comparisons at a glance. This is particularly useful when showing survey results, growth rates, or competitor benchmarks. Keep in mind that everything included should link directly to your business idea, reinforcing your opportunity and strategy.

When referencing a business plan market analysis sample, make sure it stays relevant to your offering and sector. If you’ve developed detailed tables comparing product features or customer feedback, move them to the appendix and summarise the takeaways in the main body. Doing this keeps the narrative flowing while still demonstrating depth and preparation.

Making It Meaningful

The research section shouldn’t just describe the market. It should lead to conclusions that inform your strategy and support your decisions. Each insight you present should help explain what you’re doing and why you’re doing it now.

• Timing Matters: Highlight any evidence that this is the right moment to launch or grow. That could be market growth, shifts in technology, or unmet customer demand that your business addresses directly.
• Strategic Advantage: Use your research to explain what makes your approach better, smarter, or more focused than what already exists. If you’re targeting a niche audience or solving a neglected problem, make that clear.
• Assumptions and Risks: Spell out the key assumptions behind your plan and why you believe they’re valid. If your pricing, marketing, or growth projections depend on certain behaviours, show how your data supports those expectations.
• Early Traction and Signals: If you’ve had test sales, survey feedback, or strong engagement, include that here. It helps show that there’s already interest, and it makes your forecasts more believable.

This is where strategy begins to form. In addition to understanding the market, research is about turning that understanding into focused, confident decisions.

Final Thoughts

Your business plan market research section shows that your idea isn’t built on hopes or hunches. It proves you’ve looked outward before building inward. Real businesses understand the people they’re serving and the environment they’re entering.

Make this section sharp, well-sourced, and insightful. It will inform everything that follows, including pricing, marketing, and financials. It will also give readers the confidence that you’re building with your eyes open.

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