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How to Write the Market Analysis Section of a Business Plan

Alyssa Gregory is an entrepreneur, writer, and marketer with 20 years of experience in the business world. She is the founder of the Small Business Bonfire, a community for entrepreneurs, and has authored more than 2,500 articles for The Balance and other popular small business websites.

list the different analysis parts of a business plan paper

The market analysis section of your business plan comes after the products or services section and should provide a detailed overview of the industry you intend to sell your product or service in, including statistics to support your claims.

In general, the market analysis section should include information about the industry, your target market, your competition, and how you intend to make a place for your own product and service. Extensive data for this section should be added to the end of the business plan as appendices, with only the most important statistics included in the market analysis section itself.

What Should a Market Analysis Include?

The market analysis section of your small business plan should include the following:

7 Tips for Writing a Market Analysis

Here is a collection of tips to help you write an effective and well-rounded market analysis for your small business plan.

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Business Plan Example and Template

Learn how to create a business plan

What is a Business Plan?

A business plan is a document that contains the operational and financial plan of a business, and details how its objectives will be achieved. It serves as a road map for the business and can be used when pitching investors or financial institutions for debt or equity financing .

Business Plan

A business plan should follow a standard format and contain all the important business plan elements. Typically, it should present whatever information an investor or financial institution expects to see before providing financing to a business.

Contents of a Business Plan

A business plan should be structured in a way that it contains all the important information that investors are looking for. Here are the main sections of a business plan:

1. Title Page

The title page captures the legal information of the business, which includes the registered business name, physical address, phone number, email address, date, and the company logo.

2. Executive Summary

The executive summary is the most important section because it is the first section that investors and bankers see when they open the business plan. It provides a summary of the entire business plan. It should be written last to ensure that you don’t leave any details out. It must be short and to the point, and it should capture the reader’s attention. The executive summary should not exceed two pages.

3. Industry Overview

The industry overview section provides information about the specific industry that the business operates in. Some of the information provided in this section includes major competitors, industry trends, and estimated revenues. It also shows the company’s position in the industry and how it will compete in the market against other major players.

4. Market Analysis and Competition

The market analysis section details the target market for the company’s product offerings. This section confirms that the company understands the market and that it has already analyzed the existing market to determine that there is adequate demand to support its proposed business model.

Market analysis includes information about the target market’s demographics , geographical location, consumer behavior, and market needs. The company can present numbers and sources to give an overview of the target market size.

A business can choose to consolidate the market analysis and competition analysis into one section or present them as two separate sections.

5. Sales and Marketing Plan

The sales and marketing plan details how the company plans to sell its products to the target market. It attempts to present the business’s unique selling proposition and the channels it will use to sell its goods and services. It details the company’s advertising and promotion activities, pricing strategy, sales and distribution methods, and after-sales support.

6. Management Plan

The management plan provides an outline of the company’s legal structure, its management team, and internal and external human resource requirements. It should list the number of employees that will be needed and the remuneration to be paid to each of the employees.

Any external professionals, such as lawyers, valuers, architects, and consultants, that the company will need should also be included. If the company intends to use the business plan to source funding from investors, it should list the members of the executive team, as well as the members of the advisory board.

7. Operating Plan

The operating plan provides an overview of the company’s physical requirements, such as office space, machinery, labor, supplies, and inventory . For a business that requires custom warehouses and specialized equipment, the operating plan will be more detailed, as compared to, say, a home-based consulting business. If the business plan is for a manufacturing company, it will include information on raw material requirements and the supply chain.

8. Financial Plan

The financial plan is an important section that will often determine whether the business will obtain required financing from financial institutions, investors, or venture capitalists. It should demonstrate that the proposed business is viable and will return enough revenues to be able to meet its financial obligations. Some of the information contained in the financial plan includes a projected income statement , balance sheet, and cash flow.

9. Appendices and Exhibits

The appendices and exhibits part is the last section of a business plan. It includes any additional information that banks and investors may be interested in or that adds credibility to the business. Some of the information that may be included in the appendices section includes office/building plans, detailed market research , products/services offering information, marketing brochures, and credit histories of the promoters.

Business Plan Template

Business Plan Template

Here is a basic template that any business can use when developing its business plan:

Section 1: Executive Summary

Section 2: Industry Overview

Section 3: Market Analysis and Competition

Section 4: Sales and Marketing Plan

Section 5: Management Plan

Section 6: Operating Plan

Section 7: Financial Plan

Section 8: Appendices and Exhibits

Related Readings

Thank you for reading CFI’s guide to Business Plans. To keep learning and advancing your career, the following CFI resources will be helpful:

list the different analysis parts of a business plan paper

How to Write a Business Plan Outline [2022 Guide & Format]

list the different analysis parts of a business plan paper

When starting a business, having a well-thought-out business plan prepared is necessary for success. It serves as the foundation of your business, helps guide your strategy, and prepares you to overcome the obstacles and risks associated with entrepreneurship. In short, a business plan makes you more like to succeed.

However, like everything in business, starting is often the hardest part. What information do you need? How in-depth should each section be? How should the plan be structured?

All good questions that you can answer by following this business plan outline. 

What is a business plan outline?

Starting with a business plan outline helps ensure that you’re covering all of the necessary information to complete your plan. A traditional business plan typically includes—an executive summary, an overview of your products and services, thorough market and industry research, a marketing and sales strategy, operational details, financial projections, and an appendix. 

Depending on what you intend to do with your plan, you may not need all of this information right away. If you’re going to speak with investors or pursue funding, then yes, you’ll need to include everything from this outline. But, if you’re using your plan to test an idea or help you run your business, you may want to opt for a lean plan. This is a simpler and faster method that is designed to be updated and used day-to-day. 

If you’re unsure of which plan is right for you, check out our guide explaining the differences and use cases for each . 

What are the 7 essential parts of a business plan?

No matter the type of business plan you create, these are the seven basic sections you should include. Be sure to download your free business plan template so that you can start drafting your own plan as you work through this outline.

1. Executive summary

While it may appear first, it’s best to write your executive summary last. It’s a brief section that highlights the high-level points you’ve made elsewhere in your business plan.

Summarize the problem you are solving for customers, your solution, the target market, the founding team, and financial forecast highlights. Keep things as brief as possible and entice your audience to learn more about your company. 

Keep in mind, this is the first impression your plan and business will make. After looking over your executive summary, your target reader is either going to throw your business plan away or keep reading. So make sure you spend the time to get it just right.

2. Product and services

This is really the opportunity section of your business plan, with the products and services being how you plan to take advantage of the opportunity. You’ll need to describe the problem that you solve for your customers and the solution that you are selling. 

Lastly, if there are any major competitive products or services already in the market, it may be valuable to mention them here. Detail how you differ, what your strengths and weaknesses are in comparison, and how you’ll differentiate from what is already available. If you have any intellectual property or patents that help strengthen your position list them here as well.

3. Market analysis 

You need to know your target market —the types of customers you are looking for—and how it’s changing, and your market analysis summary will help you get clear on it. 

Use this business plan component to discuss your customers’ needs, where your customers are, how to reach them and how to deliver your product to them.

You’ll also need to know who your competitors are and how you stack up against them—why are you sure there’s room for you in this market?

4. Marketing and sales

Use this business plan section to outline your marketing plan, your sales plan, and the other logistics involved in actually running your business.

You’ll want to cover your sales channels, broad marketing activities, your pricing strategy, as well as your intended market position. This will likely evolve over time, but it’s best to include anything that clearly details how you will sell and promote your products and services. 

5. Organization and management

The company and management section is an overview of who you are.

It should describe the organization of your business, and the key members of the management team . It should also provide any historical background about your business. When your company was founded, who is/are the owner(s), what state your company is registered in and where you do business, and when/if your company was incorporated for example.

Be sure to include summaries of your managers’ backgrounds and experience—these should act like brief resumes—and describe their functions with the company. You should also include any professional gaps you intend to fill, as well as projected milestones for your business.

6. Financial projections and metrics

At the very least this section should include your projected sales forecast , profit and loss , cash flow projections, and balance sheet , along with a brief description of the assumptions you’re making with your projections.

Finally, if you are raising money or taking out loans, you should highlight the money you need to launch the business. This part should also include a use of funds report—basically an overview of how the funding will be used in business operations. 

And while it’s not required, it may be wise to briefly mention your exit strategy. This doesn’t need to be overly detailed, just a general idea of how you may eventually want to exit your business. 

7. Appendix

The end of your business plan should include any additional information to back up specific elements of your plan. More detailed financial statements, resumes for your management team, patent documentation, credit histories, marketing examples, etc. Basically, include anything that can promote your credibility as a business owner.

Free business plan template

Business plan outline template

If you’re looking for greater insight into what goes into specific planning sections, check out the following outline. It can help you develop a detailed business plan or provide guidance as to what may be missing in your current plan. 

Keep in mind that each business plan will look different depending on numerous factors , including the type of business and what you will be using the plan for. Consider the following outline to be a master version to reference and consider. Just be sure to focus on the plan type and sections that are most beneficial to your business, pitch, or overall strategic planning .

1.0 Executive Summary

1.1 problem.

A summary of the problem you are solving and an identifiable need in the market you are filling.

1.2 Solution

A description of the product or service you will provide to solve the problem.

1.3 Target Market

A defined customer base who will most likely purchase the product or service. For info on how to define your target market, check out our guide on the subject.

1.4 Competition

The current alternatives or substitutes in the market that you and your business will be competing against.

1.5 Financial Summary

Key highlights of your financial plan that covers costs, sales, and profitability.

1.6 Funding Requirements

A brief outline of the amount of money you will need to start your business. Include this if you plan on pitching to investors. 

1.7 Milestones and Traction

A roadmap of where you currently are and specific milestones you plan to hit.

2.0 Product and services

2.1 problem worth solving.

A thorough description of the problem or pain point you intend to solve for your customer base. 

2.2 Our Solution

A thorough description of your proposed product or service that alleviates the problem of your customer base.

2.3 Validation of Problem and Solution

Any data or relative information that supports your solution. If you’ve already run tests that verify your idea , this is the place to include your results.

2.4 Product Overview

A description of your product and/or service that explains what it does, who its for, and how it benefits your customers.

2.5 Competition

Any information explaining current competitive offerings and how your product differs from them.

2.6 Roadmap/Future Plans

A list of steps taken so far, along with an outline of steps you plan to take in establishing or growing your business.

3.0 Market Analysis 

3.1 market segmentation.

Potential groups of customers separated by specific characteristics.

3.2 Target market segment strategy

Your ideal customer who would most likely benefit from your business.

3.2.1 Market needs

A description of how your target market is not effectively served and how your business fulfills a need.

3.2.2 Market trends

How consumers in your target market tend to act including purchasing habits, financial trends, and any other relevant factors.

3.2.3 Market growth

The perceived potential increase or decrease in the size of your target market.

3.3 Key customers

Your ideal customer archetype who will be the main advocate for your business.

3.4 Future markets

A snapshot of the potential market based on the last few sections and how your business strategy works within it.

3.5 Competition

A list of potential competitors. Identifying the competition isn’t always obvious and it may take some digging on your part .

3.5.1 Competitors and alternatives

A list of potential indirect competitors that provide products or services that are alternatives to your business.

3.5.2 Competitive advantage 

The strategic advantage(s) that makes your target market more likely to choose you over the competition. 

4.0 Marketing and Sales

4.1 marketing plan.

An outline of your marketing and advertising strategy including costs, advertising channels, and goals.

4.2 Sales plan

An estimate of the number of sales you anticipate based on market conditions, capacity, pricing strategy, and other factors.

4.3 Location and facilities

Details of your physical business location (if necessary) including location and costs of operation.

4.4 Technology

An explanation of any new technology that defines your business.

4.5 Equipment and tools

Any required production equipment or tools and the cost associated with purchasing or renting them.

5.0 Organization and management

5.1 organizational structure.

An overview of the structure of your business including roles and responsibilities of specific employees and the flow of information between levels of the organization.

5.2 Management team

A list of potential candidates you anticipate taking on high-level management roles within your company.

5.3 Management team gaps

Any positions or areas of expertise that you currently do not have candidates ready to fill those roles.

5.4 Personnel plan

A list of potential positions that you expect to require in order to run your business effectively.

5.5 Company history and ownership

A summary of your company’s history and how it relates to planning your business.

5.6 Milestones

A detailed roadmap of specific goals and objectives you plan to achieve that will help you manage and steer your business.

5.7 Key metrics

Performance measurements that help you gauge the overall performance and health of your business.

6.0 Financial projections and metrics

Standard financial documentation that showcases the current and projected health of your business.

6.1 Revenue and sales forecast

Expected revenue and sales for the next 1-3 years, broken down into month-by-month increments for at least the first year.

6.2 Expenses

Expected or incurred costs necessary to start and operate your business.

6.3 Projected profit and loss

How much money you will bring in by selling products and/or services and how much profit you will make or lose after accounting for production costs.

6.4 Projected cash flow

Money that is expected to cycle in and out of your business. This can also include your overall cash position and cash runway.

6.5 Projected balance sheet

Expected balances for business assets, liabilities, and equity.

6.6 Personnel plan

Outline of how and who you intend to hire, what compensation will be, and how employees will fit into business operations.

6.7 Use of funds

Explanation of how funds were or will be used. This is typically meant to be shared with investors or lenders.

6.8 Exit strategy

A brief description of how you intend to eventually exit from your business. Acquisition, selling, passing along to a family member/employee, etc.

7.0 Appendix

A repository for any additional information , including charts and graphs, to support your business plan.

How to organize your business plan

There’s no real established order to business plans, aside from keeping the Executive Summary at the top. As long as you have all of the main business plan components, then the order should reflect your goals . 

If this is meant solely for your personal use, lay it out as a roadmap with similar sections grouped together for easy reference. If you’re pitching this to potential investors, lead with the stronger sections to emphasize the pitch. Then if you’re unsure of what order makes sense, then just stick to the outline in this article.

Should you include tables and charts in your business plan?

Every business plan should include bar charts and pie charts to illustrate the numbers. It’s a simple way for you, your team, and investors to visualize and digest complex financial information.

Cash flow is the single most important numerical analysis in a business plan, and a standard cash flow statement or table should never be missing. Most standard business plans also include a sales forecast and income statement (also called profit and loss), and a balance sheet .

How long should your business plan be?

There’s no perfect length for a business plan . A traditional business plan can be anywhere from 10 to 50 pages long depending on how much detail you include in each section. However, as we said before unless you intend to pursue funding, you likely don’t need a lengthy business plan at first.

Instead, you can start with a lean plan that can be completed in as little as 30-minutes. This one-page business plan is designed to help you get the core information down about your business. It encourages you to focus on your financials and functions moreso as a long-term management tool that’s easy to review and update regularly. 

So, if you’re pursuing funding check out our full guide on how to write a traditional business plan . If you’re looking for a faster, easier, and more effective long-term planning method, check out this guide from LivePlan on how to write a lean plan in under an hour .

Tim BerryTim Berry

Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry .

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COMMENTS

  1. Write your business plan

    If your business is already established, include income statements, balance sheets, and cash flow statements for the last three to five years. If you have other collateral you could put against a loan, make sure to list it now. Provide a prospective financial outlook for the next five years. Include forecasted income statements, balance sheets ...

  2. How to Write the Market Analysis in a Business Plan

    The market analysis section of your small business plan should include the following: Industry Description and Outlook: Describe your industry both qualitatively and quantitatively by laying out the factors that make your industry an attractive place to start and grow a business.

  3. Business Plan

    Here are the main sections of a business plan: 1. Title Page The title page captures the legal information of the business, which includes the registered business name, physical address, phone number, email address, date, and the company logo. 2. Executive Summary

  4. How to Write a Business Plan Outline [2022 Guide & Format]

    A traditional business plan typically includes—an executive summary, an overview of your products and services, thorough market and industry research, a marketing and sales strategy, operational details, financial projections, and an appendix. Depending on what you intend to do with your plan, you may not need all of this information right away.