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Market analysis for equity crowdfunding. Find out how to structure it for your business plan

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Analisi di mercato

Indice

The market analysis is an essential tool for any company that decides to start a new business: it serves to delimit the perimeter of action and to identify potentials and threats for the project.

Making a good market analysis is also a very important step for the development of the business plan, i.e., the document through which the company will be able to illustrate to potential investors how it intends to approach the market, what its growth forecasts are and what investments it intends to make.

The market analysis is therefore the preliminary element to the construction of the business plan, as it allows us to frame the context in which we are going to move and to provide an initial assessment of the chances of success of our business idea.

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The business plan for equity crowdfunding

Before going into the specifics of the market analysis, we would like to dwell for a few moments on the creation of the business plan.

As we have said, the business plan is the general document through which the company presents its business idea and provides scenario data and analysis to support its project.

For all business plans, there are some fundamental parts that describe the life cycle of our product or our future company, starting from the conception up to the launch, distribution and management of the mature product with a projection of the expected returns.

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The macro-areas of the business plan

Let’s take a look at the four macro-areas that will make up the business plan and that will intersect with the market analysis.

Business idea.

At this stage, the business plan must highlight the creative drive that led us to come up with the idea of launching our product or our company and, together with it, what we think are the characteristics of our business that can make us have a positive response on the market. In order to do this, market research is certainly the best tool to capture the potential of our project.

Identify a mission and a vision.

These are not the abstract concepts of visionary entrepreneurs, but two pillars of the company structure. Having a mission means having a precise aim to pursue and goals that can be outlined, explained and measured. Having a vision tells us how we want to achieve our results and what values will guide us in the development of our publishing project.

Having a clear mission and vision will help us to identify and choose our management team, assigning key roles to people who share our objectives and values. In fact, the choice of management is also a very important point to make explicit in the business plan because it makes our idea concrete and personified.

Project development.

In this part of the business plan, we must detail how we imagine structuring our company or how we plan to reinforce existing internal structures in order to meet the challenges of the new project. In this part of the business plan, we will detail the investments in terms of means and people that we intend to make.

Processes and go-to-market.

Once the company functions and management that will lead the project have been identified, the business plan must describe the new business management processes and the go-to-market actions. In particular, the activities related to marketing, communication and any investments in advertising should be detailed.

For equity crowdfunding projects it will also be necessary to dedicate a specific section of the business plan to the aspect of the financial request in order to explain the objectives of the collection and the methods of using the funds obtained.

Structuring the market analysis

As we have seen, the market analysis is an essential component of the business plan, acting both as a premise and a rudder in the drafting of the whole project development plan. Also, in this case, it is possible to identify specific components that will define the market analysis as a whole. Let us see them together.

Preliminary research

Knowing the context in which we are going to operate is essential. For this, we will need precise and structured data on our market and the experiences of our competitors in order to have benchmarks.

It is very important not only to collect contextual information but also to ensure the reliability of the data collected. Verification of sources is therefore essential. We are not just talking about expensive market research that not all companies, especially young ones, can afford. Certified data can come from Chambers of Commerce, from the published balance sheets of listed companies, from databases, or from ISTAT or other research institutes that periodically release this type of information.

Market analysis: define the target

After describing the macro scenario in which the company will operate, it is necessary to define who the company and the product will address.

Who will buy our product? This is the most important question to ask and to try to answer as precisely as possible.

In marketing, we often hear about the buyer persona, i.e., the typical buyer of our product. This is, in fact, a description of the essential characteristics of what we imagine our typical customer to be. Of course, the product does not necessarily have to address just one prototype customer, in which case it will be necessary to identify all types of potential customers and segment them in order to imagine reaching them with differentiated and targeted actions.

In creating the image of our client, we will certainly have to start from socio-demographic information: is he a man or a woman? How old is he or she? Where does he/she live? What is his or her income?

But this information alone is not enough. Very important will be to be able to outline what are the lifestyles and consumption patterns. For example, we could ask whether our potential client is a technology enthusiast, plays sports, has children or loves animals, lives in a rented or owned house, what he does in his free time, how he gets around, etc. The questions are potentially endless, but the more we can answer them, the more we will be able to find out.

The questions are potentially endless, but the more we can go into detail, the more we will be able to adapt our product to the specific needs of consumers, and thus have a market.

Furthermore, the correct profiling of our target audience will be essential when planning the advertising communication in order to minimise the dispersion of the message and to be sure of hitting exactly the audience segment, we are looking for.

Competition analysis

Once the context has been defined and the target audience(s) identified, the market analysis should focus on studying the competition.

In order to carry out a complete market analysis, it is necessary to provide potential investors with an overview of our competitors, highlighting how our company and our product will differ from them in order to gain market share.

In this sense, it is advisable to focus not only on direct competitors, i.e., those who offer a similar product to ours but also on indirect competitors, i.e., alternative product proposals that might satisfy our customers’ needs in a different way.

In drawing up the competition study for our market analysis, we will then have to highlight the strengths and weaknesses of our competitors and, consequently, any barriers to entry in the reference sector or, on the contrary, possible opportunities to fill the gaps left by our competitors.

Once we have defined the three main components of our market analysis (scenario, target, competition), all we have to do is put it all down on paper and integrate it into our business plan.

In order to maximise the effectiveness of our analysis in the business plan, it is always important to present the most relevant and useful information for investors in order to grasp the essential aspects, referring to any subsequent in-depth analysis for detailed aspects. On the other hand, it may be useful to accompany the market analysis with graphs and infographics that can facilitate the understanding of a set of information expressed only in text form.

SCAI Comunicazione is an agency specialised in equity crowdfunding, discover the world of marketing and communication services that we can provide for your company.

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