From the course: Creating a Business Plan

Understand customers and trends

From the course: Creating a Business Plan

Understand customers and trends

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- Your business plan needs to spell out the major customer and market trends that you're going to face, and more importantly, how you're going to react to those trends. What are the major trends? Do they help you, or do they hurt you? Is the market growing? Is it flat? Is it shrinking? Is the market fragmented, or is it consolidated? And how are people behaving in that market? Are you seeing acquisitions? Are you seeing divestitures? Who makes the buying decisions from a customer standpoint? And are those patterns changing at all? Think through what other products and services do your customers want and need. Are there emerging trends where customers are asking for new things? Some of the sources for this information are things like market research, conducting focus groups, doing some competitive analysis. For my business, as an example, I run a training firm, and during recessions, one of the first things that gets cut from the budget is training, and that trend hurts us. The actions that we can take when we know we're going into a recession are we offset that by selling to more clients and we ramp up our business development activities. Now when the trend changes and there's a period of growth, companies invest a lot more in training, and that helps our business. Some of the actions we can take to take advantage of that trend are things like raising prices or driving more volume of courses. Some of the trends from a customer and buyer standpoint that we have to understand are our typical buyers are human resources or learning and development. But as businesses grow, those business unit leaders become more of the buyer because they're making the investment decisions, and we need to shift who we're selling to. So we understand the trend, and we react. We also think through during those growth periods what are the additional services and course topics that we can offer because there's demand coming from the market. For your business plan, articulate what the major trends are and the actions you're going to take either to offset the negative trends or take advantage of the positive ones.

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