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Developing a Business Plan

Developing a Business Plan

An important task in starting a new venture is to develop a business plan. As the phrase suggests, a business plan is a "road map" to guide the future of the business or venture. The elements of the business plan will impact the daily decisions of the business and provide direction for expansion, diversification, and future evaluation of the business.

This publication will assist in drafting your own business plan. It includes a discussion of the makeup of the plan and the information needed to develop a business plan. Business plans are traditionally developed and written by the owner with input from family members and the members of the business team. Business plans are "living" documents that should be reviewed and updated every year or if an opportunity for change presents itself. Reviews reinforce the thoughts and plans of the owner and the business and are a key item in the evaluation process. For an established venture, evaluation determines if the business is in need of change or if it is meeting the expectations of the owners.

Using the Proper Format

The format and appearance of the plan should be as professional as possible to portray your business in a positive manner. When dealing with a lender or possible investor, the plan will be reviewed for accuracy and suggestions for changes to the plan may be offered. The decision to recommend a loan for approval will be largely based on your business plan. Often loan officers will not know a great deal about the proposed venture, but they will know the correct structure of a business plan.

Investors will make their decision based on the plan and the integrity of the owner. For this reason, it is necessary to use a professional format. After loan officers complete their evaluations, the loan committee will further review the business plan and make a decision. The committee members often spend limited time reviewing the document, focusing on the message of the executive summary and financial statements to make their determination. They will refer to other sections of the plan for details and clarification. Because of this, these portions need to be the strongest parts of the plan and based on sound in-depth research and analysis.

Sections of the Business Plan

A business plan should be structured like a book with the title or cover page, followed by a table of contents. Following these two pages, the body of the plan normally appears in this order: executive summary, business mission statement, goals and objectives, background information, organizational matters, marketing plan, and financial plan.

Executive Summary

The executive summary is placed at the front of the business plan, but it should be the last part written. The summary should identify the type of business and describe the proposed business, or changes to the existing business. Research findings and recommendations should be summarized concisely to provide the reader with the information required to make any decisions. The summary outlines the direction and future plans or goals of the business, as well as the methods that will be used to achieve these goals. The summary should include adequate background information to support these recommendations.

The final financial analysis and the assumptions used are also a part of the executive summary. The analysis should show how proposed changes will ensure the sustainability of the current or proposed business. All challenges facing the existing business or proposed venture should be discussed in this section. Identifying such challenges shows the reader that all possibilities have been explored and taken into account during the research process.

Overview, Mission, and Goals and Objectives

This section has three separate portions. It begins with a brief overview that includes a general description of the existing or planned business. The overview is followed by the mission statement of the business. You should try to limit the mission statement to three sentences if possible and include only the key ideas about why the business exists. An example of a mission statement for a produce farm might be: The mission of XYZ Produce is to provide fresh, healthy produce to our customers, and to provide a safe, friendly working environment for our employees. If you have more than three sentences, you should be as concise as possible.

The final portion sets the business's goals and objectives. There are at least two schools of thought about goals and objectives. Goals and objectives should show the reader what the business wishes to accomplish, and the steps needed to obtain the desired results. Conducting a SWOT analysis will assist your team when developing goals and objectives. SWOT in an acronym for Strengths, Weaknesses, Opportunities, and Threats and is covered more in-depth later in the publication. You may want to include marketing topics in the SWOT or conduct two SWOT analyses, one for the entire business and one for the marketing plan.

Goals should follow the acronym DRIVE, which stands for D irectional, R easonable, I nspiring, V isible, and E ventual. The definitions of DRIVE are:

  • Directional: It should guide you to follow your vision.
  • Reasonable: You should be able to reach the goal, and it should be related to your business.
  • Inspiring: Make sure the goal is positive but should challenge the business to grow into the goal.
  • Visible: You and your employees should be able to easily recognize the goal. Goals should be posted where everyone sees them every day.
  • Eventual: The goals should focus on the future and be structured to provide motivation to all to strive towards the goals.

Objectives should follow the acronym SMART, which stands for S pecific, M easurable, A ttainable, R ewarding, and T imed. Objectives are the building blocks to achieve the goals and stand for:

  • Specific: Each objective should focus on one building block to reach the goal.
  • Measurable: You should be able to determine if your progress is going in the right direction.
  • Attainable: You should be able to complete the objective with an appropriate amount of work.
  • Rewarding: Reaching the objective should be something to celebrate and provide positive reinforcement to the business.
  • Timed: You must have a deadline for the objective to be achieved. You do not want to have the objectives linger for too long. Not reaching the objectives delays reaching the goals. Not achieving goals is detrimental to the morale of the business.

Goals and objectives should follow these formats to allow for evaluation of the entire process and provide valuable feedback along the way. The business owner should continually evaluate the outcomes of decisions and practices to determine if the goals or objectives are being met and make modifications when needed.

Background Information

Background information should come from the research conducted during the writing process. This portion should include information regarding the history of the industry, the current state of the industry, and information from reputable sources concerning the future of the industry.

This portion of the business plan requires the most investment of time by the writer, with information gathered from multiple sources to prevent bias or undue optimism. The writer should take all aspects of the industry (past, present, and future) and business into account. If there are concerns or questions about the viability of the industry or business, these must be addressed. In writing this portion of the plan, information may be obtained from your local public library, periodicals, industry personnel, trusted sources on the Internet, and publications such as the Penn State Extension Agricultural Alternatives series . Industry periodicals are another excellent source of up-to-date information. The more varied the sources, the better the evaluation of the industry and the business, and the greater the opportunity to have a viable plan.

The business owner must first choose an appropriate legal structure for the business. The business structure will have an impact on the future, including potential expansion and exit from the business. If the proper legal structure is not chosen, the business may be negatively impacted down the road. Only after the decision is made about the type of business can the detailed planning begin.

Organizational Matters

This section of the plan describes the current or planned business structure, the management team, and risk-management strategies. There are several forms of business structure to choose from, including sole proprietorship, partnership, corporations (subchapter S or subchapter C), cooperative, and limited liability corporation or partnership (LLC or LLP). These business structures are discussed in Agricultural Alternatives: Starting or Diversifying an Agricultural Business .

The type of business structure is an important decision and often requires the advice of an attorney (and an accountant). The business structure should fit the management skills and style(s) of the owner(s) and take into account the risk management needs (both liability and financial) of the business. For example, if there is more than one owner (or multiple investors), a sole proprietorship is not an option because more than one person has invested time and/or money into the business. In this case a partnership, cooperative, corporation, LLC, or LLP would be the proper choice.

Another consideration for the type of business structure is the transfer of the business to the next generation or the dissolution of the business. There are benefits and drawbacks for each type of structure covering the transition of ownership. If the business has a high exposure to risk or liability, then an LLC might be preferred over a partnership or sole proprietorship.

If the business is not a sole proprietorship, the management team should be described in the business plan. The management team should consist of all parties involved in the decisions and activities of the business. The strengths and backgrounds of the management team members should be discussed to highlight the positive aspects of the team. Even if the business is a sole proprietorship, usually more than one person (often a spouse, child, relative, or other trusted person) will have input into the decisions, and so should be included as team members.

Regardless of the business structure, all businesses should also have an external management support team. This external management support team should consist of the business's lawyer, accountant, insurance agent or broker, and possibly a mentor. These external members are an integral part of the management team. Many large businesses have these experts on staff or on retainer. For small businesses, the external management team replaces full-time experts; the business owner(s) should consult with this external team on a regular basis (at least once a year) to determine if the business is complying with all rules and regulations. Listing the management team in the business plan allows the reader to know that the business owner has developed a network of experts to provide advice.

The risk-management portion of the business plan provides a description of how the business will handle unexpected or unusual events. For example, if the business engages in agricultural production, will the business purchase crop insurance? Does the business have adequate liability insurance? Is the business diversified to protect against the unexpected, rather than "putting all its eggs in one basket"? If the business has employees, does the business carry adequate workers' compensation insurance? All of these questions should be answered in the risk-management portion of the business plan. More information on how liability can affect your business and on the use of insurance as a risk-management tool can be found in Agricultural Alternatives: Agricultural Business Insurance and Agricultural Alternatives: Understanding Agricultural Liability . The business structure will also determine a portion of the risk-management strategy because the way that a business is structured carries varying levels of risk to the owner and/or owners. All opportunities carry a degree of risk that must be evaluated, and mitigation strategies should be included in this portion of the plan.

Marketing Plan

Every purchase decision that a consumer makes is influenced by the marketing strategy or plan of the company selling the product or service. Products are usually purchased based on consumer preferences, including brand name, price, and perceived quality attributes. Consumer preferences develop (and change) over time and an effective marketing plan takes these preferences into account. This makes the marketing plan an important part of the overall business plan.

In order to be viable, the marketing plan must coincide with the production activities. The marketing plan must address consumer desires and needs. For example, if a perishable or seasonal crop (such as strawberries) will be produced, the marketing plan should not include sales of locally grown berries in January if the business is in northeastern United States. If the business plans to purchase berries in the off-season from other sources to market, this information needs to be included. In this way, the marketing plan must fit the production capabilities (or the capability to obtain products from other sources).

A complete marketing plan should identify target customers, including where they live, work, and purchase the product or service you are providing. This portion of the plan contains a description of the characteristics and advantages of your product or service. Identifying a "niche" market will be of great value to your business.

Products may be sold directly to the consumer (retail) or through another business (wholesale) or a combination of both. Whichever marketing avenue you choose, if you are starting a new enterprise or expanding an existing one, you will need to decide if the market can bear more of what you plan to produce. Your industry research will assist in this determination. The plan must also address the challenges of the proposed marketing strategy.

Other variables to consider are sales location, market location, promotion, advertising, pricing, staffing, and the costs associated with all of these. All of these aspects of the marketing plan will take time to develop and should not be taken lightly. Further discussion on marketing fruits and vegetables can be found in Agricultural Alternatives: Fruit and Vegetable Marketing for Small-Scale and Part-Time Growers .

SWOT Analysis

An adequate way of determining the answers to business and marketing issues is to conduct a SWOT analysis. The acronym SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths represent internal attributes and may include aspects like previous experience in the business. Experience in sales or marketing would be an area of strength for a retail farm market. Weaknesses are also internal and may include aspects such as the time, cost, and effort needed to introduce a new product or service to the marketplace.

Opportunities are external aspects that will help your business to take off and be sustained. If no one is offering identical products or services in your immediate area, you may have the opportunity to capture the market. Threats are external and may include aspects like other businesses offering the same product in close proximity to your business or government regulations impacting business practices and cost.

Financial Plan

The financial plan and assumptions are crucial to the success of the business and should be included in the business plan. One of the foremost reasons new businesses fail is because they do not have enough start-up capital to cover all expenses to make a profit. The scope of your business will be determined by the financial resources you can acquire. Because of this, you will need to develop a financial plan and create the supporting documents to substantiate it.

The financial plan has its basis in historical data (if you are an existing business) or from projections (for a proposed business). The first issue to address is recordkeeping. You should indicate who will keep the necessary records and how these records will be used. Internal controls, such as who will sign checks and handle any funds, should also be addressed. A good rule to follow for businesses that are not sole proprietorships is having at least two people sign all checks.

The next portion of the financial plan should detail where funding will come from. This includes if (and when) the business will need additional capital, how much capital will be needed, and how these funds will be obtained. If start-up capital is needed, this information should be included in this portion. Personal contributions should be included, along with other funding sources. The amount of money and repayment terms should be listed. One common mistake affecting many new businesses is under-funding at start-up. Many start-up businesses do not evaluate all areas of expense and underestimate the amount of capital needed to see a new business through the development stages (including personal living expenses, if off-farm income is not available).

Typically, a balance sheet, income statement, cash flow statement, and partial budget or enterprise budgets are included in a business plan. More information on agricultural budgets can be found in Agricultural Alternatives: Budgeting for Agricultural Decision Making . These documents will display the financial information in a form that lending institutions are used to seeing. If these are not prepared by an accountant, having one review them will ensure that the proper format has been used.

Financial projections should be completed for at least two years and, ideally, for five years. In agricultural businesses, five-year projections are sometimes difficult to make because of variability in prices, weather, and other aspects affecting production. One way to illustrate these risks is to develop several projection scenarios covering a range of production assumptions. This attention to detail will often result in a positive experience with lenders because they realize that the plan covers several possible circumstances and provides insight into how the business plans to manage risk. More information on financing agricultural businesses can be found in the publication Agricultural Alternatives: Financing Small-Scale and Part-Time Farms .

Financial Statements

To keep personal assets and liabilities separate from business assets and liabilities, it is beneficial to create both business and personal financial statements. A lender will need to see both, but the separation will show how the business will support the family or how the off-farm income will support the business.

Cash Flow Statement

A cash flow statement is the predicted flow of cash into and out of a business over a year. Cash flow statements are prepared by showing the total amounts predicted for each item of income or expense. This total is then broken down by month to show when surpluses and shortfalls in cash will occur. In this way, the cash flow statement can be used to predict when additional cash is needed and when the business will have a surplus to pay back any debt. This monthly prediction allows the owner(s) to better evaluate the cash needs of the business, taking out applicable loans and repaying outstanding debts. The cash flow statement often uses the same categories as the income statement plus additional categories to cover debt payments and borrowing.

After these financial statements are completed, the business plan writer will have an accurate picture of how the business has performed and can project how the business will perform in the coming year(s). With such information, the owner—and any readers of the business plan—will be able to evaluate the viability of the business and will have an accurate understanding of actions and activities that will contribute to its sustainability. This understanding will enable them to make better informed decisions regarding loans or investments in the business.

Income Statement

The income statement is a summary of the income (revenue) and expenses for a given accounting cycle. If the balance sheet is a "snapshot" of the financial health of the business, the income statement is a "motion picture" of the financial health of the business over a specific time period. An income statement is constructed by listing the income (or revenue) at the top of the page and the expenses (and the resulting profit or loss) at the bottom of the page.

Revenue is any income realized by the sale of crops or livestock, government payments, and any other income the business may have (including such items as fuel tax refunds, patronage dividends, and custom work). Other items impacting revenues are changes in inventory and accounts receivable between the start of the time period and the end—even if these changes are negative.

Expenses include any expense the business has incurred from the production of the products sold. Examples of expenses include feed, fertilizer, pesticides, fuel, labor, maintenance, repairs, insurance, taxes, utilities, and any changes in accounts payable. Depreciation, which is the calculated wear and tear on assets (excluding land), is included as an expense for accounting purposes. Interest is considered an expense, but any principal payments related to loans are not an expense. Repayment of principal is recorded on the balance sheet under "Loans Payable."

As the income statement is created, the desired outcome is to have more income than expenses, so the income statement shows a profit. If not, the final number is shown in parentheses (signifying a negative number). Another name for this financial record is a Profit and Loss Statement. Income statements are one way to clearly show how the farm is making progress from one year to the next and may show a much more optimistic view of sustainability than can be seen by looking at a single year's balance sheet.

Balance Sheet

A balance sheet is a snapshot of a business’s assets, liabilities, and owner’s equity at a specific point in time. A balance sheet can be prepared at any time, but is usually done at the end of the fiscal year (for many businesses, this is the end of the calendar year). Evaluating the business by using the balance sheet requires several years of balance sheets to tell the true story of the business’s progress over time. A balance sheet is typically constructed by listing assets on the left and liabilities and owner’s equity on the right. The difference between the assets and liabilities of the business is called the "owner's equity" and provides an estimate of how much of the business is owned outright.

Assets are anything owned by, or owed to, the business. These include cash (and checking account balances), accounts receivable (money owed to the business), inventory (any crops or supplies that the business has stored on farm), land, equipment, and buildings. This may also include machinery, breeding stock, small-fruit bushes or canes, and fruit trees. Sometimes assets are listed as current (those easily converted to cash) and fixed (those that are required for the business to continue). Assets are basically anything of value to the business. Some valuations of assets are not easily determined for items such as breeding stock, small-fruit bushes or canes, and fruit trees and may require the use of a certified appraiser familiar with the items.

Balance sheets may use a market-basis or a cost-basis to calculate the value of assets. A market-basis balance sheet better reflects the current economic conditions because it relies on current or market value for the assets, rather than what those assets originally cost. Market values are more difficult to obtain because of the difficulty in finding accurate current prices of assets and often results in the inflation of the value of assets. Cost-basis balance sheets are more conservative because the values are often from prior years. For example, a cost-basis balance sheet would use the original purchase price of land, rather than what selling that land would bring today. Because purchase records are easily obtained, constructing a cost-basis balance sheet is easier. Depreciable assets such as buildings, tractors, and equipment are listed on the cost-basis balance sheet at purchase price less accumulated depreciation. Most accountants use the cost-basis balance sheet method. Whether you choose to use market-basis or cost-basis, it is critical that you remain consistent over the years to allow for accurate comparison.

Liabilities are what the business owes on the date the balance sheet is prepared. Liabilities include both current liabilities (accounts payable, any account the business has with a supplier, short-term notes, operating loans, and the current portion of long-term debt), which are payable within the current year, and noncurrent liabilities (mortgages and loans with a term that extends over one year).

Owner's equity is what remains after all liabilities have been subtracted from all assets. It represents money that the owner(s) have invested in the business, profits that are retained in the business, and changes caused by fluctuating market values (on a market-basis balance sheet). Owner’s equity will be affected whenever there are changes in capital contributed to the business or retained earnings, so if your practice is to use all earnings as your "paycheck," rather than reinvesting them in the business, your owner's equity will be impacted. On the balance sheet, owner’s equity plus liabilities equals assets. Or stated another way, all of the assets less the amount owed (liabilities) equals the owner’s equity (sometimes referred to as "net worth"). Owner's equity provides the "balance" in a balance sheet.

Putting It All Together

After the mission, background information, organization, and marketing and financial plans are complete, an executive summary can then be prepared. Armed with the research results and information in the other sections, the business will come alive through this section. Research results can be included in an appendix if desired. The next step is to share this plan with others whose opinions you respect. Have them ask you the hard questions—make you defend an opinion you have expressed or challenge you to describe what you plan to do in more detail. Often, people are hesitant to share what they have written with their families or friends because they fear the plan will not be taken seriously. However, it is much better to receive constructive criticism from family and friends (and gain the opportunity to strengthen your plan) than it is to take it immediately to the lender, only to have any problems pointed out and receive a rejection.

Once all parts of the business plan have been written, you will have a document that will enable you to analyze your business and determine which, if any, changes need to be made. Changes on paper take time and effort but are not as expensive as changing a business practice only to find that the chosen method is not viable. For a proposed venture, if the written plan points to the business not being viable, large sums of money have not been invested and possibly lost. In short, challenges are better faced on paper than with investment capital.

Remember, a business plan is a "road map" that will guide the future of the business. The best business plan is a document in continual change, reacting to the influence of the outside world on the business. Having the basis of a written plan will give you the confidence to consider changes in the business to remain competitive. Once the plan is in place, the business will have a better chance of future success.

For More Information

Publications.

Abrams, R. The Successful Business Plan: Secrets and Strategies (Successful Business Plan Secrets and Strategies) . Palo Alto, Calif.: Planning Shop, 2014.

Becker, J. C., L. F. Kime, J. K. Harper, and R. Pifer. Agricultural Alternatives: Understanding Agricultural Liability . University Park: Penn State Extension, 2011.

Dethomas, A., and L. and S. Derammelaere. Writing a Convincing Business Plan (Barron's Business Library) . Hauppauge, N.Y.: Barron's Educational Series. 2015.

Dunn, J., J. K. Harper, and L. F. Kime. Agricultural Alternatives: Fruit and Vegetable Marketing for Small-scale and Part-time Growers . University Park: Penn State Extension, 2009.

Grant, W. How to Write a Winning Business Plan: A Step-by-Step Guide for Startup Entrepreneurs to Build a Solid Foundation, Attract Investors and Achieve Success with a Bulletproof Business Plan (Business 101). Independently published. 2020.

Harper, J. K., S. Cornelisse, L. F. Kime, and J. Hyde. Agricultural Alternatives: Budgeting for Agricultural Decision Making . University Park: Penn State Extension, 2019.

Kime, L. F., J. A. Adamik, E. E. Gantz, and J. K. Harper. Agricultural Alternatives: Agricultural Business Insurance . University Park: Penn State Extension, 2019.

Kime, L. F., S. Cornelisse, and J. K. Harper. Agricultural Alternatives: Starting or Diversifying an Agricultural Business . University Park: Penn State Extension, 2018.

Lesonsky, R. Start Your Own Business Fifth Edition: The Only Start-Up Book You'll Ever Need.  Irvine, Calif.: Entrepreneur Media Inc., 2010.

Shelton, H. The Secrets to Writing a Successful Business Plan: A Pro Shares a Step-by-Step Guide to Creating a Plan That Gets Results. Rockville, Md.: Summit Valley Press, 2017.

Stokes, J. S., G. D. Hanson, J. K. Harper, and L. F. Kime.  Agricultural Alternatives: Financing Small-scale and Part-time Farms . University Park: Penn State Extension, 2005.

Online Course

Starting a Farm: Business Planning  

Periodicals

  • American Agriculturist Magazine Farm Progress Companies Inc. 5482 Wilshire Blvd, Suite 260 Los Angeles, CA 90036
  • Businessweek Magazine
  • Fortune Magazine
  • Kiplinger's Personal Finance
  • Money Magazine
  • BizPlanit - Virtual Business Plan
  • PA Business One-Stop Shop
  • Small Business Administration
  • SCORE—volunteer business assistance
  • The Pennsylvania Department of Revenue Starting a Business in Pennsylvania—A Guide to Pennsylvania Taxes
  • The Pennsylvania State University Agricultural Alternative Tools
  • The Pennsylvania State University Conducting a SWOT Analysis
  • The Pennsylvania State University Happy Valley Launch Box

Prepared by Lynn F. Kime, senior extension associate; Linda Falcone, extension educator in Wyoming County, Jayson K. Harper, professor of agricultural economics; and Winifred W. McGee, retired extension educator in Dauphin County

Additional financial support for this publication was provided by the Risk Management Agency of the United States Department of Agriculture and the Pennsylvania Department of Agriculture.

This publication was developed by the Small-scale and Part-time Farming Project at Penn State with support from the U.S. Department of Agriculture-Extension Service.

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When Should Entrepreneurs Write Their Business Plans?

  • Francis J. Greene
  • Christian Hopp

how do business plans develop over time and change as new research is found

Don’t write a plan before you understand your customer.

It pays to plan. Entrepreneurs who write business plans are more likely to succeed, according to research. But while this might tempt some entrepreneurs to make writing a plan their very first task, a subsequent study shows that writing a plan first is a really bad idea. It is much better to wait, not to devote too much time to writing the plan, and, crucially, to synchronize the plan with other key startup activities.

It pays to plan. Entrepreneurs who write business plans are more likely to succeed, according to our research, described in an earlier piece for Harvard Business Review . But while this might tempt some entrepreneurs to make writing a plan their very first task, our subsequent study shows that writing a plan first is a really bad idea. It is much better to wait, not to devote too much time to writing the plan, and, crucially, to synchronize the plan with other key startup activities.

how do business plans develop over time and change as new research is found

  • FG Francis J. Greene is Chair in Entrepreneurship in the University of Edinburgh Business School.
  • CH Christian Hopp is Chair in Technology Entrepreneurship in the TIME Research Area, the Faculty of Business and Economics, RWTH Aachen University.

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How to Do Market Research for a Business Plan Successfully

how do business plans develop over time and change as new research is found

The entrepreneurial-minded folks may long have wondered how to do market research for a business plan. 

After all, a business plan lays out the foundation, purpose and expectations of a new business venture. Given that the risks of starting a new business are manifold , entrepreneurs must conduct market research.

20% of American businesses fail after only their first year of operation, a dismal reality that climbs to 30% after two years.

Newfound entrepreneurs and serial entrepreneurs alike should therefore carefully commit to and execute a business plan.

While market research applies to a wide breadth of applications that cover various business cycles and processes, including opening and operating a new business, it too can be used for producing a 

This article expounds upon how to do market research for a business plan — and succeed in your venture.

Defining A Business Plan and Its Needs

Before you set out to formulate a business plan, it is vital to fully understand all that it entails. Usually created for startups, it is necessary for all businesses to implement. 

A business plan is a written document that summarizes the main aspects of starting up and managing a business, making it the foundation for your business .

A business plan specifically details a business’s objectives, along with its financial, marketing and operational needs and a roadmap thereof. 

It is created to guide a business through each stage in its establishment and management.  As such, it allows business owners to lay out their needs and goals and track them as the business grows.

A business plan must be updated at regular intervals , as priorities and goals are subject to change. Additionally, when an established business moves in a different direction, it needs a new or completely updated business plan.  

The Importance of a Business Plan

A business plan is an important document and not merely for the purpose of monitoring your business as it develops. This is because this document is also needed to obtain investment , especially in the early stages of the business, in which it does not have an evidential track record.

Thus, a business plan shows investors whether your business is on the right course and is worth investing their funds into. Lenders will require proof of a business plan when they deliberate the approval of a loan. 

Here are several other reasons as to why creating and updating a business plan is important:

  • Making important decisions. It allows you to answer difficult questions at the onset, before they emerge. Understanding these decisions helps you understand how they fit into your overall strategy.
  • Addressing key issues to avoid future problems . These include pricing, competition evaluation, market demand, capital and team members.
  • Proving the viability of your business . Planning your vision into a full-fledged business bridges the gap between an idea and reality. Market research is essential for this point, as it helps you find key insights on various aspects of your industry, including your competitors and customers. 
  • Communicating objectives with team members and all those involved . This is important for larger teams, particularly for assistance when you are too busy to relay information or guidance to your team members. This may also help investors or partners who cannot reach you, as it lays out objectives and criteria.
  • Standardizing and carrying out key objectives . Placing your objectives, criteria and other needs gives them more weight and attention. If they aren’t in your business plan, thereby, in writing, they can easily fall by the wayside. A business plan helps avoid this, standardizing key objectives and benchmarks.
  • Guiding consultants, freelancers and other workers . When employing freelancers and contractors, you can turn to specific sections of a business plan to guide these workers, to ensure they understand your vision, goal and other key business aspects.
  • Obtaining financial support. Whether it is via borrowing from a bank, turning to venture capitalists or putting your business up for an acquisition, a business plan makes your business and its viability clear for these key financial players. 
  • Acclimating to market changes . Updating your business plan can help you during periods of critical change in your market. These changes include: changes in customer needs, new regulations, trends or updates in your industry.

Defining Market Research

Market Research is a wide-encompassing practice that involves gathering information to bolster knowledge about a business’s industry, niche and target market . 

It involves the systematic process of amassing, analyzing and interpreting data and information around the state of a business’s industry and its key actors . The key actors entail a business’s target market, competitors and the movers and shakers within its industry.

As such, it involves gathering research around the niche, trends and industry as a whole. 

This involves gathering secondary research , research that has already been conducted and made available, along with primary research , the kind that requires you to conduct yourself. These main types of research gathering involve various means, techniques and tools that researchers can use.

Market research largely deals with evaluating the viability of a new product or service, although this aspect is primarily referred to as customer development . By conducting market research, you can therefore gather information on virtually all areas of your business. 

Why a Business Plan Needs Market Research

A potent document, one that properly lays out the 7 components of a business plan , from the executive summary, to the market analysis, to the strategy, financial plan and all other in-betweens, most use market research to develop it. 

Market research provides the key data, information and nuances your business plan needs. Although a new business or business idea is born on intuition, a business plan must be backed up with data to prove its viability and positioning in its industry. 

As such, market research must be performed in the early stages of the business plan, as it is the phase in which you learn all about your niche, its trends and the demands of your target market (including the makeup of your target market via market segmentation ).

Only after analyzing all of your market research results, will you be able to populate the business plan within key areas such as market analysis, financial projections, strategy and implementation, marketing endeavors, pricing and location . 

A business plan must be comprehensive, another way in which market research is of utmost importance, in that there are various methods and tools you can use to conduct it. By consolidating all of the different market research techniques , you are establishing an exhaustive business plan, the kind that leaves no key consideration out.

how do business plans develop over time and change as new research is found

The following presents the key data and information of a business plan that market research can extract:

  • Demand : Does your product/service have enough market potential to justify a new business?
  • Pricing : How will you determine the pricing of your offerings? 
  • Target Market : Who makes up your target market? Do they have enough spending power to buy your product or service?
  • Location : Does your business require opening a physical store or can it effectively reach its target market via ecommerce? Perhaps it needs both?
  • Historic data on your product/ service : How have the products and services in your niche performed over time? How do they perform currently? 
  • Marketing and Market Entry : How will you form an explanation on how you’ll enter the market? How will you promote your products/services to solidify your entry?
  • Labor Requirements : Do you have enough manpower to form a business? How many employees and contractors will your business require?
  • Financial Plan : Do you have the financial means to cover all operations?

How to Conduct Market Research for a Business Plan

Since a business plan ought to include concrete information to pave the way for business success, it requires thorough market research. Given that market research encompasses so many modes and forms, it can be overwhelming and even intimidating to begin to conduct it for your business plan.

The following provides a step-by-step guide on how to do market research for a business plan, so you can craft your plan in an informed manner, equipped with critical market research.

how do business plans develop over time and change as new research is found

  • First, search the secondary sources available; while some are free, there will be many that aren’t.
  • Then, narrow it down to a specific niche, with suspected market segments.
  • Focus your research via secondary sources on your market. Look at trade publications, new sites dedicated to your market, industry reports, local reports, statistics websites, blogs on the startups in your niche, including their stories of success and failure and other secondary resources.
  • Conduct further secondary research on your priorities.
  • Then, switch to primary research methods to zero in on your most critical research subjects.
  • You can achieve this by conducting secondary research on your target market.
  • Use an online survey, a focus group or a survey panel .
  • Segment your target market further and start building personas from the shared characteristics they exhibit.
  • Be sure to find similar offerings available to identify your competitors.
  • Survey your target market on their needs and feelings towards similar products/services, along with their aversions and desires for updates.
  • This will help you understand how to set up your prices as well.
  • Research the costs of marketing and publicizing the launch of your business.
  • Compare all costs and establish a preliminary business budget.
  • Jot down their strengths and weaknesses.
  • Compare your offering to theirs, does it fill any gaps or voids? Is it better price-wise?
  • Break this down from high to low levels of research. Ex: From the general industry to the exact niche, from a large target market, to specific segments, to specific personas.
  • Adjust your budget, goals and plans.
  • The executive summary, company description, products and services, market analysis, strategy and implementation, organization and management, financial plan and projections.
  • Assure that everything makes sense. If there are gaps in the information you have outlined, consider conducting more research.
  • Highlight areas of opportunity, along with areas of risk. 
  • Edit your business plan as needed.

Empowering Your Market Research-Powered Business Plan

Market research is a wide-reaching practice that blends consumer behavior and economic trends to help you validate and improve a business idea. It can also help you change the course or style of an already established business.

Thus, it is not solely for startups. Market research can be difficult to conduct and manage , as there are so many business aspects you’ll need to consider to lower your risk of failure. Concurrently, there is so many kinds of market research you can stand to conduct.

Even with the steps listed above, navigating through the jungle of market research can be a laborious and difficult task. While you can’t control secondary resources, you can wield control of your primary research endeavors via an online survey platform . 

This kind of market research tool allows you to take the reigns in every aspect: from asking the exact questions you seek answers to , to targeting a specific market segment , to deploying your surveys across the most-frequented websites and apps. 

A potent survey platform will complete all of these crucial tasks , making primary research an easy task. The trick is to find an online survey platform that can handle all of these tasks, along with making it easy to analyze the data.

Do you want to distribute your survey? Pollfish offers you access to millions of targeted consumers to get survey responses from $0.95 per complete. Launch your survey today.

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Market Research for a Business Plan: How to Do It in a Day

Market Research for a Business Plan: How to Do It in a Day

Whether it’s your first time using market research for a business plan or this isn’t exactly your first rodeo: a quick refresh on the topic can do no harm.

If anything, it’s the smart route to take. Particularly when you consider modern-day market research data can be obtained quicker than ever – when the right tools are used.

Today, I’m going to explain exactly how to conduct market research for a business plan, and how to access that key data and juicy intel without hassle.

The importance of market research in business planning

They say knowledge is power, and where your rivals and your market are concerned, there’s nothing quite like it. By looking at things like consumer behavior, the competitive landscape , market size, and the digital strategies of others; companies at any stage in their lifecycle can stay relevant, maintain a competitive edge, set strategic direction, and experience growth. Doing periodic market research also helps businesses develop a deeper, more informed understanding of a market, its audience, and key players. If you’re seeking financial backing, doing market research is essential to show credibility and build confidence in your plans.

why market research for a business plan is important

How to conduct market research for a business plan

Good market research for a business plan should be contextualized with information about your company, its goals, products, pricing, and financials. Sounds like a lot of work, right? Read on to learn how to conduct all the market research for a business plan you’re going to need – quickly, using the most up-to-date data there is. I’ll show you how to:

  • Understand your audience
  • Identify target personas
  • Size your market 
  • Research the competition 
  • Discover your unique sales proposition
  • Define marketing priorities 

Before you start, make sure your business planning document includes the following 10 headings:

business planning market research areas of focus

This format is considered best practice, so I’ve indicated the specific sections that each element of your market research fits into.

Sound good? Then let’s get started.

1. Understand your audience

What it is – A target audience is a social segment of people who are likely to be interested in your products or services. It’s a snapshot of your target customer base, sorted by certain characteristics. It’s also known as audience demographics and can contain data like age, gender, location, values, attitudes, behaviors, and more.     

Where to use this market research in a business plan – Demographical data can help determine the size of your market, which slots into the executive summary, marketing plan, market sizing, and financial sections of the plan. What’s more, when you use it to identify groups of people to target, it can also be used in the products and services, competitive research tools , and SWOT analysis sections.

Bonus: Audience demographics can also help you develop stronger branding by choosing imagery that appeals most to your ideal customers.

How to do a quick audience analysis

Similarweb Digital Research Intelligence gives you the ability to view almost any industry in a few seconds; you can also create a custom industry based on specific players in your market.  Here’s how to see relevant audience demographics in a market. For this example, I chose the airline industry.

View typical audience relevant to your sector with gender and age distribution, along with geographical data . You can see which companies are experiencing growth and at what rate. Audience loyalty is also key to understanding how people behave, if they tend to shop around and what search terms they use to discover sites in any niche.

Read more: Learn more about how to do a demographic analysis of your market’s audience .

2. Identify target personas

What it is – An audience or target persona is a typical customer profile. It starts with audience demographics, and then zooms into a much deeper level. Most organizations develop multiple target personas, based on things like pain points, location, gender, background, occupation, influential factors, decision-making, likes, dislikes, goals, ideals, and more. 

target personas

Pro Tip: If you’re in B2B, your target personas are based on the people who make purchasing decisions, not the business itself.

Where to use this market research in a business plan – Creating target personas for your business shows you know whom you’re targeting, and how to market to them. This information will help you complete market sizing, product or service overview, marketing plan, and could fit into the competitive research section too.

How to create a buyer persona in five steps

Guesswork does not equal less work – there’s no place for shortcuts here. Your success depends on developing the most accurate representation of who your customers are, and what they care about. 

1. Research: If you’re already in business, use market research surveys as a tool to collect information about your customers. If you’re a startup or pre-startup, you can use a platform like Similarweb to establish a typical customer profile for your market. Don’t forget to use mobile app intelligence and website analytics in tandem to build a complete picture of your audience. 

Pro Tip: Secondary market research is another good source of intel for startups. You might be able to find published surveys that relate to your products or market to learn more.

2. Analysis: Here, you’re looking to answer key questions to fill in the blanks and build a complete picture of your ideal customer. Tools like Similarweb Digital Research Intelligence, Google Analytics, and competitors’ social media channels can help you find this out. Typical questions include:

  • Where is your audience coming from?
  • What channels do they use to find your site?
  • Do they favor access via mobile site, app, or desktop?
  • What are their demographics? Think age, job, salary, location, and gender.

3. Competitive market research: This shows you what marketing channels, referral partners, and keywords are sending traffic to businesses similar to yours When you combine this data with what you learned in sections 1 + 2, you are ready to build your personas.

4. Fill in a buyer persona template: We’ve done the hard work for you. Download a pre-made template below .

Further reading: The complete guide to creating buyer personas

3. Size your market

What it is – Market sizing is a way to determine the potential size of a target market using informed estimation. This is how you find out the potential revenue and market volume applicable to your business . There are three key metrics: total addressable market (TAM), service addressable market (SAM), and service obtainable market (SOM).

Tam, sam, and som definition

Where to use this market research in a business plan – Knowing how big the slice of the pie you’re going after is crucial. It can inform any goal setting and help with forecasting too. This data can be used in your executive summary, marketing plan, competitive research, SWOT analysis, market sizing, operations, and financial sections.

Further reading: How to do market sizing shows you how to calculate the TAM, SAM, and SOM for your business.

4. Research the competition

What it is – Competitive landscaping shows who you’re up against and how your offering stacks up vs others in your space. By evaluating rivals in-depth and looking at things like features, pricing, support, content, and additional products, you can form a detailed picture of the competition.

Where to use this market research in a business plan – The information you gain from performing a competitive analysis can transform what you offer and how you go to market. In business planning, this market research supports the executive summary, product or service overview, marketing plan, competitive research, SWOT analysis, and operation sections.  

How to do competitive landscaping

Using the industry overview section of Similarweb Digital Research Intelligence, competitor research is made quick and easy. Access key metrics on an industry or specific players, then download raw data in a workable excel file or get a PNG image of charts in an instant. Most data can be downloaded via excel or as an image and included in the resource section of your plan.

Here, you can see a summary of a market, yearly growth, and top sites. A quick click to industry leaders shows you market leaders and rising stars. Select any name for a complete picture of their digital presence – use this to spot potential opportunities to gain a competitive advantage.

Read more: See how to do a competitive analysis and get a free template to help you get started.

5. Discover your unique sales proposition

How to find your unique selling proposition

What it is – Not all businesses have them, and that’s OK. A unique selling proposition (USP) is something distinctive your business offers but your rivals don’t . It can be anything that’s unique to a product, service, pricing model, or other.  

Why it’s useful – Having a compelling USP helps your company stand out in a market. It can make your business more valuable to a customer vs the competition, and ultimately help you win and retain more customers.

Where to use this market research in a business plan – Your USP should be highlighted in the executive summary, the product and service overview, and the SWOT analysis.

How to find your USP

Unless you’ve developed a unique product or service, or you’re planning to sell to the market at a lower-than-average price point, you’re going to have to look for some kind of service differentiator that’ll help you stand out. In my experience, the quickest way to discover this is through competitive benchmarking. Here, I’m talking about evaluating your closest rivals to uncover things they’re not doing, or looking for gaps that your business can capitalize on. 

A competitive review of their site should look at things like:

  • Customer support: do they have live chat, email support, telephone support, etc.?
  • Content: do they produce additional content that offers value, free resources, etc.?
  • Offers: what promotions or offers do they run?
  • Loyalty or referral programs: do they reward loyalty or referrals?
  • Service level agreements: what commitments do they make to their customers?
  • Operations: consider delivery methods, lead times, returns policy etc.
  • Price promises: what satisfaction or price promises do they offer, if at all?

Go easy on yourself and create a basic template that details each point. Once complete, look for opportunities to provide something unique that nobody else currently offers.

6. Define marketing priorities

What it is – A detailed plan showing how you position and market your products or service. It should define realistic, clear, and measurable goals that articulate tactics, customer profiles, and the position of your products in the market.

Where to use this market research in a business plan – Relevant intel you uncover should inform the marketing plan first and foremost. However, it can also be used in the SWOT analysis, operation, and financial sections.

How to do it – with a market research example

Using the marketing channels within Similarweb Digital Research Intelligence, you can short-cut the lengthy (and often costly) process of trial and error when trying to decide which channels and activities work best.

Let me show you how.

Using Similarweb Digital Research Intelligence, I can hone in on any site I like, and look at key marketing intel to uncover the strategies they’re using, along with insights into what’s driving traffic, and traffic opportunities.

In less than 60 seconds, I can see easyJet’s complete online presence; its marketing and social channels, and a snapshot of every metric that matters, like referrals, organic and paid ads, keywords, and more. Expand any section to get granular data, and view insights that show exactly where key losses, gains, and opportunities exist.

You can take this a step further and add other sites into the mix. Compare sites side-by-side to see who is winning, and how they’re doing it. While this snapshot shows a comparison of a single competitor, you can compare five at any one time. What’s more, I can see industry leaders, rising players, and any relevant mobile app intelligence stats, should a company or its rivals have an app as part of their offering.

Best practice for market research data in business plans

When doing any type of market research , it’s important to use the most up-to-date data you can get your hands on. There are two key factors for data are timeliness and trustworthiness.

For any market, look for data that applies to any period over the last 12 months. With how fast markets evolve and how quickly consumer behaviors change, being able to view dynamic data is key. What’s more, the source of any data matters just as much as its age.

To emphasize the importance of using the right type of data in a business plan, here’s some timely advice from SBA commercial lending expert and VP of Commerce National Bank and Trust, Steve Fulmer. As someone who, in the past 15 years, has approved approximately $150 million in loans to SMBs; his advice is worth paying attention to.

“ For anybody doing market research for a business plan, they must cite sources. Most new or small businesses lack historical performance data, which removes substantial confidence in their plans. As a lender, we cannot support assumptions in their business plan or their projections if their data hasn’t come from a trustworthy source.”

Steve Fulmer (Vice president SBA & commercial lending, Commerce Bank & Trust)

Wrapping up…

Now you know the six ways to do market research for a business plan, it’s time to knuckle down and get started. With Similarweb, you’ve got access to all the market intel you’re going to need to conduct timely, accurate, and reliable market research. What’s more, you can return to the platform anytime to benchmark your performance , get fresh insights, and adapt your strategies to focus on growth – helping you build a sustainable business that can withstand the test of time.

How do I do market research for a business plan?

By using Digital Research Intelligence tools like Similarweb, you can quickly conduct audience research, company research, market analysis, and benchmarking from a single place. Another method is secondary market research, but this takes more time and data isn’t always up to date. 

Why does a business plan need market research?

Doing market research for a business plan is the quickest and easiest way to validate a business idea and establish a clear view of the market and competitive landscape. When done right, it can show you opportunities for growth, strategies to avoid, and effective ways to market your business. 

What is market research in a business plan?

Market research in business planning is one of the most powerful tools you can use to flesh out and validate your company or its products. It can tell you whether there’s a market for your product, and how big that market is – it also helps you discover industry trends, and examine the strategies of the rising stars and industry leaders in detail. 

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3 Essential Initial Research

Learning Objectives

After completing this chapter, you will be able to

  • Apply analytical skills to assess how the nature of the entrepreneurial environment can influence entrepreneurial outcomes
  • Apply the right tools to do impactful analyses at each of the societal, industry, market, and firm levels to evaluate entrepreneurial and other business opportunities

This chapter introduces the distinct levels of analyses that must be considered while stressing the importance of applying the appropriate tools to conduct the analyses at each level.

how do business plans develop over time and change as new research is found

Support Information

It is important to conduct the essential initial research.  All information and items in the plan should be backed with facts from valid primary or secondary sources. Alternatively, some entrepreneurs can make valid claims based on experience and expertise. As such, their background and experiences should be delineated to support the claims made in their business plan.

Levels of Analyses

When evaluating entrepreneurial opportunities—sometimes called idea screening—an effective process involves assessing the various venture ideas being considered by applying different levels and types of analyses. Entrepreneurs starting ventures and running existing businesses should also regularly analyze their operating environments at the societal, industry, market, and firm levels. The right tools, though, must be applied at each level of analysis (see Figure 3). It is critical to complete the essential initial research at all four levels (societal, industry, market, and firm). The initial scan should be high-level, designed to assist in making key decisions (i.e. determining if there is a viable market opportunity for the venture).  Secondary scans should be continuously conducted to support each part of the business plan (i.e. operations, marketing, and finance). However, information should only be included if it is research-based, relevant, and adds value to the business plan.  The results from such research (i.e. the Bank of Canada indicates that interest rates will be increasing in the next two years) should support business strategies within the plan (i.e. debt financing may be less favourable than equity financing). Often, obtaining support data (i.e. construction quotes) is not immediate, so plant a flag and move forward. Valid useful resources may include information from Statistics Canada, Bank of Canada, IBIS World Report, etc.

Societal Level

At a societal level,  it is important to understand each of the political, economic, social, technological, environmental, and legal (PESTEL) factors—and, more specifically, the trends affecting those factors—that will affect a venture based on a particular idea. Some venture ideas might be screened out and others might be worth pursuing at a particular time because of the trends occurring with those PESTEL factors. When including this research in your business plan, avoid using technical jargon or informal language that may distract readers (i.e. rivalry among firms) and use simpler language (i.e. competitive environment).

Industry Level

Analysis of the industry level will focus on the sector of the economy in which you intend to operate. Because the right analysis tool must be used for the assessment to be effective, apply Porter’s Five Forces Model , or a similar tool, to assess industry-level factors. [1] Again, avoid technical jargon (i.e. threat of new entrants) and use simpler wording (i.e. difficulty of entering the market) or flip to an analysis of the threat (i.e. strategies to establish and maintain market share).

Market Level

At the market level , you need to use a tool to generate information about the part of the industry in which your business will compete. This tool might be a set of questions designed to uncover information that you need to know to help develop plans to improve your proposed venture’s success.

At a firm level, both the internal organizational trends and the external market profile trends should be analyzed. There are several tools for conducting an internal organizational analysis, and you should normally apply many of them.

Analyzing the Trends at Each Level

how do business plans develop over time and change as new research is found

Analyze Societal-Level Trends

Use an appropriate tool like the PESTEL Model to assess both the current situation and the likely changes that may affect your venture in the future:

  • Political factors – federal & provincial & municipal government policy, nature of political decisions, potential political changes, infrastructure plans, etc.
  • Economic factors – interest rates, inflation rates, exchange rates, tax rates, GDP growth, health of the economy, etc.
  • Social factors – population characteristics like age distribution and education levels, changes in demand for types of products and services, etc.
  • Technological factors – new processes, new products, infrastructure, etc.
  • Environmental factors – effects of climate / weather, water availability, smog and pollution issues, etc.
  • Legal factors – labour laws, minimum wage rates, liability issues, etc.

After assessing these factors, analyze the impact these trends have upon the venture:

  • Do the trends uncover opportunities and threats?
  • Can opportunities be capitalized on?
  • Can problems be mitigated?
  • Can the venture be sustained?

Analyze Industry-Level Trends

Use an appropriate tool like the Five Forces Model to analyze the industry in which you expect to operate:

  • Horizontal relationships – threat of substitutes, rivalry among existing competitors, threat of new entrants, etc.
  • Vertical Relationships – bargaining power of buyers, bargaining power of suppliers, etc.

Analyze Market-Level Trends

Use an appropriate method like a market profile analysis to assess the position within the industry in which you expect to operate. To do so, determine the answers to questions like the following:

  • How attractive is the market?
  • In what way are competitors expected to respond if you enter the market?
  • What is the current size of the market and how large is it expected to become?
  • What are the current and projected growth rates?
  • At what stage of the development cycle is the market?
  • What level of profits can be expected in the market?
  • What proportion of the market can be captured? What will be the cost to capture this proportion and what is the cost to capture the proportion required for business sustainability?

Prior to a new business start-up, the customers that the new business wishes to attract either already purchase the product or service from a competitor to the new business—or do not yet purchase the product or service at all. A new venture’s customers, therefore, must come from one of two sources. They must be attracted away from existing (direct) competitors or be convinced to make different choices about where they spend their money so they purchase the new venture’s product or service instead of spending their money in other ways (with indirect competitors). This means an entrepreneur must decide from which source they will attract their customers, and how they will do so. They must understand the competitive environment.

According to Porter, strategy is about doing different things than competitors or doing similar things but in different ways. [2] In order to develop an effective strategy, an entrepreneur must understand the competition.

To understanding the competitive environment, entrepreneurs must do the following:

  • Determine who their current direct and indirect competitors are and who the future competitors may be
  • Understand the similarities and differences in quality, price, competitive advantages, and other factors that exist between their proposed business and the existing competitors
  • Establish whether they can offer different products or services—or the same products or services in different ways—to attract enough customers to meet their goals
  • Anticipate how the competitors will react in response to the new venture’s entry into the market

Analyze Firm-Level Trends (organizational analysis)

There are several tools available for firm-level analysis, and usually several of them should be applied because they serve different purposes.

Tools like a SWOT Analysis or TOWS Matrix can formulate and evaluate potential strategies to leverage organizational strengths, overcome/minimize weaknesses, take advantage of opportunities, and overcome/minimize threats. You will also need to do a financial analysis and consider the founder fit and the competencies a venture should possess.

  • SWOT Analysis – identify organizational strengths and weaknesses and external opportunities and threats
  • Leverage strengths to take advantage of opportunities
  • Leverage strengths to overcome threats
  • Mitigate weaknesses by taking advantage of opportunities
  • Mitigate weaknesses while minimizing the potential threats or the potential outcomes from threats

To analyze a firm’s strategy, apply a VRIO Framework analysis, as Barney and Barney and Hesterly outline. [3] [4] While conceptualizing the resource-based view (RBV) of a firm, they identified the following four considerations regarding resources and their ability to help a firm gain a competitive advantage. Together, the following four questions make up the VRIO Framework, which can assess a firm’s capacity and determine what competencies a venture should have. To use this tool, you need to determine whether competencies are valuable, rare, inimitable, and organized in a way that they can be exploited:

  • Value – Is a particular resource (financial, physical, technological, organizational, human, reputational, innovative) valuable to a firm because it helps it take advantage of opportunities or eliminate threats?
  • Rarity – Is a particular resource rare in that it is controlled by or available to relatively few others?
  • Imitability – Is a particular resource difficult to imitate so that those who have it can retain cost advantages over those who might try to obtain or duplicate it?
  • Organization – Are the resources available to a firm useful to it because it is organized and ready to exploit them?

To assess the financial attractiveness of the venture, analyze

  • Comparative ratio and financial analysis can help determine industry norm returns, turnover ratios, working capital, operating efficiency, and other measures of firm success. [5]
  • Analyzes the key industry players’ relative market share, and make judgments about how the proposed venture would fare within the industry.
  • Uses information from market profile analysis and key industry player analysis.
  • Involves projecting expected margins from venture
  • Useful information might come from financial analysis, market profile analysis, and NAICS (North American Industry Classification System) codes (six digit codes used to identify an industry—first five digits are standardized in Canada, the United States, and Mexico—is gradually replacing the four digit SIC [Standard Industrial Classification] codes)
  • Involves using information from margin analysis to determine break-even volume and break even sales in dollars
  • Is there sufficient volume to sustain the venture?
  • Forecasts income and assets required to generate profits
  • What will be the likely impact if some assumed variable values change?
  • Projects the ROI from undertaking the venture
  • What is the opportunity cost of undertaking the venture?

Founder fit is an important consideration for entrepreneurs screening venture opportunities. While there are plenty of examples of entrepreneurs successfully starting all types of businesses, “technical capability can be an important if not all-important factor in pursuing ventures success”. [6] Factors such as the experience, training, credentials, reputation, and social capital an entrepreneur has can play an important role in their success or failure in starting a new venture. Even when an entrepreneur can recruit expert help through business partners or employees, it might be important that he or she also possess technical skills required in that particular kind of business.

  • A common and useful way to help screen venture options is to seek input from experts, peers, mentors, business associates, and perhaps other stakeholders like potential customers and direct family members.

Lean Startup [7]

Ries defines a lean start-up as “a human institution designed to create a new product or service under conditions of extreme uncertainty”. The lean-start-up approach involves releasing a minimal viable product to customers with the expectation that this early prototype will change and evolve frequently and quickly in response to customer feedback. This is meant to be a relatively easy and inexpensive way to develop a product or service by relying on customer feedback to guide the pivots in new directions that will ultimately—and relatively quickly—lead to a product or service with the appeal required for business success. It is only then that the actual business will truly emerge.  As such, entrepreneurs that apply the lean-start-up approach—because their business idea allows for it—actually forgo developing a business plan, at least until they might need one later to get financing, because introducing a  minimum viable product helps “entrepreneurs start the process of learning as quickly as possible”.  This is followed by ever improving versions of their products or services.  However, all entrepreneurs must directly consult with their potential target purchasers and end users to assess if and how the market might respond to their proposed venture. The Essential Initial Research and Progressive Research stages should include purposeful and meaningful interactions between the entrepreneur and the target purchasers and end users.

Ries’s five lean-start-up principles start with the idea that entrepreneurs are everywhere and that anyone working in an environment where they seek to create new products or services “under conditions of extreme uncertainty” can use the lean-start-up approach. Second, a start-up is more than the product or service: it is an institution that must be managed in a new way that promotes growth through innovation. Third, start-ups are about learning “how to build a sustainable business” by validating product or service design through frequent prototyping that allows entrepreneurs to test the concepts. Forth, start-ups must follow this process or feedback loop: create products and services; measure how the market reacts to them; and learn from that to determine whether to pivot or to persevere with an outcome the market accepts. Finally, Ries suggested that entrepreneurial outcomes and innovation initiatives need to be measured through innovative accounting.

how do business plans develop over time and change as new research is found

Chapter Summary

By applying the right tools to analyze the operating environment at each of the societal, industry, market, and firm levels, entrepreneurs screen venture ideas, plan new venture development, and potentially detect factors that might affect their business operations.  The lean start-up is an alternative that can be used to circumvent the usual planning steps in favour of continuous innovation. See Figure 4 for other resources on business models and lean start-ups.

  • Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance . Free Press. ↵
  • Porter, M. E. (1996). What is strategy? Harvard Business Review, 74 (6), 61-78. ↵
  • Barney, J. B. (1997). Gaining and sustaining competitive advantage. Reading, MA: Addison-Wesley. ↵
  • Barney, J. B., & Hesterly, W. S. (2006). Strategic management and competitive advantage: Concepts and cases. Pearson/Prentice Hall. ↵
  • Vesper, K. H. (1996). New venture experience (revised ed.). Vector Books. ↵
  • Ibid. ↵
  • Ries, E. (2011). The lean startup: How today’s entrepreneurs use continuous innovation to create radically successful businesses. Crown Business. ↵

Business Plan Development Guide Copyright © 2023 by Lee A. Swanson is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License , except where otherwise noted.

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Do You Need a Business Plan? Scientific Research Says Yes

Male entrepreneur sitting in an office in front of computer. Reviewing a research study covering the impact of small business success due to planning.

Noah Parsons

13 min. read

Updated November 20, 2023

Should you spend some time developing a plan for your business, or just dive in and start, figuring things out as you go? There has been plenty of debate on this topic, but no one has pulled together the scientific evidence to determine if planning is worthwhile—until now .

With the help of my friend Jeff, from the University of Oregon, I’ve been looking at academic research on business planning—the actual science around planning and how it impacts both startups and existing businesses.

But, before we dive into the data, why do we even need to look at research on business planning? It seems like most advice on  starting a business  includes writing a business plan as a necessary step in the startup process. If so many people encourage you to write one, business plans must add value, right?

Well, over the past few years, there’s been a lot of controversy about the value of business plans. People look at certain companies that have been very successful but haven’t written business plans and conclude that planning is a waste of time.

After all, taking the time to plan is a bit of a trade-off. The time you spend planning could be time spent building your company. Why not just “get going” and learn as you build your company, instead of taking the time to formulate a strategy and understand your assumptions about how your business might grow?

Well, the research shows that it’s really not a “write a plan” or “don’t write a plan” conversation. What really  matters is what kind of planning you do  and how much time you spend doing it.

  • Planning can help companies grow 30 percent faster

One study (1) published in 2010 aggregated research on the business growth of 11,046 companies and found that  planning improved business performance . Interestingly, this same study found that planning benefited existing companies even more than it benefited startups.

But, this study still doesn’t answer the question it raises:

Why would planning help a business that has a few years of history more than one that is just starting up?

The answer most likely lies in the fact that existing businesses know a bit more about their customers and what their needs are than a new startup does. For an existing business, planning involves fewer guesses or assumptions that need to be proven, so the strategies they develop are based on more information.

Another study (2) found that  companies that plan grow 30 percent faster  than those that don’t plan. This study found that plenty of businesses can find success without planning, but that businesses with a plan grew faster and were more successful than those that didn’t plan.

To reinforce the connection between planning and fast growth, yet another study (3) found that fast-growing companies—companies that had over 92 percent growth in sales from one year to the next—usually have business plans. In fact,  71 percent of fast-growing companies have plans . They create budgets, set sales goals, and document their marketing and sales strategies. These companies don’t always call their plans “business plans” but instead often refer to things like strategic plans, growth plans, and operational plans. Regardless of the name, it’s all forward-looking planning.

Action:  Carve out some time to set goals and build a plan for your business. More importantly,  re-visit your plan as you grow  and revise it as you learn more about your business and your customers.

Business planning is not an activity you undertake only when you’re getting your business up and running. It should be something you return to, time and time again, to revise and improve upon based on new knowledge.

What’s your biggest business challenge right now?

  • The quality of the plan matters

But, it’s not as simple as it might appear. Just having a plan doesn’t guarantee faster growth.  It’s the kind of plan you have and how you use it that really matters .

It turns out that startups, especially ones building highly innovative businesses, should create shorter, less detailed plans (4). That’s because these innovative startups are learning new things about their product and customers at a very fast pace and their strategies change more frequently. Simpler plans get updated more frequently and are more helpful to these companies because they can review their strategy at a glance.

Meanwhile, more established companies know a lot more about their products and customers and can craft more detailed strategies that are less likely to change as quickly. For these companies, more detailed planning is generally more helpful.

And it’s not just the size of the plan that matters. What you include in your plan is important as well.

The same study we talked about above—the one that found that businesses grow faster with a plan—also found that companies that did a good job defining their  value proposition  do even better than companies that have a hard time defining their customers’ needs.

These researchers also found that  having a plan is less about accurately predicting the future, and more about setting regular goals, tracking your actual progress toward those goals and making changes to your business as you learn more about your customers.  Silicon Valley businesses like to call the act of changing strategic direction “pivoting.” All it really means is that you need to stay nimble, keep your eyes open, and be willing to make changes in your business as you compare your actual results to your goals and gather additional feedback from your customers.

Action:  Skip the 40-page business plan and instead focus on simpler planning that defines your goals and documents your customers’ needs. Adjust your plan frequently as you learn more about your business.

Being prepared matters when you’re seeking funding

Over and over again, you hear venture capitalists talk about how much the team matters in a funding decision. Beyond just the team, you also hear them talk about passion—how much the entrepreneur believes in the idea.

But, it turns out that there is something that trumps passion when VCs make their decisions. Research shows (5) that how well an entrepreneur is prepared is much more important than how much passion they have.

This doesn’t mean that VCs will ask for a business plan. In fact, they probably won’t ask for one.

What it means is that entrepreneurs need to have done some planning, in some form, so that they can be prepared to talk intelligently about their idea, their target market, their sales and marketing strategies, and so on.

So, the formal 40-page business plan document may not be useful when you’re pitching VCs. But, you’d better have done some planning, so that you can communicate verbally or through a  pitch deck  what would normally have been found in that written document.

And, not only will business planning help you be more prepared, it will actually improve your chances of getting funded. A study at the University of Oregon (6) found that  businesses with a plan were far more likely to get funding than those that didn’t have a plan .

Action:  Know your business inside and out. Document your strategy in an internal document, but skip all the time and effort creating a well-crafted business plan document.

When you start planning is important—the earlier the better

So, if business planning increases your likelihood of success, and in fact helps you grow faster, when should you start working on a business plan?

Research shows (7) that entrepreneurs who started the business planning process early were better at what the scientists call “establishing legitimacy.” That’s a fancy way of saying that these entrepreneurs used business planning to start the process of talking with potential customers, working with business partners, starting to look for funding, and gathering other information they needed to start their business.

Entrepreneurs that did a good job of using their business plan to “establish legitimacy” early were more likely to succeed and their businesses tended to last longer.

Not only that,  starting the planning process before starting marketing efforts and before talking to customers reduces the likelihood that a business will fail ( 8). 

That said, planning should never take the place of talking to customers. An ongoing planning process—one in which the plan is constantly revised as new information is gathered—requires that you talk to your potential customers so that you can learn more about what they need, what they are willing to pay, and how you can best reach them.

Action:  Start the planning process early. Even if all you do is build out a simple  elevator pitch  to try your idea on for size, it will help you begin the conversation with potential customers and kick-start your business.

  • Planning makes you more likely to start your business

If you’re like me, and like most entrepreneurs, you like to dream up new business ideas. You constantly think of new ways to improve existing businesses and solve new problems.

But, most of those dreams never become a reality. They live on as ideas in your head while other entrepreneurs see the same opportunity and find a way to make it happen.

It turns out that there’s a way to turn more of your ideas into a viable business. A study published in  Small Business Economics  found that  entrepreneurs that take the time to create a plan for their business idea are 152 percent more likely to start their business ( 9). Not only that, those entrepreneurs with a plan are 129 percent more likely to push forward with their business beyond the initial startup phase and grow it. These findings are confirmed by another study that found that entrepreneurs with a plan are 260 percent more likely to start their businesses (10). 

Interestingly,  these same entrepreneurs who build plans are 271 percent more likely to close down a business . This seems counterintuitive to the stats above, but when you think about it a bit more, it makes a lot of sense.

Entrepreneurs with plans are tracking their performance on a regular basis. They know when things aren’t going to plan—when sales aren’t meeting projections and when marketing strategies are failing. They know when it’s time to walk away and try a different idea instead of riding the business into the ground, which could have disastrous results.

Action:  If you really want to start a business, start committing your goals and strategy to paper. Even if it’s just a simple  one-page business plan,  that will help you get started faster. And, once you do start, track your performance so you know when to change direction and try something different.

You’re less likely to fail if you have a plan

Nothing can absolutely prevent your company from failing, but it turns out that having a plan can help reduce your risks.

Yet another study of 223 companies found that having a plan reduced the likelihood that a business would fail. Having a plan didn’t guarantee success, unfortunately. But, those companies with a plan had better chances of success than those that skipped the planning process.

Having a plan and updating it regularly means that you are tracking your performance and making adjustments as you go. If things aren’t working, you know it. And, if things are going well, you know what to do more of.

Action:  Build a plan, but don’t just stick it in a drawer. Track your performance as you go so you can see if you’re reaching your goals. Your plan will help you discover what’s working so you can build your business.

  • Your success depends on the type of planning you do

In the end, creating a business plan seems like common sense. You wouldn’t set out on a trip without a destination and a map, would you?

It’s great to see research back up these common-sense assumptions. The research also validates the idea that the value of business planning really depends on how you approach it.

It’s not a question of whether you should plan or not plan—it’s what kind of planning you do.  The best planning is iterative; it’s kept alive and it adapts.

It’s not about predicting the future as if you’re a fortune teller at a carnival. Instead, it’s a tool that you use to refine and adapt your strategy as you go, continuing to understand your market as it changes and refining your business to the ever-changing needs of your customers.

I recommend starting with a one-page plan. It’s a simpler form of planning where you can start by documenting your business concept on a single page. From there, iterate, gather feedback, and adjust your plan as needed. If you need some inspiration, check out our gallery of over  550 free sample business plans .

Finally, a big “thank you” to  Jeff Gish at the University of Oregon , who was immensely helpful in gathering and analyzing the research mentioned in this article.

What has your experience with business planning been like? Will you approach the planning process differently in the future? Tell me on Twitter @noahparsons.

References:

1 Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan or just storm the castle? A meta-analysis on contextual factors impacting the business planning–performance relationship in small firms.  Journal of Business Venturing,  25(1), 24-40. doi: 10.1016/j.jbusvent.2008.10.007

2 Burke, A., Fraser, S., & Greene, F. J. (2010). The multiple effects of business planning on new venture performance.  Journal of Management Studies,  47(3), 391-415.

3 Upton, N., Teal, E. J., & Felan, J. T. (2001). Strategic and business planning practices of fast growth family firms.  Journal of Small Business Management, 39(1), 60-72.

4 Gruber, M. (2007). Uncovering the value of planning in new venture creation: A process and contingency perspective.  Journal of Business Venturing,  22(6), 782-807. doi: 10.1016/j.jbusvent.2006.07.001

5 Chen, X.-P., Yao, X., & Kotha, S. (2009). Entrepreneur passion and preparedness in business plan presentations: A persuasion analysis of venture capitalists’ funding decisions.  Academy of Management Journal,  52(1), 199-214.

6 Ding, E., & Hursey, T. (2010). Evaluation of the effectiveness of business planning using Palo Alto’s Business Plan Pro. Department of Economics. University of Oregon.

7 Delmar, F., & Shane, S. (2004). Legitimating first: Organizing activities and the survival of new ventures.  Journal of Business Venturing,  19(3), 385-410. doi: 10.1016/s0883-9026(03)00037-5

8 Shane, S., & Delmar, F. (2004). Planning for the market: Business planning before marketing and the continuation of organizing efforts.  Journal of Business Venturing,  19(6), 767-785. doi: 10.1016/j.jbusvent.2003.11.001

9 Hechavarria, D. M., Renko, M., & Matthews, C. H. (2011). The nascent entrepreneurship hub: Goals, entrepreneurial self-efficacy and start-up outcomes.  Small Business Economics,  39(3), 685-701. doi: 10.1007/s11187-011-9355-2

10 Liao, J., & Gartner, W. B. (2006). The effects of pre-venture plan timing and perceived environmental uncertainty on the persistence of emerging firms.  Small Business Economics,  27(1), 23-40. doi: 10.1007/s11187-006-0020-0

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Content Author: Noah Parsons

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

how do business plans develop over time and change as new research is found

Table of Contents

  • Being prepared matters when you’re seeking funding
  • When you start planning is important—the earlier the better
  • You’re less likely to fail if you have a plan

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The Best Ways to Do Market Research for Your Business Plan Showing that you know the state of the market and understand what you need to do to succeed is critical in a business plan. Here's how to gather the facts you need.

By The Staff of Entrepreneur Media, Inc. • Jan 20, 2015

In their book Write Your Business Plan , the staff of Entrepreneur Media, Inc. offer an in-depth understanding of what's essential to any business plan, what's appropriate for your venture, and what it takes to ensure success. In this edited excerpt, the authors discuss the whys and hows of conducting market research.

Market research aims to understand the reasons consumers will buy your product. It studies such things as consumer behavior, including how cultural, societal and personal factors influence that behavior.

Market research is further split into two varieties: primary and secondary. Primary research studies customers directly, whereas secondary research studies information that others have gathered about customers. Primary research might be telephone interviews or online polls with randomly selected members of the target group. You can also study your own sales records to gather primary research. Secondary research might come from reports found on the websites of various other organizations or blogs written about the industry. For your plan, you can use either type of research or a combination of both.

The basic questions you'll try to answer with your market research include:

Who are your customers? Describe them in terms of age, occupation, income, lifestyle, educational attainment, etc.

What do they buy now? Describe their buying habits relating to your product or service, including how much they buy, their favored suppliers, the most popular features and the predominant price points.

Why do they buy? This is the tricky one, attempting as it does to delve into consumers' heads. Answers will depend on the product and its uses. Cookware buyers may buy the products that offer the most effective nonstick surfaces, or those that give the most pans in a package for a given amount of money, or those that come in the most decorative colors.

What will make them buy from you? Although some of these questions may seem difficult, you'd be surprised at the detailed information that's available about markets, sales figures and consumer buying motivations. Tapping information sources to provide the answers to as many questions as you can will make your plan more convincing and your odds of success higher. Also, the business plan software programs have detailed research included and online research available. Utilize this functionality if you're using such software, and add additional data you find elsewhere. The reason to add some of your own unique material is that everyone using the software program is tapping into the same database and you want your business plan to differ from that of the last entrepreneur in your field.

You can also find companies that will sell you everything from industry studies to credit reports on individual companies. Market research isn't cheap. It requires significant amounts of expertise, manpower and technology to develop solid research. Large companies routinely spend tens of thousands of dollars researching things they ultimately decide they're not interested in. Smaller firms can't afford to do that too often.

For companies of all sizes, the best market research is the research you do on your own. In-house market research might take the form of original telephone interviews with consumers, customized crunching of numbers from published sources or perhaps competitive intelligence you've gathered on your rivals through the social media. You can gather detailed research on customers, including their likes, dislikes and preferences, through Facebook, and use Google Analytics to sort out the numbers as they pertain to your web visitors. People are researching and making their opinions felt through their actions on the web, so you can gain a lot of marketing insight by looking closely at what is going on electronically.

You'll also want to do your due diligence within your industry. When looking at comparable businesses (and their data), find a close match. For comparative purposes, consider:

1. Companies of relative size

2. Companies serving the same geographic area, which could be global if you are planning to be a web-based business

3. Companies with a similar ownership structure. If your business has two partners, look for businesses run by a couple of partners rather than an advisory board of 12.

4. Companies that are relatively new. While you can learn from long-standing businesses, they may be successful today because of their 25-year business history and reputation.

You'll want to use the data you've gathered not only to determine how much business you could possibly do but also to figure out how you'll fit into and adapt to the marketplace.

Follow these steps to spending your market research dollars wisely:

1. Determine what you need to know about your market. The more focused the research, the more valuable it will be.

2. Prioritize the results of the first step. You can't research everything, so concentrate on the information that will give you the best (or quickest) payback.

3. Review less-expensive research alternatives. Small Business Development Centers and the Small Business Administration can help you develop customer surveys. Your trade association will have good secondary research. Be creative.

4. Estimate the cost of performing the research yourself. Keep in mind that with the internet you should not have to spend a ton of money. If you're considering hiring a consultant or a researcher, remember this is your dream, these are your goals, and this is your business. Don't pay for what you don't need.

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How to Create a Market Research Plan

Table of contents.

how do business plans develop over time and change as new research is found

While having a great idea is an important part of establishing a business, you’ll only get so far without laying the proper groundwork. To help your business take off, not only do you need to size up the competition, but you also need to identify who will buy your product, how much it will cost, the best approach to selling it and how many people will demand it.

To get answers to these questions, you’ll need a market research plan, which you can create yourself or pay a specialist to create for you. Market research plans define an existing problem and/or outline an opportunity. From there, the marketing strategy is broken down task by task. Your plan should include objectives and the methods that you’ll use to achieve those objectives, along with a time frame for completing the work.

What should a market research plan include?

A market research plan should provide a thorough examination of how your product or service will fare in a defined area. It should include:

  • An examination of the current marketplace and an analysis of the need for your product or service: To know where you fit in the market, it’s important to have a broad understanding of your industry — covering everything from its annual revenue to the industry standards to the total number of businesses operating within it. Start by gathering statistical data from sources like the U.S. Bureau of Labor Statistics and BMI Research and consider the industry’s market size, potential customer base and how external factors such as laws, technology, world events and socioeconomic changes impact it.
  • An assessment of the competition: By analyzing your competitors, you can discover strategies to fill market gaps. This involves identifying well-known competitors and noting trends they employ successfully, scrutinizing customer feedback about businesses in your sector, such as through online reviews, and understanding competitors’ product or service offerings. This knowledge can then guide the refinement of your own products or services to differentiate them from others in the market.
  • Data about customers: Identify which segment of potential customers in your industry you can effectively target, considering their demographics — such as age, ethnicity, income and location and psychographics, including beliefs, values and lifestyle. Learn about the challenges your customers face in their daily lives and determine how the features and benefits of your offerings address their needs.
  • The direction for your marketing in the upcoming year: Your plan should provide a clear roadmap for your marketing strategies for the next year, focusing on approaches to distinguish your brand from competitors. Develop marketing messages that resonate with and display empathy toward your target market and find ways to address customers’ needs and demonstrate value.
  • Goals to be met: Outline goals your business would like to achieve and make these goals clear to all employees on your team. Create goals that are realistic and attainable while also making a meaningful impact on the business’s growth. Consider factors including your target number of products or services, the expected number of units to sell based on market size, target market behavior, pricing for each item and the cost of production and advertising.

How to create your market research plan

Doing business without having a marketing plan is like driving without directions. You may eventually reach your destination, but there will be many costly and time-consuming mistakes made along the way.

Many entrepreneurs mistakenly believe there is a big demand for their service or product but, in reality, there may not be, your prices may be too high or too low or you may be going into a business with so many restrictions that it’s almost impossible to be successful. A market research plan will help you uncover significant issues or roadblocks.

Step 1. Conduct a comprehensive situation analysis.

One of the first steps in constructing your marketing plan is to create a strengths, weaknesses, opportunities and threats (SWOT) analysis , which is used to identify your competition, to know how they operate and then to understand their strengths and weaknesses.

When developing a market research plan, it is essential that you do your homework to determine your possible customer base, to gain knowledge about the competition and to have a solid foundation for your marketing strategy.

Step 2: Develop clear marketing objectives.

In this section, describe the desired outcome for your marketing plan with realistic and attainable objectives, the targets and a clear and concise time frame. The most common way to approach this is with marketing objectives, which may include the total number of customers and the retention rate, the average volume of purchases, total market share and the proportion of your potential market that makes purchases.

Step 3: Make a financial plan.

A financial plan is essentia l for creating a solid marketing plan. The financial plan answers a range of questions that are critical components of your business, such as how much you intend to sell, what will you charge, how much will it cost to deliver your services or produce your products, how much will it cost for your basic operating expenses and how much financing will you need to operate your business.

In your business plan, be sure to describe who you are, what your business will be about, your business goals and what your inspiration was to buy, begin or grow your business.

Step 4: Determine your target audience.

Once you know what makes you stand out from your competitors and how you’ll market yourself, you should decide who to target with all this information. That’s why your market research plan should delineate your target audience. What are their demographics and how will these qualities affect your plan? How do your company’s current products and services affect which consumers you can realistically make customers? Will that change in the future? All of these questions should be answered in your plan.

Step 5: List your research methods.

Rarely does one research avenue make for a comprehensive market research plan. Instead, your plan should indicate several methods that will be used to determine the market share you can realistically obtain. This way, you get as much information as possible from as many sources as possible. The result is a more robust path toward establishing the exact footprint you desire for your company.

A good market research plan involves using more than one type of research to obtain the information you need.

Step 6: Establish a timeline.

With your plan in place, you’ll need to figure out how long your market research process will take. Project management charts are often helpful in this regard as they divide tasks and personnel over a timeframe that you have set. No matter which type of project management chart you use, try to build some flexibility into your timeframe. A two-week buffer toward the home stretch comes in handy when a process scheduled for one week takes two — that buffer will keep you on deadline.

Step 7: Acknowledge ethical concerns.

Market research always presents opportunities for ethical missteps. After all, you’ll need to obtain competitor information and sensitive financial data that may not always be readily available. Your market research plan should thus encourage your team to not take any dicey steps to obtain this information. It may be better to state, “we could not obtain this competitor information,” than to spy on the competitor or pressure their current employees for knowledge. Plus, there’s nothing wrong with simply feeling better about the final state of your plan and how you got it there.

Using a market research firm

If the thought of trying to create your own market research plan seems daunting or too time-consuming, there are plenty of other people willing to do the work for you.

You don’t need to pay thousands of dollars for assistance crafting a market research plan. University business schools often provide free resources that can assist you.

Pros of using a market research firm

As an objective third party, businesses can benefit from a market research firm’s impartial perspective and guidance, helping to shape impactful brand strategies and marketing campaigns. These firms, which can help businesses with everything from their marketing campaigns to brand launches, deliver precise results, drawing on their expertise and experience to provide in-depth insights and solutions tailored specifically to your company’s needs. 

Even more, working with a market research firm can elevate a brand above the competition, as they provide credible and unique research that is highly valued by the media, enhancing brand credibility and potentially increasing website traffic, social media shares and online visibility.

Cons of using a market research firm

Although hiring a firm can provide businesses with tremendous results, certain downsides can lead a business toward the do-it-yourself route. Most notably, market research firms can be a costly expense that some businesses can’t afford. However, businesses that can allocate the funds will likely see a positive return on investment, as they are paying for the expertise and proficiency of seasoned professionals in the field.

Additionally, finding the right market research firm for your business’s needs can take some time — and even longer, ranging from weeks to months, for a market research firm to complete a plan. This lack of immediate results can be detrimental for businesses that don’t have the time to wait. 

Market research firms can charge into the thousands of dollars for a market research plan, but there are ways to get help more affordably, including:

  • Outline your plans carefully and spell out objectives.
  • Examine as many sources as possible.
  • Before paying for any information, check with librarians, small business development centers or market research professors to see if they can help you access market research data for free.
  • You may think you’ll need to spend a hefty sum to create a market research plan, but there are plenty of free and low-cost sources available, especially through university business schools that will guide you through the process.

Miranda Fraraccio contributed to this article. 

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How to Start a Profitable Research And Development Business [11 Steps]

Nick

By Nick Cotter Updated Feb 02, 2024

research and development business image

Business Steps:

1. perform market analysis., 2. draft a research and development business plan., 3. develop a research and development brand., 4. formalize your business registration., 5. acquire necessary licenses and permits for research and development., 6. open a business bank account and secure funding as needed., 7. set pricing for research and development services., 8. acquire research and development equipment and supplies., 9. obtain business insurance for research and development, if required., 10. begin marketing your research and development services., 11. expand your research and development business..

Launching a research and development business begins with a thorough understanding of the market landscape. A comprehensive market analysis will help you identify your potential customers, competitors, and overall industry trends. Here are key points to consider when performing your market analysis:

  • Define your target market: Understand who your potential customers are, what needs they have, and how your R&D business can meet those needs.
  • Analyze competition: Research existing companies in your niche, their product offerings, market share, strengths, and weaknesses.
  • Assess market trends: Look into current and future trends that may affect your industry, including technological advancements, regulatory changes, and funding availability.
  • Identify market gaps: Spot opportunities for innovation by finding areas where customer needs are not being met by current products or services.
  • Understand regulatory environment: Investigate the legal and compliance requirements relevant to your industry and how they might impact your business operations.
  • Collect and analyze data: Use surveys, interviews, and secondary research reports to gather quantitative and qualitative data that will inform your business strategy.

research and development business image

Are Research And Development businesses profitable?

Yes, research and development businesses can be profitable. Depending on the type of research and products developed, these businesses can generate revenue from sales, licensing fees, and other forms of income. Additionally, research and development businesses can benefit from government grants and tax incentives.

Creating a research and development business plan is a pivotal step in transforming innovative ideas into marketable products or services. This plan serves as a roadmap for your R&D activities, ensuring they are aligned with your business goals and objectives. Consider the following key points when drafting your plan:

  • Define your business vision, mission, and objectives to guide all R&D efforts.
  • Identify the target market or sector for your R&D outcomes and analyze market needs and trends.
  • Detail the specific technologies, products, or processes that will be the focus of your R&D.
  • Establish a clear timeline for research phases, development milestones, and market entry.
  • Outline the team expertise and resources required, including any partnerships or collaborations.
  • Prepare a budget that encompasses staffing, equipment, materials, and other R&D expenses.
  • Address intellectual property management, ensuring protection of innovations and compliance with regulations.
  • Develop risk management strategies to mitigate potential challenges and obstacles.
  • Include a financial plan with projections on R&D investment returns and funding strategies.

How does a Research And Development business make money?

Research and Development businesses make money by providing unique services to their target audiences. For example, a Research and Development business that focuses on antique business images might target antique business owners, antique collectors, or other professionals with an interest in antique business images. This business might offer services such as custom antique business image design, restoration, or digitization. These services would be provided to the target audience in exchange for a fee, generating revenue for the Research and Development business.

Developing a strong research and development (R&D) brand is a critical step in establishing your business within the competitive landscape. It reflects your company's vision, expertise, and the innovative value you offer. Here's how you can create a compelling R&D brand:

  • Define Your Vision: Articulate a clear and forward-thinking vision statement that aligns with your R&D goals and resonates with your target audience.
  • Identify Your Unique Selling Proposition (USP): Determine what sets your R&D business apart from competitors and emphasize that uniqueness in your branding.
  • Create a Memorable Name and Logo: Choose a brand name and design a logo that is distinctive, relevant, and reflects the essence of your R&D work.
  • Establish Brand Values: Select core values that represent your brand's ethics and approach to research, which will help build trust and credibility.
  • Consistent Messaging: Ensure all communications, from marketing materials to research publications, consistently convey your brand's voice and message.
  • Engage with Your Community: Actively participate in industry events, forums, and social media to increase visibility and establish your brand as a thought leader.
  • Protect Intellectual Property: Safeguard your brand by registering trademarks and patents to prevent imitation and reinforce your market position.

How to come up with a name for your Research And Development business?

When coming up with a name for your Research And Development business, it is important to keep in mind what the company does and what it stands for. Brainstorming is a great way to come up with creative ideas. Additionally, doing some research on existing Research And Development businesses can be helpful to get inspiration. Lastly, try to make a name that is memorable, creative, and reflects the mission of your business.

image of ZenBusiness logo

Formalizing your business registration is a pivotal step in legitimizing your research and development business. This process varies by location, but certain universal steps must be taken to ensure your business operates within the legal framework. Follow these guidelines to register your business properly:

  • Choose a business structure (e.g., sole proprietorship, partnership, LLC, corporation) that aligns with your needs for liability protection, taxation, and business scale.
  • Register your business name with the appropriate government body, ensuring it's unique and meets all naming requirements for your jurisdiction.
  • Obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) if you're in the US, or the equivalent in your country, which is necessary for tax purposes.
  • Register for state and local taxes, as required, to ensure you're set up to pay sales, use, income, and employment taxes as necessary.
  • Acquire all necessary permits and licenses specific to the research and development industry, which may include local, state, or federal approvals depending on the nature of your work.
  • File for intellectual property protection if your business involves unique inventions, proprietary technology, or trade secrets.

Resources to help get you started:

Explore key resources designed for research and development entrepreneurs, providing access to the latest market trends, operational best practices, and strategies for business expansion:

  • Harvard Business Review: Offers articles and case studies on innovation and R&D management strategies. Visit site .
  • MIT Sloan Management Review: Provides insights on leading through innovation and the effective use of R&D resources. Visit site .
  • R&D World: Features news, trends, and analysis for R&D leaders, including annual reports on global R&D funding forecasts. Visit site .
  • Springer Nature’s Journal of Research-Technology Management: Scholarly articles focused on the intersection of research, technology, and management practices. Visit site .
  • CB Insights Research: Publishes tech market intelligence reports that cover various sectors, including predictive insights on emerging tech sectors relevant for R&D. Visit site .

Starting a research and development business may require specific permits, especially if your R&D involves hazardous materials, biomedical research, or other regulated areas. Ensure compliance with all relevant regulations. Key requirements include:

  • Business License: Secure a general business license from your local municipality.
  • Specialized Permits: Depending on your field, you may need permits from environmental, health, or industry-specific regulatory agencies.

Securing your business's financial foundation is a crucial step in the establishment of your research and development company. Opening a business bank account is essential for managing your finances and transactions professionally. If your project requires additional capital, exploring funding options becomes equally important. Here's how to proceed:

  • Research banks that offer business accounts with benefits suitable to your R&D business needs, such as low fees, high transaction limits, and robust online banking services.
  • Prepare the necessary documentation, which typically includes your business formation papers, EIN (Employer Identification Number), and personal identification.
  • Compare the terms and conditions of different banks, including any business loans or lines of credit they may offer.
  • For funding, consider government grants specifically for R&D, venture capital from investors interested in innovation, or business loans if you have a solid business plan with financial projections.
  • Network with other entrepreneurs and attend industry events to discover potential angel investors or partners willing to contribute funding.
  • Explore crowdfunding platforms if your R&D project has a strong appeal to the general public or offers innovative consumer products.

Setting the right pricing for research and development services is crucial to ensure your business is competitive and profitable. It involves considering various factors like cost, market demand, perceived value, and the nature of the innovation. Here's a guide to help you establish a pricing strategy:

  • Cost-Plus Pricing: Calculate the total costs of providing your service, including direct and indirect expenses, and add a markup percentage for profit.
  • Value-Based Pricing: Determine the price based on the perceived or estimated value your service will bring to the customer, rather than just the cost of the service itself.
  • Competitive Analysis: Research what competitors are charging for similar services and position your pricing in a way that reflects your unique value proposition.
  • Flexible Pricing Models: Offer different pricing structures, such as hourly rates, project-based fees, or retainer models, to cater to various client needs and project scopes.
  • Dynamic Pricing: Adjust prices based on demand, with the flexibility to offer discounts or premium charges depending on the market conditions and client relationships.
  • Transparency: Clearly communicate what is included in the price and any potential additional costs to foster trust and avoid misunderstandings with clients.

What does it cost to start a Research And Development business?

Initiating a research and development business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $1169000 for launching such a research and developmentbusiness. Please note, not all of these costs may be necessary to start up your research and development business.

Starting a research and development business involves meticulous planning, particularly when it comes to acquiring the right equipment and supplies. These are essential tools that will enable your team to innovate, experiment, and develop new products or technologies. Below, you'll find a step-by-step guide to help you make informed decisions about the equipment and supplies you need.

  • Assess Your Needs: Begin with a thorough assessment of the specific equipment and supplies your research and development activities will require. Consider the nature of your projects and the scale of your operations.
  • Source Suppliers: Research and identify reputable suppliers who specialize in high-quality research and development equipment. Look for vendors that offer competitive pricing, good customer service, and reliable support.
  • Compare Prices and Quality: Obtain quotes from multiple suppliers to compare prices. However, ensure you also consider the quality and longevity of the equipment.
  • Consider Second-Hand Equipment: For cost savings, consider purchasing certified pre-owned or gently used equipment from trusted sources.
  • Plan for Future Needs: Invest in scalable equipment that can grow with your business, avoiding the need for frequent upgrades.
  • Secure Financing: Explore financing options if the upfront cost of equipment is prohibitive, such as leasing or payment plans.
  • Review Warranties and Service Agreements: Ensure that the equipment comes with a solid warranty and check if the supplier provides service agreements for maintenance and repairs.
  • Purchase Consumables in Bulk: Save on recurring costs by buying consumable supplies in bulk, but be wary of shelf life and storage requirements.
  • Stay Updated on New Technologies: Keep abreast of the latest advancements in equipment and tools that could benefit your R&D processes and consider investing in them.

List of Software, Tools and Supplies Needed to Start a Research And Development Business:

  • Software development tools
  • Internet access
  • Research materials and resources
  • Office supplies and stationery
  • Laboratory equipment
  • Analytical tools
  • Laboratory supplies
  • Prototyping materials
  • Marketing materials

Protecting your research and development business with appropriate insurance is a critical step in safeguarding your assets, intellectual property, and the overall health of your enterprise. It's crucial to assess the risks specific to your field and acquire insurance that addresses those potential vulnerabilities. Below are key considerations to guide you in obtaining the right business insurance:

  • Evaluate Risks: Consider the types of risks your business might face, such as property damage, liability issues, or data breaches. This will help determine the necessary coverage.
  • Consult with Professionals: Speak with an insurance broker who specializes in business insurance. They can provide tailored advice and help you understand the specific policies that suit your R&D business.
  • Consider Intellectual Property Insurance: Given the nature of R&D, protecting your intellectual property (IP) is crucial. IP insurance can help cover legal costs in case of infringement disputes.
  • General Liability Insurance: This is a foundational insurance that covers bodily injury, property damage, and advertising injury claims against your business.
  • Product Liability Insurance: If your R&D involves creating prototypes or products, this insurance can protect against claims related to product defects.
  • Review Regularly: As your business evolves, so will your insurance needs. Make it a practice to review and adjust your insurance policies annually or when significant changes occur.

Successfully launching your research and development services requires a strategic marketing approach. By effectively promoting your unique capabilities and expertise, you can attract clients who are seeking innovative solutions to complex problems. Here are several steps to consider when beginning to market your R&D services:

  • Identify Your Target Market: Clearly define who will benefit most from your services, whether it's startups, large corporations, or specific industries.
  • Develop a Strong Brand: Create a memorable brand identity, including a professional logo and a compelling tagline that conveys the essence of your R&D services.
  • Build a Professional Website: Launch an informative website that showcases your expertise, services, and past projects to establish credibility.
  • Utilize Content Marketing: Share your knowledge through blogs, white papers, and case studies to demonstrate thought leadership in your field.
  • Network and Collaborate: Attend industry conferences and networking events to build relationships and collaborate with potential clients and partners.
  • Leverage Social Media: Use platforms like LinkedIn and Twitter to connect with your audience and share insights and updates about your R&D work.
  • Consider Paid Advertising: Invest in targeted ads on search engines and social media to reach potential clients actively searching for R&D services.

Once your research and development business is established, expanding your operations can help in tapping into new markets and opportunities. A thoughtful approach to scaling up will ensure sustainability and innovation continue to thrive. Here are key strategies to consider:

  • Explore partnerships with universities and industry leaders to gain access to a wider range of expertise and cutting-edge technology.
  • Diversify your R&D portfolio by investing in new areas that align with emerging trends and customer demands.
  • Apply for additional funding through grants, venture capital or partnerships to finance your expansion efforts.
  • Enhance your facilities and equipment to support increased capacity and more sophisticated research projects.
  • Attract top talent by offering competitive salaries, professional development opportunities, and a collaborative work environment.
  • Invest in intellectual property protection to safeguard your innovations and establish a competitive edge in the market.
  • Use data analytics to assess market needs and direct your R&D efforts more effectively.
  • Expand your geographical reach through global collaborations or setting up satellite research labs in strategic locations.

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Q&a: how – and why – we’re changing the way we study tech adoption.

What share of U.S. adults have high-speed internet at home ? Own a smartphone? Use social media ?

Pew Research Center has long studied tech adoption by interviewing Americans over the phone. But starting with the publications released today, we’ll be reporting on these topics using our National Public Opinion Reference Survey (NPORS) instead. The biggest difference: NPORS participants are invited by postal mail and can respond to the survey via a paper questionnaire or online, rather than by phone.

To explain the thinking behind this change and its implications for our future work, here’s a conversation with Managing Director of Internet and Technology Research Monica Anderson and Research Associate Colleen McClain. This interview has been condensed and edited for clarity.

Pew Research Center has been tracking tech adoption in the United States for decades. Why is this area of study so important?

how do business plans develop over time and change as new research is found

Anderson: We see this research as foundational to understanding the broader impact that the internet, mobile technology and social media have on our society.

Americans have an array of digital tools that help them with everything from getting news to shopping to finding jobs. Studying how people are going online, which devices they own and which social media sites they use is crucial for understanding how they experience the world around them.

This research also anchors our ongoing work on the digital divide : the gap between those who have access to certain technologies and those who don’t. It shows us where demographic differences exist, if they’ve changed over time, and how factors like age, race and income may contribute.

Our surveys are an important reminder that some technologies, like high-speed internet, remain out of reach for some Americans, particularly those who are less affluent. In fact, our latest survey shows that about four-in-ten Americans living in lower-income households do not subscribe to home broadband.

Why is your team making the switch from phone surveys to the National Public Opinion Reference Survey (NPORS)?

how do business plans develop over time and change as new research is found

McClain: The internet hasn’t just transformed Americans’ everyday lives – it’s also transformed the way researchers study its impact. The changes we’ve made this year set us up to continue studying tech adoption long into the future.

We began tracking Americans’ tech use back in 2000. At that point, about half of Americans were online, and just 1% had broadband at home. Like much of the survey research world, we relied on telephone polling for these studies, and this approach served us well for decades.

But in more recent years, the share of people who respond to phone polls has plummeted , and these types of polls have become more costly. At the same time, online surveys have become more popular and pollsters’ methods have become more diverse . This transformation in polling is reflected in our online American Trends Panel , which works well for the vast majority of the Center’s U.S. survey work.

But there’s a caveat: Online-only surveys aren’t always the best approach when it comes to measuring certain types of data points. That includes measuring how many people don’t use technology in the first place.

Enter the National Public Opinion Reference Survey, which the Center launched in 2020 to meet these kinds of challenges. By giving people the choice to take our survey on paper or online, it is especially well-suited for hearing from Americans who don’t use the internet, aren’t comfortable with technology or just don’t want to respond online. That makes it a good fit for studying the digital divide. And NPORS achieves a higher response rate than phone polls .  

Shifting our tech adoption studies to NPORS ensures we’re keeping up with the latest advances in the Center’s methods toolkit, with quality at the forefront of this important work.

The internet hasn’t just transformed Americans’ everyday lives – it’s also transformed the way researchers study its impact. The changes we’ve made this year set us up to continue studying tech adoption long into the future. Colleen McClain

Are the old and new approaches comparable?

McClain: We took several steps to make our NPORS findings as comparable as possible with our earlier phone surveys. We knew that it can be tricky, and sometimes impossible, to directly compare the results of surveys that use different modes – that is, methods of interviewing. How a survey is conducted can affect how people answer questions and who responds in the first place. These are known as “mode effects.”

To try to minimize the impact of this change, we started by doing what we do best: gathering data.

Around the same time that we fielded our phone polls about tech adoption in 2019 and 2021, we also fielded some surveys using alternate approaches. We didn’t want to change the mode right away, but rather understand how any changes in our approach might affect the data we were collecting about how Americans use technology.

These test runs helped narrow our options and tweak the NPORS design. Using the 2019 and 2021 phone data we collected as a comparison point, we worked over the next few years to make the respondent experience as similar as possible across modes.

What does your new approach mean for your ability to talk about changes over time?

McClain: We carefully considered the potential for mode effects as we decided how to talk about the changes we saw in our findings this year. Even with all the work we did to make the approaches as comparable as possible, we wanted to be cautious.

For instance, we paid close attention to the size of any changes we observed. In some cases, the figures were fairly similar between 2021 and 2023, and even without the mode shift, we wouldn’t make too much of them.

We gave a thorough look at more striking differences. For example, 21% of Americans said they used TikTok in our 2021 phone survey, and that’s risen to 33% now in our paper/online survey. Going back to our test runs from earlier years helped us conclude it’s unlikely this change was all due to mode. We believe it also reflects real change over time.

While the mode shift makes it trickier than usual to talk about trends, we believe the change in approach is a net positive for the quality of our work. NPORS sets us up well for the future.

How are you communicating this mode shift in your published work?

A line chart showing that most U.S. adults have a smartphone, home broadband.

McClain: It’s important to us that readers can quickly and easily understand the shift and when it took place.

In some cases, we’ll be displaying the findings from our paper/online survey side by side with the data points from prior phone surveys. Trend charts in our reports signal the mode shift with a dotted line to draw attention to the change in approach. In our fact sheets , a vertical line conveys the same thing. In both cases, we also provide information in the footnotes below the chart itself.

In other places in our publications, we’re taking an even more cautious approach and focusing on the new data rather than on trends.

Did you have to change the way you asked survey questions?

McClain: Writing questions that keep up with the ever-changing nature of technology is always a challenge, and the mode shift complicated this further. For example, our previous phone surveys were conducted by interviewers, but taking surveys online or on paper doesn’t involve talking to someone. We needed to adapt our questions to keep the experience as consistent as possible on the new paper and online surveys.

Take who subscribes to home broadband, for example. Knowing we wouldn’t have an interviewer to probe and confirm someone’s response in the new modes, we tested out different options in advance to help us ensure we were collecting quality data.

In this case, we gave people a chance to say they were “not sure” or to write in a different type of internet connection, if the ones we offered didn’t quite fit their situation. We also updated the examples of internet connections in the question to be consistent with evolving technology.

Which findings from your latest survey stand out to you?

Anderson: There are several exciting things in our latest work, but two findings related to social media really stand out.

The first is the rise of TikTok. A third of U.S. adults – including about six-in-ten adults under 30 – use this video-based platform. These figures have significantly jumped since we last asked these questions in 2021. And separate surveys from the Center have found that TikTok is increasingly becoming a news source for Americans , especially young adults.

The second is how dominant Facebook remains. While its use has sharply declined among teens in the U.S. , most adults – about two-thirds – say they use the site. And this share has remained relatively stable over the past decade or so. YouTube is the only platform we asked about in our current survey that is more widely used than Facebook.

These findings reinforce why consistently tracking the use of technology, especially specific sites and apps, is so important. The online landscape can evolve quickly. As researchers who study these platforms, a forward-looking mindset is key. We’ll continue looking for new and emerging platforms while tracking longer-standing sites to see how use changes – or doesn’t – over time.

To learn more about the National Public Opinion Reference Survey, read our NPORS fact sheet . For more on Americans’ use of technology, read our new reports:

  • Americans’ Use of Mobile Technology and Home Broadband
  • Americans’ Social Media Use

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What the data says about americans’ views of artificial intelligence, about 1 in 5 u.s. teens who’ve heard of chatgpt have used it for schoolwork, as ai spreads, experts predict the best and worst changes in digital life by 2035, most popular.

About Pew Research Center Pew Research Center is a nonpartisan fact tank that informs the public about the issues, attitudes and trends shaping the world. It conducts public opinion polling, demographic research, media content analysis and other empirical social science research. Pew Research Center does not take policy positions. It is a subsidiary of The Pew Charitable Trusts .

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Research Project Business Plan

MAY.26, 2015

Research Project Business Plan

Research projects can take many forms and have just as many purposes. They are conducted by business people, researchers, and students, and in all cases a research project business plan is needed if funding is required. However, even if funding is not needed, the business plan documents an operating plan for project success.

This particular type of business plan can follow the traditional form if activities like marketing and staffing are involved. However, in many cases the business plan must be adapted to accommodate project information and needs because the project does not fit a traditional business model.

research project business plan

Expanding Knowledge

The purposes of a research project include expanding factual knowledge, but usually much more is involved. The typical business research project requires data collection and analyzation, interpretation of results, drawing conclusions, making recommendations, and developing a budget or financial performance statements. For example, a pharmaceutical company might be interested in developing a new biologic drug.

The company develops a research project business plan to submit to grantors, but the plan also serves the business as an operating guideline.

Business research projects answer questions like the following:

• What will the project accomplish? Like any business plan, the Executive Summary should clearly describe the intent of the proposal.

• What market opportunity exists that the company believes it can meet?

• What were the sources of data and the methods of data analyzation used?

• Who will manage and conduct the research project?

• What market solutions were developed? These are the conclusions of the research project?

• What is the projected costs of the research project, and what are the expected revenues should the market solutions be put into place?

Customization Required

If investors are needed, the research project business plan is customized to meet their needs also. However, some research projects are requesting grant funds to fund just the research, with no expectation of generating revenue, so the ROI of the project is not necessarily important. Each of the business plans for research projects are individualized.

OGS Capital specializes in writing customized business plans for businesses, research facilities and researchers, and others. To discuss business plan needs, contact OGS Capital by submitting the short online form. Download Sample From Here

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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    One study (1) published in 2010 aggregated research on the business growth of 11,046 companies and found that planning improved business performance. Interestingly, this same study found that planning benefited existing companies even more than it benefited startups. But, this study still doesn't answer the question it raises:

  12. How To Write A Business Plan (2024 Guide)

    Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...

  13. 14 Factors To Research Before Entering A New Business Market

    If you're excited about the business potential, but wondering if you'll be making the right decision for your company, below Forbes Business Development Council members provide 14 points...

  14. How to Conduct Research for Your Business Plan

    How to Conduct Research for Your Business Plan AllBusiness Editors Business Planning If your initial research about the market supports the notion that you have a potentially successful business idea, you then need research to support the strategies and examples in your business plan.

  15. The Best Ways to Do Market Research for Your Business Plan

    1. Determine what you need to know about your market. The more focused the research, the more valuable it will be. 2. Prioritize the results of the first step. You can't research everything, so ...

  16. Write your business plan

    Executive summary. Briefly tell your reader what your company is and why it will be successful. Include your mission statement, your product or service, and basic information about your company's leadership team, employees, and location. You should also include financial information and high-level growth plans if you plan to ask for financing.

  17. Using Market Research to Develop Effective Business Plans

    Research is really about communicating. When planning, all of the business functions make their plans to respond to where the firm is going in the next 12 months. And good plans are collaborative ...

  18. Creating a Winning Business Plan: A Brief Guide to Research ...

    The first step in writing a successful business plan is to conduct thorough research on your industry, target market, and competition. This research will help you understand the current...

  19. Creating a Successful Market Research Plan

    A market research plan will help you uncover significant issues or roadblocks. Step 1. Conduct a comprehensive situation analysis. One of the first steps in constructing your marketing plan is to create a strengths, weaknesses, opportunities and threats (SWOT) analysis, which is used to identify your competition, to know how they operate and ...

  20. Research And Development Business Plan Template & Guidebook

    1. Describe the Purpose of Your Research And Development Business. The first step to writing your business plan is to describe the purpose of your research and development business. This includes describing why you are starting this type of business, and what problems it will solve for customers.

  21. How to Start a Profitable Research And Development Business ...

    1. Perform market analysis. 2. Draft a research and development business plan. 3. Develop a research and development brand. 4. Formalize your business registration. 5. Acquire necessary licenses and permits for research and development. 6. Open a business bank account and secure funding as needed. 7.

  22. How To Write a Research Plan (With Template and Examples)

    If you want to learn how to write your own plan for your research project, consider the following seven steps: 1. Define the project purpose. The first step to creating a research plan for your project is to define why and what you're researching. Regardless of whether you're working with a team or alone, understanding the project's purpose can ...

  23. we're changing the way we study tech adoption

    We'll continue looking for new and emerging platforms while tracking longer-standing sites to see how use changes - or doesn't - over time. To learn more about the National Public Opinion Reference Survey, read our NPORS fact sheet. For more on Americans' use of technology, read our new reports:

  24. How to Write a Research Project Business Plan

    The typical business research project requires data collection and analyzation, interpretation of results, drawing conclusions, making recommendations, and developing a budget or financial performance statements. For example, a pharmaceutical company might be interested in developing a new biologic drug. The company develops a research project ...