3. Industry Analysis
Why Your Industry Analysis is Important
The Industry Analysis section tells the reader about your industry/marketplace. It is important since readers want to know a) that you are an expert in your market and b) that the market is large enough to support your company and industry trends are working in your favor.
What to Include
The Industry Analysis section has two sub-sections: Market Overview and Relevant Market Size.
Here you will discuss the characteristics of your market. How big is it in units and/or revenues? Is the market growing? What are the trends facing your market?
As much as possible, cite established organizations to lend validity to your research. For example, you can say that according to XYZ Research firm or the National Restaurant Association, restaurant sales were $X billion last year and are expected to grow to $Y billion next year.
Importantly, show how the research supports your success. For example, a growing market size clearly supports you. But for example, if research shows customer needs are shifting in a way that makes them more likely to buy from your company, this is something you want to highlight.
Relevant Market Size
Your relevant market size is the annual revenue that your company could attain if we owned 100% market share.
The formula is simple.
First, enter the number of customers who might be interested in purchasing your products and/or services each year.
Then enter the monetary amount these customers might be willing to spend, on an annual basis, on your products and/or services.
The product of these two figures is your relevant market size. Calculate this figure here so your readers understand the size of your market opportunity and can confirm it’s big enough (particularly if you are seeking debt or equity capital).