How To Write a Business Plan Part 7 – Your Market Opportunity Slide: NEW! Business Podcast
Part 7 of How to Write Your Business Plan where I give you the method to figure out how big your market opportunity is for your business.
This is where it starts to get exciting because we’re talking about how many potential customers we have which will later tell us how much money we can make
You’ve given your elevator pitch, set up the problem your product addresses, given a solution, talked about your product, now it’s time to talk about the size of your market and how you’re going to attack it.
I explain exactly how to approach it and what one big mistake to avoid
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A full transcript of the episode is below
Hey, everyone, welcome to another episode of Build a Business Success Secrets. I am your host, Brandon C White. And today we continue our series of how to build a business plan in 13 slides.
We are on Part seven, your market opportunity, and we started with Slide one, which is your elevator pitch, and we talked about a formula to use to get your elevator pitch done quickly.
We went then into your problem slide, and we set up the problem that your product or service is addressing. And then we did your solution slide.
And in the last episode we talked about your product. We’re getting into the meat and potatoes of things, and today we are on part seven of market opportunity, and I am going to talk about the number one thing that you want to avoid when building out your market opportunity, including your strategy to attack the market.
So make sure you tune in. Let’s not waste another second. Let’s get right to the episode. All right, everyone, we are on part seven of how to build your market opportunity slide part of how to build a business plan series and I first want to address a huge mistake that I have made personally in that I see entrepreneurs making all the time.
I teach this and we go over the entire lesson. We walk through examples, and then people will send either business plan decks or their pitch decks with it wrong. So I’m going to cut to the chase and make this really simple for you so that we don’t have to guess.
The biggest mistake that people make when speaking out or building their market opportunity is they go from the top down, so it would be something like this.
We are going to attack the automotive parts market, and we’re going to grab 1% of this multi billion dollar market, and that’s going to equate into $30 million a year of revenue. That will pretty much seal the deal, that you are going to be very frustrated and not be successful in executing on your business.
And here’s why.
It just too broad. You can’t address every part of that market with your product. If you’re making air filters, you’re gonna address an air filter part of that market. If you are making windshield wipers, you are going to address a piece of this large market and it doesn’t matter that it’s not, ah, $100 billion your larger auto part market. Maybe that.
But you want to whittle it down and understand exactly what part of this market you are going to start with. And I would argue that it used to be really small, and this isn’t gonna feel good because you’re gonna say, Brandon, this is not a big market.
But let me tell you a quick story. So I’ve started my first company. It was an online fishing site, and I started in my backyard. It was the Chesapeake Bay on the East Coast, and specifically I started in Maryland. And then I grew and it was called Chesapeake Angler to start, we got a whole bunch of attention and we started growing, and I said, You know what?
Now I’m fast forwarding through the story here. There’s a longer story that I wrote with 24,000 words on my blog, but you can check out, which is step by step on how to build an online business and exactly how I did it.
But I’m gonna make this short and give you the cliff notes today on this podcast is I started just speaking, Glor. I said, Well, I’m gonna take over the whole world. Bill Worldwide angler covered the entire United States and four international destinations.
Now, how do you think that? How do you think that went? It was a big struggle, and I did it too fast because I did have a foothold in my local market. But I didn’t own it.
And we expanded too fast and long and short was spent a lot of money, and we had success. But we got frustrated a lot of the time. And when the market crashed, I bought that company back. I renamed it called Title Fish. And I basically said, I’m gonna take all the lessons I learned. And I’m even though I’m gonna want to take over the world again, I am going to really get specific on what my serviceable available market is, what share of that I want. And I’m just gonna focus on it. And I’m not gonna get distracted now.
I can’t tell you how many times I want to take over the world. But here’s what I figured out my part of the market. What title fish Waas title waters in the Chesapeake Bay, Maryland, Virginia, Delaware.
That was it.
Any Title river? I was not going to do freshwater fishing. I wasn’t going to do pond fishing. It was only going to do title water fishing.
So is effectively saltwater fisherman in the Chesapeake Bay. And I said, If I can own this market now, the fishing market in the United States is around $50 billion. Huge market, and we all want to address a big market, make a bunch of money.
But if you say that I’m going to get 1% of that market, it doesn’t give you a strategy to start. So I started right in my backyard. I effectively said, If I own this market, not only can I build a big business and make a good living and good profits, but someday somebody’s gonna want to buy this because I own it.
So I execute on that strategy and turned out it worked. Eventually someone came. They couldn’t get into my niche market, a sub segment of fishermen, salt water and then this region because I was too entrenched and I had built a brand, and then you get an exit so you could do this with anything any of your products.
I don’t care a product or service. Start with the larger market and then figure out what part of that market you are going to focus on, what the customers look like in that market and then execute regionally.
I do not care if we’re going back to the auto part. Example. If you are selling windshield wipers, sell windshield wipers to a specific part of that market. Maybe it’s high end cars. You have a super duper windshield wiper sell super duper windshield wipers and let’s say you live in Half Moon Bay, California where I live.
We’re going to sell first super duper windshield wipers to every super duper car in Half Moon Bay, and we’re going to not leave until we own that market.
Why? Cause we can drive to the stores. We can promote it easily and we can execute. Then once we get past Half Moon Bay, we’re going to go over to San Mateo, and we’re gonna own San Mateo, a larger town on the San Francisco Bay Area peninsula.
Then we’re going to dominate sama tail, and once we do say, Matteo going to start to expand to the larger peninsula from San Francisco to San Jose and we’re gonna own the peninsula.
We’re not gonna get distracted with all the fancy cars in Los Angeles. We’re not going to get distracted with all of them in Seattle, Washington, D C. New York, Houston, Dallas, Denver We’re not gonna get We’re not gonna get distract. We’re gonna focus right on there. So you want to think of it this way?
You You do want to understand the larger market, and ultimately you will be getting a percentage. But your strategy isn’t I’m going to get 1%. Your strategy is thinking about it in circles.
If you are, think about peeling an onion so you’re going to have your total market. Then you’re gonna have your total addressable market because you can’t address everyone. Then you’re gonna have your serviceable available market. Then you’re gonna have your share of that market.
And what you want to do is build it from the ground up. Go do your research. There’s tons of sites out there. U S census. The U. S. Economic department has incredible statistics on things Industry association just used Google. Google is your friend. You can google almost anything out there and understand that, and then you really start to niche down and then build your strategy from the ground up.
Do not present on this slide that you have a $50 billion fishing market or a $30 billion auto parts market or whatever of some large market. You’re going to get a percentage. Actually show your strategy.
And what this does is one is if you’re raising money, investors want to see that because it’s doable to is your team is going to know how to execute, and it’s going to give you a sales and marketing strategy that’s realistic because you’re not gonna advertise to the entire world.
It’s a lot easier to advertise in your local market. Start their dominate learn. It’s close to home, you condone. Dr People will know you. You can leverage your local community and people who know you just from being around.
And even if they don’t know you when you walk in and you say you’re from somewhere, you’re going to get a much more receptive opening and then you’re going to use that as your stronghold and then you’re gonna use that leverage to go over into your next town and start to expand your distributors.
So think of building your market opportunity that way, and you will be on the right track. Now, your slide can actually just look like a bunch of circles that get smaller. So you have the small circle would be your share of the market.
Ah, larger circle would be the serviceable available market. The larger circle after that would be the total addressable market. And then you have this total huge market that is out there, which we all none of us can address all of that.
So give it a try and you will be in good shape. All right, well, that was pretty easy. And if you avoid that mistake, you will be in really good shape.
So don’t be scared that the market’s not as huge as you might want it to be. But stay focused from your local small part of the market and then build a strategy out from there and you will be on your way to building your business.
And hey, if you enjoyed this episode, please hit subscribe so you stay updated with our weekly episodes. Rate us. Leave us a review. I want to hear what you think and please tell a friend Pass it along. Let someone else benefit from this, that it would help them.
Especially with this episode, because getting this market size and strategy wrong can just close really screw up your business. You’ll be frustrated and waste a lot of time and money, and I don’t want you to do that.
Hey, until the next episode. Remember, you are just one business plan away. I’m rooting for your success. We’ll see you in the next episode.