The FT Essential Guide to Writing a Business Plan, 3rd Edition

CHAPTER 3

MARKET DEMAND

‘The only function of economic forecasting is to make astrology look respectable.’

John Kenneth Galbraith

In this chapter:

• ■Market size
• ■Market growth
  • –A web of information
  • –The HOOF approach to demand forecasting
• ■Market demand for a start-up
  • –Test marketing
  • –Estimating your addressable market
• ■Market demand risks and opportunities

The analysis of market demand must come right up front in your business plan, whether yours is a start-up or an established business. It is the crux of the plan.

Your products or services address a marketplace that’s also served by other ­producers or service providers. That market must be of sufficient size, now and in the future, to support at least your business, not to mention your ...