Once upon a time, we had no smartphones or connected devices. Now, it’s hard to imagine a world without them.
When companies first introduced these devices as business ideas, there was nothing quite like them. But visionary entrepreneurs still came up with business plans for target markets that didn’t even exist. In many cases, it’s those plans that sold investors on products they hadn’t seen before.
Now, it’s the same for entrepreneurs introducing autonomous vehicles, virtual reality headsets, and artificial intelligence, to name a few. Maybe the business idea you’re dreaming of is nothing like what’s already out there. Perhaps you want to expand your small business into a new market. Whatever new concept you’re introducing, it may be hard for investors to visualize, so you must build a plan that helps “sell” your cutting-edge ideas.
Here are four approaches for your business plan that will make it more compelling as you form a strategy for a new market.
How to write a business plan for a new market
1. Relate your novel ideal to existing products or services
To help audiences or potential investors imagine the seemingly unimaginable, include visuals in your business plan. These can illustrate the product or service, how you developed it, or your market research. In the digital version of your business plan, enhance the visual display with embedded videos of the product or service and how it works.
Sometimes the business model may still be under development. In this case, illustrations or computer renderings can help you explain your idea in a visual way.
You’ll still need to provide a written explanation of your new idea, though. Avoid using too many technical terms that could confuse your audience. Keep the product or service description reasonably simple and brief.
2. Relate your novel ideal to existing products or services
As part of your product or service description, use examples from companies that have similar features or that provide a launching point for explaining what your product does. In the past, connected device makers may have used computers, sensors, and networks — three things everyone recognized — to explain the customer experience, value proposition, and even marketing strategy. Or if founders offered a service like on-demand delivery or drone delivery, they might’ve used existing service delivery methods as a reference point.
Once you make a connection with the roadmap of other products, you can explain your business goals and competitive advantage more effectively. This also gives you an opportunity to highlight how you came up with your idea in the business plan.
3. Identify your target audience and what it needs
Most business plans feature a market analysis, including potential customers, distribution channels, and a general growth strategy. You may want to give even greater detail in these areas if you’re preparing to enter a new market.
Defining new customers can help venture capitalists understand more about the product so they can make informed decisions about investing. You want them to clearly see who would use the product or service and why. This further validates why it’s necessary to enter a new market.
Creating use cases is one way to present these pain points and how your business will address them. A use case takes a real-world situation and a specific buyer persona and tells a story. Show how and why target customers’ needs haven’t been met, and how your product or service will meet those needs.
4. Focus on why the new market will work
Business owners should still do all the typical research that goes into each section of a business plan. But this due diligence should explain why and how the new market or market expansion will work. You can address this in your SWOT analysis, for example.
Because it’s a new target market, you may need to acknowledge the “unknowns.” This could include in-depth elements of your marketing plan or how long it may take to reach profitability.
If there’s information in the plan that isn’t as clear as it would be for an existing market, don’t ignore it. Instead, be upfront and transparent about these missing pieces. At the same time, try to connect what you know about other products or services to determine your best approach for launch or business development.
Charting a new frontier
Charting new territory through a breakthrough product or service can be exciting. Great entrepreneurs throughout history have produced ideas that changed the world.
Use your business plan to share the potential and excitement. But make it easier to understand by getting visual and relating the business model to existing ones. Show how the new product will satisfy a customer base. This will help eliminate investor frustration and give them compelling reasons to fund your business idea.