Firstly customers and stakeholders, it's extremely important to understand who will be buying your goods and services. In the previous section, we use the example of an internet search engines, just Google, who provided search results to internet users and provided advertising services to business. And while it's clear that the advertisers in this example were in fact the customers, it's equally important that any aspiring business understands who are the other customer like stakeholders and who or who this might be. So although the customers or the business in this example obtains its revenue from paying advertisers, no advertisers would pay if there were not enough search engine users accessing the website equally so without any revenue. The company would be unable to sustain its operations and provide free search results to internet users while they This is probably a more complex business model than most illustrates the importance of understanding exactly who your customers are, and what they look like.

This is going to help you understand exactly where to position your products and services. Now, this can be done in two ways. The first is a way in which you as an intrapreneur conceptualize a product or service, which you then need to validate as to who might buy this product or service. And secondly, by identifying a customer or a customer market, customer segments, understanding their needs, and then designing a product to satisfy these. It's so important to note that you might want to consider having more than one type of customer. So for example, you might want to consider some form of customer segmentation.

And imagine a customer persona for each of these segments. And this is going to help you more accurately design and position products and services for specific segments or specifics. Customer personas, think about the example of a small business that provides specialized cakes for events. The requirements for a cake for a children's party, for example, are going to be substantially different to those for a wedding, or wedding cake. And apart from the products being different, these customers need to be marketed to in different ways. Now that you understand who your customer might be, it's important to know how many of them there might be.

So this is where we start thinking about the market size, and the market trends that underpin that market. Understanding the size of your potential market will help you primarily understand how really opportunity is that you're considering? It's also important that you're aware of any specific trends in the market. it you know, for instance, is the market growing. This means that there might be many opportunities but also many new entrants and therefore competitors. Is the market heavily.

Is the market heavy, heavily regulated? And do you need To ensure any kind of confirmation to certain regulatory requirements, for instance, banking, or lending money or providing legal advice, is the market declining? And if it's declining, does it even make sense to enter declining market? It might do. You know, for example, if you had a business refurbishing cassette players, or a new technology that assisted mining companies in rehabilitating defunct mines, the size of the markets and the associated trends will ultimately dictate the number of customers you can hope to win. And they've also the amount of revenue market, the amount of revenue you might realize.

So how many customers and how many sales Can you realistically achieve? Are you going to be aiming for a small percentage of a large market or a large percentage of a small market, hopefully not a small percentage of a small market because there's going to be really difficult to make money and always going to be somewhere in between. Looking at similarly, Lisa competitors will help you understand exactly where where your market size is and, and way way you can pitch your products and services. A mistake that many businesses make when planning is using flawed assumptions. So for example, the market for outdoor events in the UK is worth approximately 1 billion pounds. And the business Yeah, let's take the example of your business requiring a million pounds in annual revenue as part of your your business plan.

This simply means that in order to achieve that you're going to capture point 1% of the market. Can you see the mistake? Yeah, this market is driven off the revenue requirement rather than the other way around. Your assumption on the market change needs to be valid and accurate and drive your revenue estimates. So you can't just kind of reverse engineer your revenue target and say, well, in order to capture 1 million pounds in revenue, we need to address one percent or point 1% of the market. And we just assumed we're going to get that point 1%.

That's that's the wrong assumption to make. So another thing to think about, are there any significant events that are occurring or have occurred in the market or industry, how Marty's influence your business and your customers? Think about the example of LEDs, light emitting diodes, and you'll see these are kind of new lots that are available in industry and for home use. So these were traditionally used as power indicators on electronic devices, essentially the red or green lights indicating whether your amplifier your television or your mobile phone was on or off. And that was about all they were useful for. Then, got called Sujit Nakamura invented the blue LED and this was something that was always thought of as being impossible.

Suddenly combining the Lahti method from a red green and the blue LED, really opened up and enabled a whole spectrum of colors to be emulated. Now we've got LCD televisions, laptops, telephones and tablets, previously something that was unthought of. So what's the what are the sorts of market events that could seriously disrupt will benefit your business? Your opportunity monitor lead to an event that occurs only once in a while, such as the Olympics or the Football World Cup? Do you have a project or a service designed to run these events? Is speed to market importance it would be in this case?

And have you factored this into your planning? It's really important that you know your market and you understand your market. Next, think about your competition and your competitive edge. An urban myth has it that Charles Holland duel invented or sorry, resigned is he his position at the United States Patent and Trademark Office in 1901. Citing or saying that there was no point in working this job because everything had already been invented. Clearly Tom prove him wrong.

And as we can now see new ideas are coming to the market almost every day. Some of these ideas of truly innovative and you know some others are retake on something that already exists. One of the problems that intrapreneurs face is that they sometimes fall in love with the ideas, their own ideas that is, and they often become blinkered to the viability or practicality of this idea. One of the approaches to take years to understand how competitive your market is, and if there are any other businesses with the same or similar products and services, if they are on any available for example. This generally indicates that the market is large and healthy and let them or competitors. This does bring a challenge.

But the point to be to be made here, I think is that you shouldn't be afraid of competition. If anything, having a large number of competitors validates your idea. When McDonald's or Burger King opens a new restaurant, where do they open it on the opposite side of town to the competitor or right next to I think we all know the answer. This if it doesn't mean that you should disregard or underestimate your competitors. And it's important to know who your competitors are, what products and services they offer, and what their strengths and weaknesses are. You should also include in your business plan, where you where you can find the solder where it's available, the key competitor data such as revenue, profit, number of employees, and also very importantly, who their customers or their lucky customers are.

If your product or service has no competition, you probably need to ask yourself what the reason for this is, is because you truly have a killer idea and no one has ever thought of this before. Or could it be that there's actually no market for your idea? Nobody likes to think of their babies is ugly. But in this case, it really is important to be impartial, or at least gone a bit of an initiative. View when you think about your your business idea, or the products or services that you want to be selling, you need to describe your business plan exactly how your business and your business plan you need to define exactly how your business will fit into the landscape, and how you will compete with other businesses. You need to describe here why you think a potential customer would choose your product or service over those other competitor?

How exactly would you differentiate yourself? Are you going to do it on price? That is are you going to be cheaper than the others? Or you're going to be more expensive? If you're more expensive? does it indicate that your product is a premium product?

Is it better than the rest? So how would price help you differentiate is going to be on customer service again, you know Apple is a very good example of this. You know there might be more expensive than competitors. But this service is second to none. always going to be brand appeal. And again you know Apple is a is an example here, BMW is an example of Mercedes Benz.

Is it the Is it the appeal of the brand that is going to win customers over? What is your secret sauce ultimately, remember that it might not be as obvious as customer choosing one product or service over yours. And this is discussed a little bit later and we're going to talk about you know this in more detail later on in this training series of training videos. In summary, though, one of the benefits to the customer of using your product or service, ultimately you need to answer the question, what's in it for me? Next, we need to estimate the market share and the amount of sales that we think we can get from that market. Because revenues are critical components of your business plan, ie without revenue, there is no business plan.

It's really important that you estimate this as accurately as possible. So don't fall into the check off the previous example that we spoke about, where you reverse engineer the revenue that you need to make a business plan work. Your revenue assumption needs to be based on some solid facts. And so we're going to go into a little more detail around estimating your market share, and also the subsequent amount of revenue that you can generate from this Markov chain. So there's a few ways you can do this. And Firstly, one of the ways of doing it is by understanding how many customers that you have in your total market.

So, for example, if your business sells rugs in the southeast, how many customers buy rugs in the southeast and you know, this should be available through through research, as we said, secondly, what's the volume of unit sales that the markets made up of, you know, so how many of rugs how many of these rugs are sold in a year? And finally, what's the value of the market that is, you know, the sales generated by the sale of these rugs while These sorts of figures are generally available by applying some research, it also becomes a little more subjective in trying to estimate the percentage of either these measures that your business might capture. So, you know, what your price point might be or in fact, more importantly, what percentage of the market that you may be able to get. Once you know the size of the total market, you can research businesses that are similar to yours in size or the size you aspire to be during the first year and this is where you sometimes need to be a little more conservative and and not kind of overestimate the percentage of the market that you might get you need to under estimate your customer share to the market and and then kind of work out what they share is you know as a portion of the total market, then you need to factor into this any major customers who may already have made a commitment to you or make a commitment to you to purchase your products or services.

So what sort of deals Have you concluded what customers have bought from you? What is your current revenue based on these customers? And how does this compare to your customers so your your competitors revenue and to the market as a whole. Finally, then, ongoing market evaluation is really important. Because once your business begins growing and gaining customers, it remains important to constantly evaluate the market because it's not going to stay the same. Not only does your business change, but the environment changes in which you operate as to the customers as to the competitors.

So staying on top of these changes will really help you ensure that your products and services remain relevant to your customers and to your customers needs. And they're also going to help you plan other aspects of your business, such as your purchasing and manufacturing capability. So then, in summary, what have we learned from from this video section? Well, once you've completed this section, you should be able to Easily conduct your market research and analysis. You should be able to understand who your customers are and describe these customers in your business plan. You need to understand who you are the stakeholders are.

So are their suppliers or their competitors or other influences who can potentially influence your customers. You need to be able to estimate your market size. You need to identify any market trends within your market. And you need to understand very importantly, you need to understand who your competitors are