The market analysis shows that enough people near your location want what you sell, at a price that works. For a micro business, it is built from your own research: counting foot traffic, listing nearby households and workplaces, checking what competitors charge, and asking people what they buy now. It ends with a short conclusion about demand that the rest of the plan relies on.
What a micro business market analysis looks like
Big companies buy industry reports. A sari-sari store, water refilling station or laundry shop does not need one. Your market is usually a few blocks, one barangay, or one school or market. What a reader wants to see is that you went out and looked.
A good market analysis answers four questions: How many possible customers are within reach? What do they buy now, and from whom? How much do they spend on it? Is anything changing, such as a new subdivision, a school opening, or a road project, that will grow or shrink demand?
Keep it separate from the target market section, which narrows down to the specific customers you will serve, and from the competitive analysis, which looks closely at rival businesses.
How to gather the information
Write down how you got each number. "We counted 140 people passing between 7am and 8am on Monday, Wednesday and Saturday" is evidence. "Many people pass by" is not.
- Walk the areaMark a map of the streets within walking distance. Note houses, apartments, schools, offices, terminals, churches and the palengke.
- Count foot trafficStand at your intended spot for one hour at morning, noon and evening on at least three different days, including a weekend. Count people who could stop.
- Visit the barangay hallAsk what data they share about households and population in the barangay, and whether any new developments are planned. Record what they say and who said it.
- Check pricesVisit every store selling the same thing nearby. Write down prices for your main items and what is out of stock.
- Talk to peopleAsk 20 to 30 neighbours where they buy now, how often, and what they wish was different. Keep questions short.
- Ask suppliersDistributors and wholesalers know which products move in your area. Ask what sells well and what does not.
Worked example: a water refilling station
Example: a water refilling station in a Laguna barangay. This illustration uses blanks for the figures. Fill in your own counts.
"Barangay [name] has [number] households according to the barangay hall, plus a new subdivision of [number] units turning over in [month]. In our survey of [number] households, [number] buy refilled water and the rest buy bottled water or boil tap water. Households that buy refilled water reported buying [number] gallons a week on average. The nearest station is [distance] away and does not deliver after 6pm, which [number] households said was a problem. Based on this, we estimate weekly demand within our delivery area at about [households × gallons] gallons, before competition."
The example shows each step: a household count with its source, a survey with a stated sample size, a usage figure people reported, a gap in the current service, and a demand estimate that shows its arithmetic. Every number is something the owner gathered, not a market size copied from somewhere else.
Common mistakes
- Quoting national market sizes that have nothing to do with your few blocks.
- Copying statistics from a blog with no source. If you cite a figure, say where it comes from and when.
- Surveying only friends and family, who tend to say yes.
- Counting foot traffic once, at the busiest hour.
- Ignoring seasons. School breaks, rainy months and fiesta weeks change demand.
- Mixing up market size with your sales. You will only get part of the demand you find.
How the market analysis feeds the rest of the plan
Your customer counts become the starting point for the sales estimate in the financial plan. Price checks set your pricing in the marketing plan. Gaps you found, like no delivery after 6pm, become the difference you claim in the executive summary. If a later section uses a number, it should trace back here.
Market analysis checklist
- Map every home, school, office and terminal within reach
- Count foot traffic at three times on three days
- Ask the barangay hall what household data it can share
- Record competitor prices for your main items
- Survey 20 to 30 people who are not friends or family
- Note anything that will change demand in the next year
- Write how you got each number
Questions people ask
- Do I need statistics from the government in my market analysis?
- Not always. For a micro business, your own counts and survey are often more useful than national figures. If you use any official data, name the agency and the date.
- How many people should I survey?
- There is no fixed rule. Twenty to thirty people who are not friends or family gives you a rough picture for a small neighbourhood business. Write down how many you asked and how you chose them.
- What is the difference between market analysis and target market?
- Market analysis looks at total demand in your area. Target market narrows that to the specific group you will focus on and describes them in detail.
- Can I use online data?
- Yes, if you note the source and date. Search interest and social media groups can show what people in your area talk about, but they do not replace counting customers in person.