Guide
How to write the market analysis section
The market section fails when it reports the size of a country and calls it an opportunity. It works when it shows a reachable customer, a real competitor set and a price someone will pay.
A market analysis answers four questions: who the customer is, how many are reachable, who else serves them, and why they would choose you. Size is a consequence of those answers, not a substitute for them.
Segment before you size
A segment is useful only if it changes a decision — pricing, location, staffing or channel. For each segment, record:
| Field | Why it matters |
|---|---|
| Who they are | Age, household, business type, income band as relevant |
| Where they are | Catchment, delivery radius, footfall pattern |
| What they buy today | The current alternative, including doing nothing |
| What they pay | Price anchor and willingness to pay |
| How to reach them | Channel and cost of acquisition |
| How many exist | The basis for sizing |
Two or three segments are enough. More usually means the segmentation is not doing any work.
Size from the bottom up
A defensible calculation looks like this:
| Input | Value | Basis |
|---|---|---|
| Target customers in catchment | 18,000 households | Local population estimate, adjusted |
| Share likely to buy in year one | 4% | Comparable uptake, stated as assumption |
| Purchases per year | 6 | Founder estimate from customer conversations |
| Average spend | SAR 120 | Competitor price observation |
| Year-one revenue | SAR 518,400 | Product of the above |
The number matters less than the chain of reasoning. A reader can challenge a single input; they cannot challenge a headline.
Map the competition honestly
Include direct competitors, indirect competitors and substitutes. For each, note positioning, price band, apparent strengths and gaps. Use public information: websites, menus, price lists, listings, reviews.
Do not disparage competitors. Do not invent their financials. A plan that says "no competition" is either wrong or describing a market nobody wants.
Explain the reason to win
This is the weakest part of most plans. "Better quality" and "better service" are not reasons; they are aspirations. A reason sounds like:
- a location with materially better access and a rent that still works;
- a supply arrangement that lowers cost of goods by a stated amount;
- a capability the incumbents cannot easily copy;
- a customer segment whose needs are poorly served by the current offer.
Each of those can be tested by a reader.
Present sources and limits
Every external figure needs a source and a date. Every internal estimate needs a note explaining the basis. Then add a short limitations paragraph: what could not be verified, what depends on field research, and what would change the conclusion.
That paragraph increases credibility rather than reducing it. Readers trust documents that know their own edges.
A workable section outline
- Market context in brief.
- Segment table.
- Bottom-up sizing.
- Competitor table.
- Pricing map.
- Reason to win.
- Sources and limitations.
For a commissioned version, see market research. For the full document, see business plan writing.
How market sections fail
| Failure | What it looks like | What to do instead |
|---|---|---|
| National instead of local | "The Saudi market is worth X" with no catchment analysis | Build from the customers you can actually reach |
| Size without derivation | A large number with no calculation | Show customers × frequency × price |
| No substitutes | Only direct competitors listed | Include "do nothing" and informal alternatives |
| Price blindness | No prices anywhere | Build a price map from public sources |
| Borrowed growth rates | A percentage from another sector | Describe the drivers, cite only what you can source |
| No limitations | Everything presented as certain | Add a short paragraph on what could not be verified |
The minimum dataset for a local market section
You do not need paid reports. You need six things:
- A defined catchment with a boundary.
- An estimate of the population or businesses inside it.
- The share you believe you can reach, with a reason.
- Purchase frequency and average spend, from observation or conversation.
- A competitor list with prices.
- A statement of what you could not verify.
That dataset produces a defensible section. It also forces the founder to leave the desk: prices come from menus and websites, footfall comes from counting, frequency comes from talking to customers.
A note on citations
Cite the source and the date for any external figure. If a figure comes from a consultancy report you have not read, do not use it. A reader who checks one citation and finds it misquoted will discount the entire document — and lenders do check.
Working with secondary data honestly
Secondary data is useful for context and dangerous for precision. Three rules keep it honest:
- Never convert a national figure into a local market size by population share alone. Consumption is not distributed evenly, and the error is usually large.
- Always date the source. A 2019 figure in a 2026 plan invites the reader to question everything else.
- Quote the limitation with the number. "A national retail estimate, used only for context" is more credible than presenting it as the addressable market.
Where no data exists, say so and use a labelled estimate. A plan built on a transparent estimate is stronger than one built on a misapplied statistic, because the reader can see the reasoning and challenge the input rather than distrust the whole document.
A quick sanity check
Before finalising the section, compare the bottom-up revenue estimate with the cost base. If the business needs SAR 1.2 million in revenue to cover its costs, and the catchment calculation produces SAR 600,000 at full penetration, the plan has a problem that no amount of prose will solve.
That comparison — revenue requirement versus reachable demand — is the fastest test of whether a market section is describing a real opportunity.