Are you wondering what a comparative market analysis template looks like?
Competition and market analysis are some of the most important parts of launching a new startup business. Use this Comparative Market Analysis Template to streamline the process and get to the next phase of business.
The comparative market analysis covers two big items for startups:
1) It validates this is a market worth pursuing
It achieves this by showing how big the potential market and market share is and that there is a real business opportunity here.
2) It demonstrates your competitive advantage in this market
This is revealed by analyzing competitors, and comparing their strengths and weaknesses versus yours, as evaluating the risk of future competition.
These are extremely important to make or break factors for any startup business. They will determine whether there is any really sustainable and sizable hope for business here. It will help hone the business model and direct branding. It will prove pivotal in securing financing and investors, and even advisors and great talent.
Preparing For Your Comparative Market Analysis
There are also two parts to preparing to complete a strong and effective comparative market analysis template.
- Gathering external data about the market and competition
- Gathering and organizing your own internal data
You can do this as you go step by step through the comparative market analysis template and are prompted to fill in each section. Though you can also get ahead of the game by compiling all of this data in advance.
There are several ways to gather market data:
- Publicly available industry and company data on the web
- Purchasing expensive market research reports
- Commissioning fresh research (using large firms, freelancers or in-house assistants)
- Take the DIY route, which may seem cheaper but can be flawed, biased, and incomplete
Comparative Market Analysis Template
Here’s what to include in your comparative market analysis template.
Begin with a brief overview. Mention your market, mission, general market landscape, and outcome or purpose of this document.
What is the industry? How big is the total market? You may also include how this market is trending? Are there any authoritative resources showing it is growing? You may want to touch on the problem you are solving in terms of current inefficiencies in this space.
Be sure to collect links to all of the source data and research you are doing to give your analysis and findings credibility.
This is one of the most important pieces of the comparative market analysis template. Out of the whole market, who will you target? How big is this portion of the market? It may be geographical, based on demographics, or other factors. How much of it can you really service?
Use this section to expand or hone in on your target customer characteristics. What specific customers are you searching for and expect to buy from you?
Who are the main players in this space? Who are your competitors? If you don’t think there are any, you probably haven’t done enough research.
You may list direct competitors, indirect competitors, and future competitors who are likely to move in to compete once they see your success.
You may specifically breakout several of the closest or most notable examples of competitors and list some of the things they are doing well or poorly. You may also use this section to help build out your marketing and branding plan and to design your business website, product, sales process, and so on.
Consider including any moats around your business which could help defend your position and investment against future competitors.
In terms of investment, remember that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
This part of the comparative market analysis template may include:
- Intellectual property – proprietary software, patents, and trademarks
- Legal – do you have a strong legal team of cofounder who is a legal professional
- Costs – are there significant capital intensive barriers to entry
- Distribution – are there any exclusive channels or partnerships you have
- Regulation – are there limited or hard to get licenses or regulatory approvals which will keep competitors out
In this section, you will put your SWOT analysis. What are your:
All specifically in relation to your business versus the rest. You may want to create a visual graph of these findings to use in your pitch deck.
From these findings, what are your projections and forecasts that you want to take part in your comparative market analysis template?
- How much should your business be valued at?
- How much should your startup be able to raise at your next funding round?
- How much will customers pay for your product or service?
- How many sales can you reasonably expect?
You can also project potential market share and gross profit margins. Just make sure these numbers are well benchmarked. This will all reflect in your own traction and accomplishments later towards attracting talent, investors, or customers. In this regard, you may find interesting the video below where I cover in detail how to get traction for your business.
In addition to research conducted on the web and from third parties, what tests have you already conducted or proof have you compiled?
Assumptions and interpretations of data can be dangerous. It can still be imperfect information. You may have to still get comfortable with making fast decisions on this information. Yet, there is perhaps a no better substitute for actually knowing than talking to customers and conducting real tests. If you’re not ready to take real sales, survey potential customers, compile their feedback.
A comparative market analysis template is perhaps the most important document and the process you’ll go through. Everything else hinges on this, from making the right hires to getting funded, getting the design and go-to-market strategy right, and your business model.
Work through it. Do your research thoroughly. Leverage unbiased external opinions from experts who can help you see what you may be overlooking.
Use this comparative market analysis template to set your business on track to success.