Center for Technology and Investment

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Technology Investment Business Plan

Market Analysis Summary

The target market lives and owns a business located in rural America, and may have been in business for one or more years. The clients are chosen according to their lack of knowledge in regards to technology, and their inability to reach higher levels of productivity through technological innovation of both processes and methods. These potential customers may operate companies that sell used tires or high-end garden supplies. The product is not what matters as we isolate this market, it is the processes that we are interested in fixing.

Each of our clients will reside within a SBA qualified empowerment zone. This will hold us to the parameters stipulated by the grant authorization office, and ensure that we are serving those most in need of business training and advice. It will also give us the opportunity to build ties in communities in which commerce growth could be substantial.

4.1 Market Segmentation

Our first market segment is made up of empowerment zone recipients. These clients are established in rural areas, and qualify for special SBA loans, and other government benefits. We are able to determine the geography of the empowerment zones from SBA provided data. Other resources include online data warehouses, the yellow pages, and word of mouth references.

Our two non-primary potential clients are other small businesses. These may be ongoing businesses, or start-up businesses. The growth of startups is obviously higher than that of ongoing concerns, this is due to the availability of so many "dreamers," but due to the cruelty of the market, many of these never become "implementers." Still, they are both important markets to CTI, and will be treated as such.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Empowerment Zone Recipients 12% 750 840 941 1,054 1,180 12.00%
Other Small Business Owners (Ongoing) 3% 1,200 1,236 1,273 1,311 1,350 2.99%
Other Small Business Owners (Startup) 15% 3,500 4,025 4,629 5,323 6,121 15.00%
Total 12.25% 5,450 6,101 6,843 7,688 8,651 12.25%

4.2 Target Market Segment Strategy

CTI's target markets are important to our overall strategy because there are three needs that aren't being met in rural markets:

  • Technology needs: The need to develop more efficient methods for procuring products/services, training staff, automating sales, and other needs necessary to keep a business functioning well.
  • Financing needs: Without financing during good times as well as bad, many small businesses would simply go out of business for want of cash, or because they could not finance and build the product.
  • Connections: Many rural small businesses don't have the capital, financial, and marketing connections that their urban counterparts enjoy. This leaves them at a distinct disadvantage in a brutally free market such as that found in the U.S.

CTI intends to meet these needs by pooling various contacts and financial resources, including grants, to help these businesses survive and thrive. The strategy is to focus on these three needs, discover which one(s) is(are) holding each company back, and follow through with actionable results and recommendations.

4.3 Service Providers Analysis

CTI's service industry is cluttered and difficult to frame. Small Business Development Centers (SBDC) play a similar, more limited role in providing resources for a small business owner, and explaining tax laws, hosting classes and workshops, etc. Native American SBDCs aside, many of these offices are not designed around the needs of the rural business person, although they can be useful to them.

Also in this service industry are online and offline private enterprises, for-profit small business consultancies. These can range from a one person show, to a multinational conglomerate with urban offices and semi-rural branches. These for-profit companies are often classic consultancies in the sense that they assume a low level of commitment towards the client's business, and often relies on image to prevent the owner from asking why they have not received more for their money.

4.3.1 Alternatives and Usage Patterns

Competition in CTI's niche is very limited. As stated earlier, the SBDCs, most notably rural SBDCs, are the greatest competitors to CTI. The urban based for-profits, and community development centers that dot the landscape are not as focused on technology or systems as a component of change. They are often limited operations involving one or two experts with very limited exposure to reasonably-priced technology that will provide the highest ROI to their clients.

Price is definitely a problem for most rural businesses, and for building a client base in rural America. This is easily adapted to through the combination of funding sources sought by CTI, and the company's funding and tax advantage as a nonprofit. Prices are subsequently kept low, as clients are rolled into the program on the basis of quantity. As each business retains its own consultant via a low monthly fee, only some businesses end up using the resources, even though it is made available to all paying clients.

Reputation is important, and CTI has built a powerful enough reputation to be generating 35% of its current income and clients through word-of-mouth (WOM) advertising.