What is market analysis?
Market analysis is the process of exploring and understanding the market in which your business operates in order to address the risks faced and exploit the opportunities available.
Why is it important for transaction purposes to undertake market analysis and capture this in a document?
Whilst most business owners will have a good working understanding of their market, many do not capture this in a formal document. A prospective buyer will want to understand the market of the business they may be acquiring and – crucially – they will want to be reassured that the management team who will be running the business after a transaction also have this understanding. Being able to offer a documented analysis of the market to prospective buyers is an important step in providing this reassurance.
It is worth also bearing in mind that current stakeholders will also benefit from a document containing a market analysis and an appraisal of risks and opportunities.