Interior design business plan Market research

This is the third in a series of tutorials on how to draft your own interior design business plan. One of the most important components of an Interior design Business plan is the identification and analysis of the constituent market. In this part of your business plan, you should provide details of
a) The geographical location & area of the target market.
b) The demographics of the market
c) Classification of the market on vital indicators like age, income and tastes and preferences
And finally the part of this market that you intend to target along with the justifications for selecting the particular market.

A sample market research to guide you before starting your own interior design business follows –

” Psalms Interiors has conducted a market research of Texas and has collected the following information about its target market.

The company has decided to start by targeting the residential interior design segment for now. The corporate segment is proposed to be targeted from year 3 onwards. Accordingly for now, market data has been collected only for the residential segment. We estimate a huge potential in the corporate segment as well but data for the segment would be collected only at the end of 2nd year.

As per state records, {Location} has an approximate population of 2 million people spread over a radius of 40 miles from the center of {}

Further demographic classification is as follows –
Gender classification

Male 1.13 million
Females 0.87 million

Our primary target market comprises of the female population. Further demographic breakup of the female population of 0.87 millions is as follows –

Age – wise classification

<18 years 0.14 million
18-27 years 0.15 million
27-40 years 0.33 million
40-60 0.18 million
60 years and above 0.08 million

Our Target market is further narrowed down to female population in the age group of 27 to 60 years with a total population of 0.61 million

Annual Family Income based classification

< USD 24000 p.a 0.11 million
USD 24000- USD 48000 p.a 0.44 million
USD 48000-USD 60000 p.a 0.15 million
USD 60000-USD 100000 p.a 0.10 million
> USD 100000 p.a 0.07 million

Here we propose to target the segment with an annual family Income of USD48000 p.a and above.
(0.32 million population size)

Some other vital figures about our target market in the age group of 27 to 60 years (0.61 million population) are –
37% of Female in have completed college education.
23% of this population are salary based workers.
9% of this population are independent entrepreneurs.
66% out of 0.61 million are married.
55% of the target population have their own house.
47% of the women do not have children living with them.
64% of the population subscribes to at least one magazine on women issues.

Our target customers –
Any one who finds interest in decorating her/his homes forms our target customer base for the first two years.
Psalms Interiors aims at providing its customers with an opportunity to decorate their homes in ways that match their tastes and preferences.

Market Growth
As per state estimates – the number of household in the area grew at an average of 15% in the last 3 years and the rate of growth is estimated to be around 15.8% for the next year. Around 47% of the household comprises of people in the age group of 27-40 years of age. Thus the number of household is expected to grow to 0.42 million by the end of year 2008.

In contrast more than 41.2 % of houses in the area were built prior to 1970. Thus the market is also witnessing a surge in renovation of these houses.

Based on the above findings, Psalms interiors feels that there is a huge untapped potential in the Interior design business Industry in the area. In the first year of its operation, psalms interior proposes to generate 80% of revenue through consultancy and remaining 20% through product sale.”

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The next tutorial will talk about how to conduct competition analysis when drafting a business plan before starting an interior design business.