Estimating Product Potential
Imagine that you've just spent three years building a fantastic business – your product is great, your website is cutting edge, your people are well-trained and enthusiastic, and your customers love what you do.
The problem is that you're running at a loss – there simply aren't enough customers in the market to support the business.
This is a heartbreaking, and very common, position to be in. It's why many professional entrepreneurs and investors conduct "market sizing" exercises before they invest in a new business, as part of the business planning that they do.
In this article, we'll look at how you can analyze your market size, and how you can use this data to make informed strategic decisions.
What Is Market Sizing?
The "market size" is made up of the total number of potential buyers of a product or service within a given market, and the total revenue that these sales may generate.
It's important to calculate and understand market size for several reasons.
First, entrepreneurs and organizations can ...