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Steps to estimate market size

Market research is an essential component of any new business venture. Market research, just as important as hiring the right people or finding the best location, allows you to learn more about your potential customers and gives your new business the best chance of success.

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Steps to estimate market size

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  1. Apelo consulting Steps To Estimate Market Size MarketResearch HealthcareResearch B2bMarketresearch

  2. What is market size? Thisisshorthandfordeterminingwhetherthe potentialmarketforyourstart-upislargeenough, anditistypicallythefirsttypeofmarketsizeto calculate. Atitsmostbasic,marketsizereferstothe numberofpotentialcustomerstowhomyou couldsellyourproductorservice.Itcouldbe thenumberofpeoplewhovisitahighstreet andbecomecustomersofanewcoffeeshop, oritcouldbethenumberofdogownersin yourareawhocoulduseadoggrooming service. TOTALADDRESSABLE MARKET Thisisthesizeofthemarketthatyournew businesscanrealisticallyreach.Itisasubsetof thetotaladdressablemarketandisalsoknown astheSegmentedAddressableMarket TARGETOR AVAILABLEMARKET Thisisausefuladditiontotheprevioustwomarket sizecalculations.Itisanadditionalstagethat assistsyouindeterminingwhatmarketshareyou wanttopursueandwhatyouexpectyourbusiness toachieve. EXPECTEDSHAREOF MARKET Apelo Consulting 2

  3. What to look out for when calculating market size Beforebeginningtocalculate,itisimportanttounderstandthatcalculatingmarket sizeentailsbeingobjectiveaboutthefacts:itdoesnotentailinterpretingmarket datatosupportyourbusinesscase.Ifthemarketsizedatarevealsissues,suchasa lackoflocalcustomers,it’saredflagthatyourbusinessmaynotbeprofitableinthat location,forexample. Marketsdonotremainstatic; theyevolveandchange,andyoumustaccountfor markettrendssuchasnewtechnologiesorconsumerpurchasinghabits.Calculating marketsizeisbasedonassumptions,butitwillhelpyouconsidermarkettrendsand theirimplicationsforyournewventure. Apelo Consulting 05

  4. How to calculate the market size Calculatingmarketsizeentailsfirstcalculatingtheaddressablemarket, thentheavailableortargetmarket,andfinallydetermininghowmuch marketshareyourcompanywillgenerate.Here’showtofigureoutthe marketsizeforeachstage TOTALADDRESSABLE MARKET Thetotaladdressablemarketis simplyallofthepotential customerswhomightbe interestedintheproductsor servicesthatyourstart-up provides. SEGMENTED ADDRESSABLEMARKET Whilecalculatingthetotaladdressable marketsizeisuseful,youshouldreally focusonthenumberofcustomersyour companycanrealisticallyreach.Customers whomightconsiderusingyourbusiness, yourmarketingcanreach. CALCULATE MARKETSHARE Unlessyourstartupiscompletelyunique, chancesareyou’llhavecompetitorsvying forthesamecustomers.Thetotalnumber ofcustomerswhobuyfromallcompetitors inthemarketisalsoausefulindicatorof thetargetmarketsizewhenadded together.

  5. LOOKING FOR A MARKET RESEARCH COMPANY? EXPERT ADVISORY PARTNERS FIRST PROBLEM SOLVERS Our Subject Matter Experts (SMEs) design a path through even the most complex industry projects We believe in partnerships that go above and beyond. Experience our 360° approach to Client Success We understand things don't always go to plan. We prepare for the unforeseen and help you effectively bridge project gaps APELO CONSULTING WILL PROVIDE YOU THE BEST MARKET RESEARCH SOLUTIONS

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