When you’re developing marketing strategies, one of the primary things you’ll have to figure out is what your market size is. You can use this information to create effective strategies that will pay off for you in a big way. Of course, determining the size of your market might not be easy for you. If you’re not sure how to figure out the answer to this question, these are a few things that you can try.
What Is Market Size?
Before you can determine what the size of your market is, you’re going to have to learn what a market size is in the first place. In a nutshell, market size describes the number of people that would be interested in the product or service that you’re offering. For example, if you wanted to start a dog walking business, your market size would describe the number of people in your area that have dogs that need to be walked.
If the market size for a particular business is too small, then that business might not be financially viable. Before you can launch any business, you’ll have to look at the size of the market to determine whether or not the idea makes any sort of financial sense.
Why Is Market Size Important?
As mentioned above, a business may not be profitable if there isn’t a market for what the business is offering. If you find that your market size is extremely small, you might want to change your business so that it better suits the needs of the market.
Beyond that, market size can be important because it can help you to find the best advertising solutions for you. If you’re targeting a niche market, then targeted advertising strategies are going to be your best bet. If there’s a massive market for what you’re offering, then you can try out strategies that are a little bit broader. This is essential information, and you’re going to want to take the time to gather that information before you launch a business.
How Can You Figure It Out ?
Determining your market size usually isn’t easy. It can take a lot of research to learn more about your market. If you’re doing this research on your own, then you might have to explore lots of strategies before you are satisfied with the information that you have.
With that said, there are definitely a lot of options available to anyone that is trying to figure out the size of their market. Below, you’ll find out some of the most effective ways to gather the information that you need.
Look At Your Competition
You can learn a lot about your market if you take a closer look at some of your top competitors. For example, if you want to open a bookstore, you’ll want to look at other bookstores in the area. Try analyzing these businesses to see how successful they are. You might want to see how many likes a business has on their Facebook page, or see how busy the business is on a typical Saturday.
Your competitors are sharing your market with you. If you look closely at them, you’ll be able to gauge the size of your market to see if there is enough demand to support a business like yours.
Determine Where Your Market Is Located
Your potential customers are going to be limited based on your location. You’re going to have to look at your location when you’re doing any analysis. If you’re going to be opening up a brick and mortar store, then your maximum target market is going to be the people that live and work in your area. If you’re opening an online store, then your market is going to be a lot wider.
It can be hard to run a successful business in a small town. If your maximum market size isn’t very large, then it’s likely that the sector of the market that your business appeals to is even smaller. If you’re trying to see how big or small your market is, then you’re going to have to take a good look at your location.
Figure Out What Subset Of The Market You’re Occupying
A lot of businesses can be grouped into fairly broad categories. As an example, all hotels are a part of the hospitality industry. All stores are a part of the retail industry. When you’re analyzing the potential audience for a product or service, you won’t want to focus on these large groups. Instead, you’ll want to look at the section of the market that you’re a part of.
If you’re opening up a restaurant, you’re going to want to figure out what part of the restaurant business your restaurant is going to fall under. Are you opening up a fast food restaurant? Are you interested in opening a fine dining establishment? While businesses that are a part of the same categories do have some things in common, the nature of your business can definitely change your market size.
Consider Your Target Audience
While businesses are generally happy to have customers of small sorts, most businesses target a specific group. For example, the target audience for a toy store would be children and the parents of children.
You’re not going to be able to figure out what your market size is if you don’t look at your target audience. You should think about the groups that are most like to purchase the things that you are selling. You shouldn’t do too much to limit your audience, but you should also remember that having a target audience can help you when you’re trying to market something.
Learn More About The People In Your Area
If you know that you live in a city with 100,000 people, you’re going to want to learn more about those people. You’ll want to find out as much as you can about the demographics in this area. If you’re targeting a specific demographic, such as women between the ages of 18 and 45, you’ll want to learn how many local women are a part of that category.
You can’t assume that being in a populous area means that your market size is large. You’ll want to focus on your actual target audience. Start looking at the demographics of the locals and see how many of those people could wind up being your customers in the future. Remember, the population of your area is likely to change over time, and your market is going to change along with it. You’ll want to look at your market now, but you’ll also want to think about the future.
Determine How Large Your Market Needs To Be
How many customers does your business need to be profitable? When you draw up a business plan, you’ll want to look at how much revenue your business will have to draw in to be financially successful. You’ll want to make sure you consider all of your potential expenses, from utility bills to the wages that you’ll be paying for your employees.
When you know how much you’ll be spending each month, you’ll be able to see how much you would have to earn in order to become profitable. From there, you can look at what how large your market size would have to be to accommodate that.
It’s important to remember that the size of your market isn’t a reflection of all of the customers you’ll have; it’s simply a window into potential customers in your area. If you have a market size of about 10,000, that doesn’t mean that you’ll have 10,000 regular customers. It’s likely that you’ll actually have far fewer customers than that.
If you need to have many regular customers in order to be successful, you’re going to need to have a large market size. If you don’t need a lot of business, your market can be a lot smaller. If you figure out what your business requires, you’ll be able to do a lot more with the information that you gather.
See How You Could Change Your Market Size
It can be hard to change your business plan once your business has been launched. However, it’s easy to alter a business when it’s still in the planning stages. If you’re gathering information about the size of your market, you should also look at steps you could take that could decrease your expand your market size. For example, you might see how being in a different location could impact the size of your overall market.
The market sizes for businesses aren’t static. The market for a business might be huge in one area and tiny in another area. In many cases, offering an additional product or service can dramatically increase the size of a market. You should experiment and see what you might be able to increase the number of potential customers that your business has.
Look At Your Market From The Top Down
When you’re trying to figure out how large your market is, you’re going to want to take a look at some of the most successful businesses in your industry. For example, if you want to open an e-commerce store, you might want to look at Amazon. Obviously, the success of Amazon demonstrates that there are a lot of people that want to order things online.
From there, you’ll want to start looking downwards. If you’re doing to be selling dog products online, you’ll want to look at the biggest stores that you’ll be competing with. From there, you’ll want to look at smaller shops that are similar to you.
If you start at the top and work your way down to the bottom, you’ll gain a great deal of insight into your likely market. You’ll also be able to see how your business might be able to grow in the future. This sort of analysis can take time, but it can definitely help you to learn a lot.
Think About Having A Professional Analysis Done
While you can do a lot to research your market, there is only so much that you’ll be able to find on your own. If you want a more accurate picture of your market size, you might want to hire a company that can find this information for you. There are actually companies that specialize in analyzing markets and digging up information on your target audience.
If you’re only starting a small business, then this sort of analysis might not be a worthwhile investment. However, if you have significant plans for your business, and you are planning on investing a lot of money to bring those plans to fruition, then having additional information is probably worth the cost. Explore your options and decide if you’d like to work with a company like this.
Consider How You Can Grow Your Market
If your market size is small, you don’t necessarily have to give up on your business idea. Instead, you should start looking at some things you can do to expand the size of your market. As an example, if you’re opening a brick and mortar store, you could consider opening an online store that sells some of the same products.
The size of your market doesn’t have to be static; there are actually a lot of different things you can do to increase your overall market size. If you feel like your current market isn’t large enough, there are plenty of different strategies that you can try out.
Learn From Your Competition
If your competitors have a bigger market share than you do, you shouldn’t beat yourself up about it. Instead, you should take the time to investigate them and find out why they’re so successful. You can actually discover quite a bit if you spend some time looking at your major competitors.
How is your competitor advertising? Do they offer any products or services that you don’t have? Is the business well established, or is it new? Try to find out everything you can about your top competitors. See if there are some lessons that you’d like to learn from them.
Offer Something That Your Competitors Don’t Have
If you want to win over the market share that your competitors have, you’re going to have to look at what your competitors are doing wrong. For example, if your top competitors aren’t open in the mornings or evenings, you might want to keep your business open during those hours. That way, you’ll be able to win over customers that want to shop during those times.
You can’t just copy the things your competitors are doing and hope that these strategies will work out for you. If you want to be successful, you’re going to have to look at your competitor’s strengths and their weaknesses. Adjust your strategies accordingly, and you’ll be able to increase your overall market share.
Make Customer Service A Priority
A lot of people underestimate just how much service matters to customers. If you demonstrate that you’re willing to go the extra mile to keep customers happy, then you’ll be able to draw in a lot of business. In fact, you’ll probably be able to attract customers based on word of mouth alone.
You don’t have to do anything elaborate to satisfy your customers. Being polite and friendly in your interactions with potential clients is more than enough. If a prospective customer asks a question, you should make sure you answer the question right away, and if someone has an issue with your business, you should work to resolve it. Poor customer service can shrink your market, but excellent customer service can help your market grow.
Keep An Eye Out For Trends
A lot of businesses find significant success because they spot a trend before anyone else has the chance to discover it. If you try to pay attention to potential trends, you could wind up launching a product or a service that will expand your market size by quite a bit.
How can you keep track of the latest trends? One of the easiest ways to do this is to keep a watchful eye on your market. See what your customers are talking about. Pay attention to the things that get them excited. If you focus on your customers, you might be able to notice some trends that no one else has managed to spot.
Introduce New Products And Services
No business has ever found success by staying exactly the same. Every business has to adapt and change with time, even if those changes are fairly minor. One of the best ways to innovate your business is to occasionally introduce a new product or service.
You don’t have to dramatically change your business in order to offer something new. If you sell products, you should try to add new products to your inventory from time to time. If you offer a service, you can try offering additional services or changing the way that you package your services.
If you don’t offer your customers anything new, your market is eventually going to shrink. If you’re introducing new products on a regular basis, you’ll be able to keep the market that you have and attract new customers at the same time. You should always be looking for opportunities to provide something new to your customers.
Never Stop Marketing
A lot of people put time and money into marketing when they launch a business, but stop those efforts later on. If you don’t continue to market your business, you’re never going to be able to draw in any new clients. You’ll always be limited to the customers that already know about your business.
You don’t have to have a big marketing budget, but you should remember that marketing is something that you have to keep focusing on. Whether it’s running ads on Google and Facebook or maintaining an active presence on social media, you should work to be sure that plenty of people are aware of your business.
Listen To Your Customers
If your customers are telling you what they want from your business, then you should listen to them. After all, your customers are your market. You’ll be able to grow that market if you can show your customers that you’re paying attention to what they want and need.
You may want to make it easier for customers to tell you about what they want for your business. If you don’t spend a lot of time on social media, you should change that; it’s an effective way to connect with your customers. You don’t have to fulfill every request that your customers make, but you should absolutely consider the idea that they send your way.
Gather Data And Analyze It
It can be hard to strengthen your business if you don’t have a lot of information to work with. You should try to gather plenty of information about the current state of your business. Look at your profits. Pay attention to how many customers your business has each week and each month.
Once you have that data, you’re going to want to look at it carefully. Try to identify your most successful months. Did you do anything different during those periods of time? If certain months weren’t successful for you, you should try to figure out why.
In order to grow a business, you’re going to have to figure out what’s working for you and what you need to change. When you have plenty of data about your business and how it operates, you’ll be able to learn more about your successes and failures and find the best ways to proceed from there.
As long as you’re willing to implement this strategy, you should be able to learn more about your market size. From there, you can come up with the right ways to reach that market. You’ll be able to successfully advertise your products and services, and you’ll be able to grow your business quickly. Understanding your market can really do a lot for you.