Determining the size of your market is much easier today than it was 10-15 years ago. If you have a personal computer and Internet access you're halfway there. You can access quite a bit of secondary research data via the Internet. (It is helpful to know the Standard Industrial Classification of your business (or your target market) when searching these databases.)You may also have to do some of your own primary research to get a better feel for your market's likes and dislikes. Don't forget to check with your product or service industry's trade associations. Many trade associations actively monitor the market, tracking industry sales, projections and trends. There are also many other sites that provide industry demographic information and market analyses. (See the related HowStuffWorks article on "How to Conduct Market Research.")
Once you've done your research, pull all of the raw material into a clear description of the current market, your target audience, your competition, and how your product is going to jump onto this big roller coaster. Make sure you're answering these questions:
- How big is the potential market?
- Is the market growing, flat, or shrinking? What changes do you see happening?
- Is the market segmented either by pricing, quality, age, income, or product usage?
- Who is your target audience?
- Who are your competitors?
In the next few sections, we'll discuss each of the questions.