What is The Market Size For Your Startup?
Knowing your product’s market size is extremely important for any startup. One of the most common question asked by investors is, “What is your Market Size?”. Market size should never be the only thing that you consider about a product, but it is a major factor in determining your target audience.
What is Market Size?
Market size is the number of buyers and sellers in a particular market or niche. Market size should not be confused with competitive edge or market shares. Here’s an example. Let’s say you had a local business selling cat toys. You go through some data and found out that around 10,000 people in your town owns cats. Because, your business is in a local area, your market size for your cat toys would be 10,000. The range of the market size can be narrowed down some more or you could also expand the range some more as well. Your toys might be aimed towards cat owners, but maybe your toys have additional functions that attracts more than just cat owners. With that example you would broaden your range. If your cat toys are targeted towards younger cat owners, then you would narrow that range.
When your startup is seeking early investment, you should have all the necessary statistic and data for not just the current market size, but comparison of previous year growths and future predictions. With good data and analytics, investors will believe more in your product.
Finding Market Size For Your Startup
Finding the market size for your startup can be difficult. Usually a lot of data is available on http://www.sba.gov . The traditional way of finding a wide range of market data is to use a market research firms. Market research firms employ many people all around the world to gather data from questioning to surveying. Industry reports are also used often by firms. Most of these data are quite accurate. The problem with market research firms is the price behind it. Most market research firms cost thousands of dollars if not more per project.
The best way for startups on a tight budget to find their market size is by using tools such as Google’s Keyword planner to see how many searches their niche receives monthly. You can compare your competitors website with your own website using Alexa or other analytical rating tools. A lot of self research, news release, press reports, Google trends and many more are good options for self market size research.