A Poor Mom’s Guide For Writing A Startup Business Plan Part 7

Determining your market potential can speed up the process of uncovering your sales growth. Of course, the best way to determine which customers are the most valuable to target is simply getting some statistics and knowing the current customer or market potential of your chosen business. An average company may be able to increase profitability by 10% or more through programs that improve the sales organization structure.  Most have been successful in powerfully optimizing the company’s sales force for a well-balanced territory coverage through engineering. Re-engineering a well-thought organizational structure makes it possible to match people and their relative skills with the market environment.


Reconfiguring may mean building on the strengths while addressing the weaknesses. Serve your customers efficiently, reduce costs, and adapt to the changing market conditions. For startups, a simple structure that is more manageable is highly recommended.



Key factors can be the amount of control management you can exercise over your staff and make sure the organizational characteristics best fulfill the needs of the customers. Knowing that 80% or more of the company’s sales revenue comes from at least 20% of the customers, relatively, an improved targeting and resource optimization should be thought of more carefully!


It may not be easy to get hold of the needed data to measure the market potential. Developing them requires hard work, dedication, insights and creativity. If you can’t measure it, you can’t manage it. Indeed, measuring your market potential is critical to business growth and success.



A large part of businesses do not pay attention to research and data, which is one factor they were not able to relate and match the much needed analytics to their core activities. Underperforming is the biggest risk you may have when you do not know the size of your potential market. Your analytics and market research should help you understand your potential customers.


It is natural that you seek solutions for improving the industry’s way of addressing the market’s needs. No organization design or method is perfect, and any form can suffer from a variety of interacting problems, that may result from the design itself. You may want to look at all functions and see how work activities needed to be organized and carried out, which may include reporting relationships.


Maybe we should put it this way. Do not invest in anything you do not understand fairly well, because it has a lot to do with your amount of investment, organizational structure, marketing strategy, and size of the sales force. If you lack clarity in your total addressable market, even if you have the best talented sales force, but if you are not putting them in the right performance conditions, it would be literally difficult to achieve your desired results.



Market sizing. Understanding the potential of the market is important when you are looking to introduce a new product. It is crucial you understand the total size of the market because it will give you a good idea of the potential revenue you are going to generate with your target market.


Make it the total accessible market size where you can realistically sell your product. Estimating the size of your potential accessible target market is necessary for budgeting, forecasting potential customers, and estimating profits.


It is also needed to determine the strategy you need for market penetration. You may need to get an idea about the size of your overall market and if the market has the potential to grow.


Addressable, accessible, available market – what is it? The available market is your accessible, addressable market that you can realistically compete, quantify, and segment. Rank the potential customers so you can identify those individuals that best fit into your unique value proposition.


With the advent of big data and advanced analytics, you would be able to look deeply and develop data driven understanding of the particularities of your target market. Micromarket analysis with powerful data visualization techniques of geomarketing can ultimately help raise your sales. Also, make sure you are able to identify the decision makers in your priority market segment, especially if you are selling technology related products or services.


Why is this critical? Because without knowing your market size, you might be conducting business and investing more in a market that is so small, you may not be able to make any money. Market sizing gives you a sense of market trends, market movements, and the necessary drivers of demand.


Finding the size of the market can help work out your total market potential, which means determining your potential share of the market and the number of customers you can potentially serve. The real and potential sizes of the market are vital to help you plan the size of your business.


Market sizing determines what products are being purchased at what volume and the actual size of sales being realized by the competitors. This can help in identifying your strength if you are going to continue with your plan in entering the market. Here are two ways you can measure the market size


  • Market size by value – total amount spent by customers on all products and services involved


  • Market size by volume – the quantity of the products or services purchased



Market growth

Estimating the market growth would mean estimating the increase of your market size. It can be measured by volume or value. Be particularly curious about trends in the market size to see whether it is growing or not. You should be able to come up with a good offer as a motivation in buying your product.


The economic forces normally influence the overall size of the market, including determining its growth. Here is a small checklist to help you get started

  • What size market can you handle with available resources?


  • Is there a market segment in which you can concentrate with a distinct advantage?


  • In which segments do your competitors operate and what is the level of their penetration?


  • How is the market characterized?


  • How effective can you be in positioning your brand?


  • Where does your product fit in the product life cycle?


  • Is there room in the market for your product?


  • What are the rate and frequency of product usage?


  • How effective is the supply chain in reaching customer segments?


  • Are any competitors attempting to control the supply chain?


  • What is the level of technology used in manufacturing your product?



If you have a general product you intend to sell to the mass market, then you can use the census information. If you intend to serve a particular group or geographic location, then know at least how far your target market should travel to use your business.


You can easily find estimates of the size of markets in published press releases, news media articles, or summaries of statistics from market analysts’ reports. You have to find the right source of your data you can use to come up with a market size estimate that more accurately reflects the total value of sales to your potential customers.


When you try to estimate the market growth, you will realize you will be facing the same impediments as when you try to estimate the market size. However, estimating the market growth can be more complicated, because of the changes in the trends and the increase entries of alternative products. This is one reason the prime piece of information when assessing market potential is an estimation of the market size.


Sizing the market is very important and considered as a necessary task for business and marketing planning, specifically budgeting. Startups may find themselves having to evaluate more of the nature and size of their market, especially when selecting a bank or getting a third party financing from Venture Capital and Angel Investors.



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