Question 2: Conservatively speaking, how much market share can we take and what’s that worth to our company in terms of finance and other factors?
This is the second post of our market assessment series that explores the questions a company must ask when analyzing a new market. In the first post, we talked about the importance of knowing a market’s current and potential size.
Moving on, we’ll now look into the importance of ascertaining how much share a company can take in a new market in which it is planning to expand.
A successful business often tends to add costs indiscriminately. Business owners get blinded by the fact that their company is rapidly growing its revenues while maintaining a healthy bottom line. This lax attitude percolates down to employees who start incurring expenditure that does not provide any real benefit to the organization.
In many instances, company staff do not even provide customers with a basic level of service. They are so caught up with their daily activities and with managing increasing revenues that customer complaints and feedback get ignored.
Question 1: What is the market’s current size? And what is its potential size? Will the market expand or contract, and why?
This is the first of an 8-part series focusing on the questions a business should ask when assessing a new market.
The ability to carefully estimate the market size is crucial to successfully entering a new market. Too many business owners rush into a new market with the assumption that everyone will use their services or buy their products.
An established business that is planning to grow its volumes invariably requires cash to finance its expansion. Given the fact that there are hardly any companies that have recorded a rapid increase in sales using their own funds, it is important to develop a strategy to secure money from external sources.
Experienced entrepreneurs know that the challenges in raising funds are many. Here are some guidelines that you can follow to make the exercise simpler.