This market size calculator allows a start-up business to estimate the size of the local market for its new venture and to ascertain whether the venture is a feasible proposition by calculating the market saturation point and break even.
In addition, it will also provide some of the information needed to generate a sales forecast for the financial projection.
The use of the calculator should be read in conjunction with our market size estimation tutorial which provides the background to the techniques and method involved.
Using the Market Size Calculator
The Excel market size calculator assumes that the local (town, city etc.) area in which your business operates is too small to be able to obtain satisfactory sales data to determine market size. However, by using regional data (State, County etc.) available from publicly available information such as government and industry reports, it is possible to estimate the market size for the local area. The information entered should relate to the industry in which the new business is intended to operate.
The calculator is available for download below and is used as follows:
- Enter the regional information Enter the sales, population, and number of businesses data for the region in which the business is located. The size of the region will depend on the publicly available information. The market size calculator works out the average sales per head of population and the population per business for the region.
- Enter the local information The estimated population and number of businesses in your industry is entered. Although sales information might not be available for your local area, the census reports or other industry reports should reveal this information. The calculator works out the market size in terms of sales value for the local area in which the business is to operate.
- Enter the target percentage By entering a target market share percentage which you hope to achieve, the market size calculator will work out the forecast sales for the business. This should always be compared with a bottom up sales forecast carried out using one of our revenue templates.
- Saturation point Based on the regional population per business and the size of the local population, the market size calculator works out the number of businesses the local area can support, the number of additional businesses it could support, and the under-utilization percentage. All of these are indicators or whether there is room in the market place from an additional business or whether the local market is already saturated
- Enter details of your business Enter the fixed operating expenses and gross margin percentage for your business. The calculator works out the sales and population needed for your business to break even. In addition, the calculator also shows the percentage of the local market place and the percentage of the average regional population per business needed to reach break even. Both of these percentages are useful indicators of the difficulty of establishing a new business in the local market place, the higher the percentage the harder it will be to reach a break even position.
Market Size Calculator Download
The marker size calculator is available for download in Excel format by following the link below.
Users use this business market size calculator at their own risk. We make no warranty or representation as to its accuracy and we are covered by the terms of our legal disclaimer, which you are deemed to have read. This is market size calculator template that you might use when conisdering how to measure market share. It is purely illustrative of a market size calculator. This is not intended to reflect general standards or targets for any particular company or sector. If you do spot a mistake in the market size calculator, please let us know and we will try to fix it.