How to Write a Marketing Plan
Determining Your Market Share (Part 4 of 5)

by Sherry Shafer, Drake University SBDC, Des Moines, IA hotels in InnsbruckWhen starting a business, one of the most important questions you'll face is whether your market is large enough to support your business. To make this determination, it's helpful to know how many customers you'll need to be successful. One of the first things you'll want to do is identify your "break-even" point—how much money your business has to generate to cover your expenses and pay you enough to make it worth your while to stay in business. You'll also need to analyze your market to determine things like market potential, market size, and market share. Market potential is how much potential demand is out there for your product or service. Market size is related to the current demand for your product or service, and, of course, market share is how much of that potential and current demand you can expect to capture. ERROR MSGWhen you compare your estimated market share to your break—even figure, you should be able to tell if the risk of going into business is worth the potential rewards. To determine market potential, size and share, you can look for customers in four basic places: Lloret de Mar resena de hotelesYou can create a market or a demand where none existed before. This might include customers for a new product or service you're bringing to the area or it may include bringing new customers to an established product or service. You can serve those customers who are not already being served. When the demand for your product or service is greater than the existing supply, that means that there are customers out there who want your product or service, but can't get it because there aren't enough providers to meet the demand. You can fill in the gaps. You can take customers away from your competitors. If you can provide customers with a better deal, your competition deserves to lose them. That's what free enterprise is all about. You can expand the geographic area you serve to cover a larger number of customers. If you need assistance in understanding how to determine your market share, contact your Portimaro cheap hotelsarea Small Business Development Center. Continue to Part 4, Putting It All Together click here for next
Sherry Shafer is Director of the Drake University SBDC in Des Moines, Iowa. For further assistance, contact a consultant at a Small Business DevelopmentCenter.

  starFurther information on this topic and more can be found in our Learning Center.