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Estimating the
share of different market segments you can capture will help provide
a focused projected revenue figure that should be used when seeking
financing or valuing a potential product/service launch.
Many businesses
overestimate the share of the market they can capture, which leads
to skewed revenue figures. It is important to be realistic when
determining a market share estimate. You should look at as many
different sources of data as possible. It is a good idea to use
high/low projections, (or even high/medium/low projections) for
your market share. You should show these as a percentage of the
total market as well as a dollar sales figure for projected sales.
| Example:
If you are studying a $5 Million regional magazine markets and
you realistically expect to capture a high of 3% market share
and a low of 1% market share in your first year in business,
you would see revenues of between $150,000 and $50,000. Apply
these projections over the five- year time period for which
you have made market size estimation -- taking into account
the rates of growth of other companies in your industry and
who you will have to take the market share from -- to generate
a five year sales forecast! |
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