Business people talking to business people always come around to the question “How’s business?” We can measure one year to the next, but it got me wondering what percentage of business that is out there is coming our way.
I did some research for a simple way to calculate market share. In my research, I found this little formula. I’m really not sure if it would apply to your business or not, but it is an interesting concept. Try it.
Calculate Your Market Share by Dr. Kevin Nunley
Here is a simple method that comes in handy on those days when you feel like nobody wants to buy what you sell. It is even more fun to use when things are going well and you feel like you are about to take the country by storm.
Figure your market share. That is the percentage of all sales of products and services like yours that are purchased from your company.
All you need is a slip of paper or the back of an envelope. First estimate the number of customers who buy from businesses like yours.
Next figure how many times each of these customers buys in a year (nine ads, 40 candy bars, 3 hours of plumbing).
Now multiply the two numbers together to get the total size of the market. Next divide your sales into the total market size to get your market share.
If you are a small biz working in a very large industry, your market share can be several zeroes behind the decimal point.
Instead, you might figure your market share in your town or in a very targeted group of customers.