How much of the market for your particular product or service do you own?
Car dealers, real estate companies and other businesses whose transactions are tracked by the government have it made. They know exactly where they stand. Some businesses have an industry clearing-house that collects such information and shares it with members.
For other local retailers or service businesses, this can be a rather difficult number to calculate with any degree of accuracy.
So, how to keep score?
If you've been in the market for long, you actually know more than you think. I hope these steps help you.
1. Write down every one of your competitors by name
2. Order them from biggest to smallest
3. Estimate their annual billing by your BEST GUESS (you're probably close enough to at least make this a useful exercise)
4. Write this number next to their name
5. Show the list to your sales staff, spouse or managers and ask them to add the competitors that you forgot
6. Place your business and your sales number in its proper place in the list
7. ADD up all the numbers…this is your estimate of Market Potential
8. Divide YOUR number by the TOTAL…this is your MARKET SHARE
If the Market Potential seems like a much smaller number than you thought it would be, you've probably missed a few competitors.
What's the lesson from this exercise?
Now, you have a scoreboard!
All of the businesses listed ABOVE your name are targets! Your goal is to be stealing market share. Study them and learn how you can be better than they are.
All of the businesses BELOW you are either potential acquisitions or potential threats to YOU. They see a target on your back. Don't ignore them.