What are the three things that a potential entrepreneur should follow when estimating sales and market share?

Question

What will be an ideal response?

Answer 1

There are three things that a potential entrepreneur needs to do when estimating his or her sales and market share. First, one must determine the size of the industry and market segment one wants to enter. Second, one must estimate the competition and determining how to stack up against it. Finally, estimate one's own share of the market.
In studying the market area, the number of similar businesses that have gone out of business or merged with a competitor should be determined. A high number of these activities usually signals market weakness. Analysis of competitors' activities may also indicate how effectively a new company can compete.
While the biggest worry for small businesses is their large national or global competitors, the natural advantage goes to the "excellent" companies-large or small-that strive for low overhead, use no-frills assets, and look for a better real estate deal. Small, growing companies should stay out of the path of focused market leaders and deliver unprecedented value to the chosen customers in their market niche.
In order to estimate one's share of the market, one must determine the geographic boundaries of the market area and estimate how much of one's product might be purchased. Finally, one must make an educated guess as to what part of this market one might attract as one's share.