Not all markets are created equal. Some are bigger, better and more lucrative than others. Knowing how to evaluate a market is like knowing where to go fishing for a great catch.
Use these 11 characteristics to evaluate any market with ease so that you can take your business where there are the highest chances of success. A rising tide floats all boats; a great market lifts everyone up.
To evaluate your market, get a pen and piece of paper and go out and research the following 11 characteristics. Rate how well that market scores, on a scale of 1 to 10, on each of these characteristics, and then see if the total score makes you happy.
Here we go:
1. Size. The bigger the market size, the better.
2. Urgency. The more urgently people need the products in that market, the better. For example, pet rocks have no urgency, but medication does.
3. Speed to market. The faster you can go from getting the initial idea to beginning to make sales, the better.
4. High pricing potential. The higher you can charge per product, the better.
5. Low cost of acquiring new customers. The easier and cheaper it is to get new customers, the better.
6. Low cost and ease of delivering. The cheaper and easier it is to deliver your product, the better.
7. Uniqueness. The more unique your product is (or how you deliver it, or how you package it), the better.
8. Low upfront investment. The less resources you need to test the market, build the business and get started, the better.
9. Back-end and up-sell potential. The more related products you can sell to your existing clients, the better. You don’t want to go into business whereby you can only sell one product one time to each customer and then that’s it. There is now growth potential there. You need to be able to repeatedly sell the same customer.
10. Evergreen potential. The easier it is to continue selling and selling once in business, the better. For example, a product that can be sold for ever, like toilet paper or cooking oil, is better than one that is sold just once, like pet rocks.
11. Addressability. The easier it is to reach and communicate with your market, the better. For example, does your market congregate in “pools” like mailing lists or radio stations or places you can get access to?
How well does your market score on each of these points?