How to Evaluate a Market

If you are thinking to start a new business or enter in a new market, it helps to evaluate and identify the attractiveness of the potential market.

You can do this by ranking 10 key factors. To do this, rate each of the factors on a scale of 0 to 10, where 0 is unattractive and 10 is attractive, if you have a doubt, please be conservative in the estimate.

10 Factors to Evaluate in a market 

  1. Urgency: How urgent the market want or need what I’m going to offer?
  2. Size: How many people are actively buying things like this?
  3. Pricing potential: What is the highest price a typical buyer would be willing to pay?
  4. Cost of customer acquisition: How easy is it to acquire a new customer? / (money and time)
  5. Cost of value delivery: How much would it cost (money and time) to create and deliver the value offer?
  6. Uniqueness of offer: How unique is your offer versus competing offerings in the market?
  7. Speed to market: How quickly can you create something to sell?
  8. Up-front investment: How much will you have to invest before you are ready to sell?
  9. Up-sell potential: Are there related secondary offers that you can also present to customers?
  10. Evergreen potential: Once the initial offer has been created, how much additional work will you have to put into it in order to continue selling?

When you are done, add up the score.

  • If the score is 75 or above, you have a very promising business, go ahead
  • Anything 50 and 75, has the potential to pay the bills
  • Below 50, move to another idea

Check out the How to evaluate a market – Done by Carlose Lopez

View more presentations from carloselopez

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