How to determine market share

[gib99]

Hello,

How does one figure out the average market share for a typical small business of type X (e.g. software development) in one's local area? Is there an online database or something?

Thanks.

[vangogh]

Your market share is your revenue divided by the total revenue for the overall market. The average would be the average market shares for all businesses in the industry. I don't know if stats exist for each and every industry. My guess is little exists at a local level, but I really don't know. I'm not sure how useful the information would be for a small business. I would think the share, even at the local level, would be too small to have any significance.

[tallen]

Define your market -- ALL software development across all sectors, or a narrow niche like support for legacy systems using FORTRAN? (or something in between?)

Define your geographic area -- your neighborhood, your city, your county, your state, your region of the country, the whole country, the whole continent, or the whole world?

Having now defined your market area, you can attempt to determine the total value of that market, and then you can try to estimate the share of any given player in that market.

At large scales, with broadly defined market segments across large regions (states or the whole country), there will be data available, typically collected and collated by government agencies. At this scale, many of the major "players" are public companies that are required to disclose their revenues.

The more localized you get, and/or the more narrowly you define your market niche, the less likely you are to find any -- let alone good -- data, so you have to do detective work and/or try to build estimates from the ground up (start from things like census population data, for example).

One of my businesses has 100% market share -- we are the only game in town -- but ultimately it's all in how you define your market and your area....

[gib99]

Thanks both,

This is useful information. I'll use your responses as a guide in building my business plan.