Market sizing is the estimation of the potential of a market. Incorporating market research, market sizing is useful for businesses looking to introduce a new product or service to evaluate the business opportunity. Market sizing also helps investors to understand the value of the potential opportunity within the target company’s business plan.
After effectively doing market sizing, a firm may evaluate the amount of investment necessary as well as prospective growth plans. Additionally, it may determine a market’s worth and profitability.
This method of market research is time-consuming, but it provides more accurate and realistic market potential.