Market Analysis, Page 2
Determine your average customer sales per year
Trade associations or industry publications are good sources of data for the information needed in this section.
|1. How many purchases will the average customer make from you during the year?|
|2. How much will the average customer spend for each purchase?|
|3. Expected Annual Customer Sales(Multiply #1 x #2)|
For example, lets say in year 1, the average customer is going to make 10 purchases during the year at a cost of $25 per purchase. The expected annual customer sales is $250 (10 x $25).
Other: If items 1, 2, and 3 above do not apply, describe your projected annual customer sales.
Determine your annual sales volume
You now know the number of customers and the average amount each customer will spend per year. Multiply these two figures together to calculate your expected annual sales volume.
|1. Your total potential customers|
|2. Expected annual customer sales for each purchase|
|3. Expected Annual Sales(Multiply #1 x #2)|
For example, let’s say in year 1, your total potential customers are 4,000 with an annual customer sales for each purchase at $250. Your expected annual sales will equal $1,000,000.
Other: If items 1, 2, and 3 above do not apply, describe your projected annual sales.
Evaluate the annual sales volume figure
Does the number you calculated in the previous step make sense? If not, go back to the first step and take a look at the estimates you have made.
Estimate your annual sales range:
1. If this is an existing business, has your business experienced an increase or decrease in sales over the past two years? If yes, explain why.
2. Is the local economy dependent on any one plant, business or industry, such as mining or a pulp mill? If yes, explain how your business may be affected if this business closes or slows down.
3. Is the business affected by peak periods? Is it seasonal?