The Market Analysis Table

Chapter 12: Your Target Market Forecast - Page 12.2

The Market Analysis Table

As part of the business plan, you should generate enough information to develop a basic Market Analysis table. The illustration below gives you an example of a list of market segments, implemented as a spreadsheet table. Each segment is a group of customers that are classified according to the market segments you define.

Market Analysis Table

This table shows a simple classification of market segments, each segment defined by its total potential customer count and its estimated growth rate.

To calculate compound average growth rate (CAGR), the standard formula is:

(last number/first number)^(1/periods)-1

You can see that formula at work in the illustration, in the formula shown in the edit bar of the spreadsheet, calculating the CAGR from the two numbers. Average growth in the Consumer segment during that period was 2%.

In the illustration you can see how the spreadsheet works. It is pointing to cell H5, and the formula in the edit bar is the formula in that cell. It identifies the last year in row-column notation as G5, and the first year as C5. The growth rate calculation produces the number showing in H5, 2%.

As you can probably guess, the formulas in the rest of this row take the growth rate assumption in column B and apply it to the other cells, after the initial value in column C. You add 1 to the growth rate and multiply it by the previous year to get the next year's calculated amount.

You can create a simple market analysis by estimating the number of potential customers for each segment and the growth rate, as shown in this example. Once you have those numbers, it should be a simple step to develop a corresponding chart, such as the pie chart shown on the previous page, 12.1.

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