Think you’ve come up with a great business idea? Congratulations.
But how do you know its true potential? One way is to calculate the market size. Knowing this means you can decide whether your idea is worth the investment and commitment needed to bring it to life.
Not all “good on paper” ideas have the potential to offer a worthwhile return on investment.
Starting a business is hard enough – but if there simply isn’t a large enough pool of potential customers, making that business a success will be all but impossible.
So, here, we look at how to calculate market size for products and services, including the different methods and formulas you can use. We move on to set out some examples and even offer up a few potential markets to explore.
Once you have that perfect business opportunity, we’ll also let you know why Whop is the perfect platform to turn all that potential into cash in the bank.
Market size 101: a summary of the basics
What is market size? It is the estimated number of potential customers who would be likely to buy your product or use your service.
It can also be expressed as a dollar amount. This involves calculating the potential revenue from the product or service.
Market size is one of the metrics used by a company or entrepreneur to decide if the potential return on a product is worth the investment (time, money, resources) it will take to launch that product.
It’s also used by investors as a benchmark to decide whether to put money into a company.
Market size vs market share
Market size differs from market share. This is the percentage of the total market a particular company has gained. For example, Coca-Cola has a 46.5% share of the global soft drinks market.
As you plan your business, you’ll want to calculate the potential market share you could capture, alongside market size and potential revenue.
Together, these numbers give you an idea of whether it’s worth going ahead with your business idea and how much profit you could make.
We have lots of great ideas for making money. For example, you can explore business options for women or find great work at home business ideas.
Get started with market size
Before we delve into the formulas for how to calculate potential market size, let’s look at a few questions to ask which can give you a rough sense of whether your idea has legs.
Is anyone else doing it?
The first question to answer is whether anyone else is doing anything close to what you’re planning to do. At this stage, finding out about your competitors helps you to:
a) Find a way of doing it better or at a more competitive price point
b) Go forward with confidence that the product/service is in demand
c) Give you an idea of where you would fit and your feasible market share
Of course, doing something and being successful at it are two different things. So, you may need to dig further to see if your competitors are seeing positive returns.
Is anyone talking about it?
Social media is a fantastic research tool for finding out what’s popular and what people are asking for. This helps you to identify the level of interest in your idea. It also helps you to understand the potential customer base.
Trying to keep up with trends is not a great way to make money over the long term but social media allows you to test the waters with your ideas.
For example, if you want to launch a fitness product aimed at the Gen Z market, you might find there is more potential if you target stay-at-home dads or women over 50.
It’s also important to keep on top of the news in your niche to see what products are launching and trending.
Is there growth potential?
A further thing to consider is the growth potential of your market. Let’s take an extreme example, which is best illustrated by a chart:

This is the global market for face masks, starting in the pandemic year.
Knowing where your market is headed is important, so you can grow your business over the long term and weather any headwinds, such as new entrants.
You can also keep track of changes, such as research, laws, regulations, and policies – things that might affect customer demand. Set up news briefings from Google or a similar service, which collate all the news in an industry or on a topic.
Find inspiration for your next business idea with Whop’s library of resources.
How to calculate market size
So, now we’ve laid down some groundwork, let’s get into the process of how to calculate market size. We’ll look at the bottom-up approach and the top-down approach.
After setting out the basic formulas, we’ll dig deeper into how you can research the market you want to enter and calculate your segment of that market.
Bottom-up approach
This approach involves finding out two metrics:
1. The estimated number of potential customers in your market
2. Average spend per customer on the product or service
Once you have these numbers, the calculation is:
Target Customers × Average Revenue per Customer
This gives you the likely market size in a dollar amount.
For example:
- Target customers: 200,000
- Average per-person spend: $50
- Market size: 200,000 × $50 = $10m
Top-down approach
This approach is slightly more complicated as it involves narrowing down the total market to identify your target segment. The steps are:
1. Work out the total size of the industry
2. Define your market segment within the total industry
3. Estimate the number of consumers within your segment who might buy your product
Once you have these numbers, the calculation is:
Industry Size x Your % of the Market
For example:
- Industry size: $5bn
- Your segment of the market: 2%
- Market size: $100m
Researching your market
The formulas above involve finding out certain numbers about your industry. So, how do you go about this?
Estimating total industry size
This simply involves looking at relevant data to find out how large the total industry is for your product or service. At this level, we’re looking for a broad number that gives us a general idea of the market.
Another term for this is total addressable market (TAM).
For example, according to Statista, the global ebook market is worth an estimated $14.61bn (as of 2024) and is expected to rise to $15.33bn by 2027. Within this, there are around 1.068 billion readers of ebooks, spending an average of $13.79.

So, we already know that there is a lot of $$$ flowing through the ebook market, meaning it could be a valuable source of revenue.
However, your audience is not everyone in the world who reads ebooks. This is why when talking about how to calculate potential market size, we have to look at defining your segment within this broader market.
Determining your market segment
Within the broader market, you can find your available market, also known as the segmented addressable market (SAM). This is the number of customers within the total market you could potentially reach.
We can also narrow this down further to the serviceable obtainable market (SOM). This is the number of customers within your defined segment who are likely to buy your product. This includes people who would switch from one of your competitors.
For example, we can define the ebook market by genre. If we’re writing a travel ebook, our market automatically shrinks to people interested in non-fiction ebooks about travel. Estimates put this at around 7% of the total market, with revenue of about $350m. This would be our SAM.
However, this can be further defined by the age group, travel style (luxury, budget, etc.), and destination. Researching these figures will give us our SOM. This would be our likely core readership base.
As you can see the narrower we get, the more realistic the market size calculation becomes.
Again, don’t get daunted by all the numbers, formulas, and terms. The point is to simply find out:
✅ Size of the total market
✅ Size of your segment of the market
✅ How much of that segment you can realistically capture
Once armed with those numbers, you can make informed decisions about the viability of your business ideas - and the potential profits you can expect to make.
Learn more about how to calculate target market size in our post, why TAM SAM SOM is important for business owners.
Sources of information and data
There are plenty of sources out there which can provide the information you need to calculate market size and share.
We’ve already talked about leveraging social media as a research tool. However, you can also carry out surveys, look at official government stats and market data, and analyze SEO keywords.
In addition, company financials and news are good sources. Look at the filings of companies in your industry and related press releases.
If you want to make the process simpler, there are lots of free and paid tools and platforms which can help with all aspects of market research, including:
- Statista
- SurveyMonkey
- Google Forms
- Typeform
- SEMRush
- Sprout Social
- PR Newswire
- U.S. Securities and Exchange Commission
What’s a good market size?
This very much depends on the type of business and niche, which is why it’s important to do your research to find out the potential market size and revenue for your business idea.
In general, a figure of $100m is often suggested as a good market size.
However, for some industries and investors, it’s $1bn+. These markets are likely to be over-saturated with lots of competition and several dominant players.
A good example is the mobile phone sector, which is worth around $566bn (as of 2024), with half of the market shared by Apple (27.77%) and Samsung (23.28%).
For sub- and micro-niches, the potential market is likely to be a lot lower, around $15m. But this is balanced out by less competition, so could still prove to be highly lucrative.
Find more inspiration in our posts, lucrative niche market examples for business and online business ideas you can start.
Which markets have potential in 2025?
We end with a few ideas of markets which offer potential. However, always do your own research before diving in (and committing money).
1. As our own stats show, online learning remains a market with excellent potential. It is expected to increase from $185bn last year to $270bn by 2029. Within this, the mobile learning segment is worth around $80bn.
2. The global ecommerce market will reach $4.12tn in 2025, rising to $6.48tn by the end of the decade. Within this broad market, lucrative ecommerce niches include eco-friendly products, which is expected to reach $40.75bn by 2030, and pet care, which is worth around $101bn.
3. We talked about ebooks earlier, using the example of travel. However, if you’re looking for lucrative ebook niches in other segments, self-help and personal development is the largest non-fiction genre. It accounts for 30% of the ebook market and is worth in the region of $1.5bn.
Also popular is the business & entrepreneurship niche, as the creator of the Bike Travel Bundle right here on Whop has found:

4. Another area to explore is podcasting. GMI Insights found the global market was worth $27bn in 2023 and will increase 15% a year to 2032. There are around 546.7 million listeners. Within this, true crime, business & entrepreneurship, and health & wellness are among the most popular niches.
Overall, if you’re starting a business, it’s important to drill down into your market to identify that sweet spot. This is where there is a large enough customer base to make a great profit but not so big that it’s oversaturated.
Grow your business with Whop
Identifying a great business idea with real potential is only the beginning.
You then need to build your business on a platform that will help you to realize that potential – and take it even further.
Whop is an all-in-one platform where you can create your own “whops” – these are your home on the internet which support monetizing all kinds of digital products. That includes those markets with great potential, like podcasts, elearning, ecommerce and ebooks. With Whop you can sell all kinds of digital products, from online courses, to digital downloads, to paid communities, webinars, masterminds, and more.
We handle all the day-to-day stuff – including payments – so you can focus on scaling that awesome business idea.
Sign up today and launch for free. We charge from 3% per sale once you start bringing in revenue.
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