You’ll need to start broadly and refine your research by defining the following elements.
Unlike industry size, which is usually measured in dollars, your market size is how many potential customers there are for your product or service. We’ve got a great method for figuring out your market size that you can read about here.
Describe your customer’s typical age, gender, education, income, and more. If you could paint a picture of your perfect customer, this is where you’ll describe what they look like.
Where are your customers located? A specific country, region, state, city, county, you’ll want to describe that here. You may even find that your customer base is segmented based on location which can help you determine where you’ll be doing business.
These are products that are interchangeable with the product you are developing. Your potential customers are probably using something similar. Example: Toast tongs vs. a fork.
Indirect competition is an alternative solution to the problem you are solving. This is particularly useful and important for companies that are inventing brand new products or services. For example, the first online task management software wasn’t competing with other online task managers—it was competing with paper planners, sticky notes, and other analog to-do lists.
The goal for this project is to develop a product that is different from the competition. Make sure to discuss how your company, product, or service is different than what the competition is offering. For a common business type, such as hair salons, your differentiation might be location, hours, types of services, ambiance, or price.