Market Sizing is done two different ways: Drilling Down or Building Up.
"Drilling down" requires comparable companies, generally public or large private companies, with similar product/services and customers. These companies provide audited data or sales figures to allow ratios to be constructed comparing existing businesses to potential businesses. It also provides a list of potential competitors.
"Building up" is more difficult but can yield valuable insight into businesses and markets too small or niche for large companies to take advantage of. Start with customer total numbers and estimate market share for potential competitors. This model works best in smaller, regional markets or where the product/services are niche, or there is uncertainty in the market.
Estimate the potential market horizon for your product/services. How long will it take to build market share in this market? Can you steal market share or is this truly an organic growth potential. Is there a way to disrupt this market and what model will best accomplish this.
Estimate how long your product/services will remain competitive in this market.
