Market potential is a business's, app's, product's, or service's estimated potential to make money. It answers the question: How much market demand is there for what I'm selling?
Conducting a market potential analysis can't predict the future with 100% accuracy, but the process can help gauge if your product launch or new business could be profitable.
The simplest equation for market potential multiplies the market size by the unit price of what you're selling. This helps in estimating if a business idea is feasible.
Market Potential = N × MS × P × Q provides a structured way to analyze potential demand. It involves calculating the number of consumers, market share, pricing, and purchase frequency.
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