CHAPTER I INTRODUCTION & THEORETICAL BACKGROUND OF THE STUDY

1

1.1 Introduction in to the topic and justification for choosing the topic A market potential forecast is a core component of a market analysis. It projects the future numbers, characteristics, and trends in your target market. A standard analysis shows the projected number of potential customers divided into segments. The facts are sobering: the majority of small businesses fail within five years of starting up. While there are many reasons that businesses fail, including some that have nothing to do with an owner's skills, it’s also possible that many of those same businesses collapsed simply because they couldn’t get enough customers to buy their product or service. In other words, the owners founded their business on a strategy of “build it and they will come” where, unfortunately, the customers never came. In fact, a recent study undertaken by the Blackbox seed accelerator found that many tech start-ups failed because they focused more on their product than on their potential customers. 1.2 Ask the right questions As a first step to determining the potential market for your new product or service, you want to focus on asking a couple of questions of yourself first, says Victor Kwegyir, a business consultant, business motivational speaker, and author of The Business You Can Start: Spotting the Greatest Opportunities in the Economic Downturn. Some of the questions you may want to begin with, Kwegyir says, include: a) Is this product or service I have in mind going to satisfy a market need? b) Who are my potential customers, and where can they be found? c) What competition is out there? Is it direct or indirect, local, national, or international? d) How distinct is my product from what is being offered by the competition? e) Can the product stand the test of changing trends or take