Check whether the market is really too small

1. It may be true; it is probably not

The claim runs: I cannot do more because my market is too small. That may be true. It is probably not, but it may be. If you are a local business, it is possible.

The lounge. In one example, an owner's town had, it is thought, 140 people, and the business was a local lounge. That is not going to scale to a billion dollars; there is literally no way. The aggregate economy of the local area is the people times their salary, and that is what you get if 100% of the people give you 100% of their money. There is no more, and nothing else you can do.

2. Real maximums sit higher than you think

In the same way, what the whole world can produce is limited by the number of people who exist, and you cannot sell more than that.

A fun fact goes with it. One tech founder has claimed that attention is compounding at an exponential rate. That is not true. There are 8 billion people and there are 24 hours. That is maximum attention; it cannot compound at an exponential rate. There are only so many eyes and ears.

Real maximums exist, then. They typically sit far higher than you would think.

• If you are local, a market too small is possible.
• If you are anything else, selling nationally, internationally or online, it is super unlikely that you have saturated your market.
• If you are local and have maxed out, you could just go to another market, which is fine. The example: a gym in a town of 400 people in Kentucky. You probably do have it all, if you have all 400 people, and now you have to do another one.

3. Look up your industry's revenue

Search for your industry's revenue. It is a great way to humble yourself. Take an owner at $2 million a year who thinks the niche of agencies for chiropractors is saturated. The answer: no, you have not.

When no figure is published. If your industry's revenue is not public, one practice here estimates it from the supply side. Find the top 10 or 20 producers, get a rough estimate of how much each could make, add those up as a stand-in for total demand, and work out from that what share of the market you hold.

4. Why the belief is so common and so rarely true

It is one of the reasons given most often for why someone cannot grow, and among the least often correct or true.

This happens so frequently that it is kind of funny. The businesses with 140 people in their market almost never say they are the ones with a market too small. It is the owner going after weight loss, making $5 million a year, who thinks it is capped. The reply: it is a $70 billion industry, and they probably have not capped it.

What makes the belief nefarious is that it is so easy. It protects your ego so well. It is a big warm hug that says the market is too small, you are already a winner, you have it all, and you cannot make more because of outside circumstances. It is not you.

5. The story that broke the belief

One owner held the belief too. The owner's business was capped at 30-ish (section 10). Then a sales rep got in touch who worked at another company in the same line of business, one the owner had never heard of. Asked how big the outbound team was, the rep said (it is thought) 40 or 50 people, whatever it was: a decent amount at the time. Asked what the revenue was, the rep said about 10 million a month.

That story completely shifted the owner's view of how many more potential customers there were, when the business was reaching them on only one channel. Maybe it had tapped a channel. Maybe. Probably not. Maybe one element of one channel. And there are so many other channels.

6. One slice of one pie, on a table full of pies

What people picture: I am the only one marketing to vegan powerlifters on Facebook. Then somebody else says they also help vegan powerlifters, and now the pie is split in half. Two more come in, and now I have a quarter of the market.

The reality looks much more like this. Most people have their one method, one platform and one medium, which is fine when you are starting out, but they have not even capped their market. You might have capped one platform. Maybe; probably not. You have only one way of doing it, on one platform, in one medium on that platform: a tiny slice of an even bigger pie, on a table full of pies. There is so much traffic.

It is a belief thing: a declarative view of the world.

The same picture, with the list of channels a single-platform owner is leaving untouched, is on SOP 40 — Choose the next growth move, section 4.

7. No one knows you exist

Walking on the strip, one owner was stopped by a man who said he loved the owner's work. Invited to a launch that was coming up, the man asked what that was. He said he would not be in town; told it was virtual, he said he would check it out, and walked off. It is a great reminder. On that walk there were, probably, five or six people who had seen the owner's work, and one of them, it is thought, knew the launch was coming. Maybe.

No one knows you exist. There is so much traffic, and there are so many people; 8 billion is hard to take in. SOP 194 — Count what it costs to become known draws the same lesson from its own launch stories, and counts what becoming known costs.

8. What a local business can do

These actions are for smaller or local businesses, because they are probably the only ones who could be affected by a market too small. Here is what you could do:

• Expand the location you have. Knock down a wall, or see if you can take over the lease next door.
• Make it more efficient. Within your four walls, increase the delivery ratio. If you had a restaurant, you could tighten up the tables, add more chairs, or experiment with times. Each of these could raise your throughput.
• Expand channels. The only exception made here to the rule of one platform, one avatar and one offer is for local businesses. The main reason: in a local market of, say, ten thousand people, not all of them will be on Meta, and not all on Google. So you might have to do some direct mail, some Google ads, some radio ads and so on. In a local market, it is one of the only times that more than one advertising method is okay.
• Open another location. The obvious one: you are right, the market is too small, so save up money and open another location, which is fine.
• Expand the market segment. You were serving only moms; now you serve moms and dads.

Again, these are for local businesses.

One option is held in reserve. Of these, "the last one" is held in hard reserve, because it marks a big shift in strategy. If the business works, and this really is the true limiter, the true constraint, the preference here is to say: this is working, it is profitable, so repeat it. In the list above, expanding the segment is the option named last.

9. The exit

With your metrics in hand, deciding from them that the market is the issue is super, super unlikely. One case is set against that: a tiny, tiny, tiny local market.

If the market is not too small and you have your numbers but still cannot do more, the next question is the model: SOP 191 — Keep the vehicle and stretch the timeline.

10. What this page does not decide for you

• Which option is held in reserve. By position, "the last one" follows the segment option; the preference to repeat what is working reads most like opening another location. This page does not settle which reading is right.
• Whether adding channels is the only exception or one of a few. It appears both as the only exception and as one of the only times more than one method is okay. Not established on this page.
• What the 30 counts in the story. Not established on this page.
• What a business in a tiny local market does at the exit. Not established on this page.
• Getting each producer's figures. How to obtain them is not covered on this page.

11. The checklist

Step	What to do
Ask where you sell	Local: a market too small is possible. National, international or online: super unlikely
Size a local ceiling	The people in the area times their salary: what you get if all of them give you all of their money
Look up industry revenue	Set your revenue against your industry's; if none is published, add up what the top 10 or 20 producers could make
Count your slice	Name your methods, platforms and media; if it is one of each, you might have capped one platform (probably not), but not the market
Local: expand in place	Take more space, or increase the delivery ratio within your four walls
Local: add channels	Run more than one advertising method, since the people in a local market are not all on one platform
Local: open another location	Save up, and open another location
Local: expand the segment	Add a segment to the one you serve (moms, then moms and dads); one option is held in reserve (section 10)

12. Where this sits

• Where the point at which saturation can be real is taken up: SOP 40, section 4.1.
• Other directions a brand can move to reach a larger market: SOP 93 — Choose a market direction.
• One offer, one avatar and one platform as the setup of the first rung of advertising: SOP 54, section 2. The exception for local businesses in section 8 above is not stated there.
• Targeting for a local market, and why it needs few filters: SOP 36, section 5.

13. What this page does not cover

Raising the delivery ratio and running each added channel are not covered on this page.