Market share is defined as the proportion of the total sales that a particular Company earns.

An Example of Market Share

If you operate within a particular niche market and sell £5m worth of product, where the total market is £100m, then your market share is 5%.

What Does Market Share Indicate?

Market share indicates the amount of the market you control in comparison to your competitors.

If you are creating a business plan or considering starting a new business, you may want to consider the market available to you as a whole so you understand how big the market is that you intend to sell to. Or if you are going for investment you may want to demonstrate how much your market share will increase once you achieve your growth plans.

Why Increase Market Share?

To Grow

Increasing your market share means business growth and profits. Even if the market your business operates in is not growing, increasing your market share means you can continue to grow your business.

Weakening Your Competitors

Stealing market share means increasing business turnover while weakening your competitors turnover at the same time.

Economies of Sale

By selling more, businesses can develop a cost advantage firstly by being able to negotiate better pricing with suppliers and then being able to pass these cost savings onto customers, securing and growing market share even further.

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Anita is a Chartered Accountant, turned blogger and creator of the ever popular free Go Self Employed Email Mini Course, which has been completed by hundreds of attendees all over the UK. Using her 10 years experience in accounting, tax and operations for Small Businesses, Anita is on a mission to make finance simple for the self employed, so they can stop stressing about tax & finances and focus on building profitable businesses which will give them the lifestyle they dream of.