What Does Market Share Mean to The Small Business Owner?

October 30, 2023

What Does Market Share Mean to The Small Business Owner?

Business owners count their profits and track their company’s budgets to see how well they are doing in a given fiscal year. Individually, the company may be doing well. However, how does the company fare in the collective market share?

Market share is the portion of a market controlled by a particular company or product. For example, let’s talk about the car industry and the brand, Ford, during the 2022 year. Compared to other brands, Ford has 13.9%of the market share compared to the other brands. Knowing the value of your company’s market share will bring a lot of advantages.

How to Calculate Market Share

How much market share do you have in your industry? There’s a formula to figure this out. Firstly, figure out which period to examine first. This can be a fiscal quarter, one calendar year, or multiple years. Obtain the number of sales in the industry overall for the period chosen to examine. Secondly, calculate your company’s total sales for the same period.


Then take your business’s total sales revenue number and divide it by the industry’s total revenue number, both during the same period. Take this result, and multiply it by 100 to get the market percentage.

Benefits of Knowing the Market Share

Strategy & Advantage

Do you have a clearly defined roadmap to reach the goals you've set for your company? Market share data can help you lay out a strategic plan of action to chart your course. By accurately estimating your market share, you can make informed decisions about how much investment is required to achieve your objectives.

  • hiring
  • office space and expansion
  • pricing for goods and services
  • raising capital
  • developing new products


Analyzing how your industry and company fluctuate in popularity during the fiscal year can prove useful in budget planning, while also providing insight into potential growth or decline for future planning. Focus on the trends for your company with market share ,and how it increases and decreases during the seasonal or quarter changes. Keeping an eye on the market trends can prevent you from losing your share of the market.


It goes without saying that by knowing your market share, you can identify possible profitability predictions, and how to make them more probable. By using your market share value, you can estimate potential customers who actually want to buy your product. You can also see if the market you are after is too small to create the profit that you need.

Hint: You can invest in multiple industries with your goods and services. Ex: A clothing line in the apparel industry can branch out to footwear industry.

How to Increase Market Share

Customer Loyalty

Knowing the market size before making any big business moves will give your company an edge over local competition. Your services may have the potential to capture a wide audience’s attention, but realistically your business will capture a small percentage of that. Increasing your clientele is any vision-focused company’s goal, but a smart company will also know to hold on to current customers.


If your market share remains consistent, then you know you have loyal customers. Likewise, if it increases or decreases, perhaps there is something in your marketing strategies that contributes to the change.

Line of Credit

Increasing your company’s cash flow will provide more flexibility in your business projects. Better cash flow enables your company to settle debts, reinvest in marketing strategies, pay expenses, and provide better future financial planning.


Improving your business with cash flow will allow better management that naturally attracts new clients. Idea Financial offers a Line of Credit to business owners, with same-day approval and funding. As an entrepreneur, a Line of Credit can provide ongoing capital needs, like the market share seasonal fluctuations, and flexibility.


Consistent and impactful advertising presents a promising chance to increase market share. Though it may require significant investment, especially in a fiercely competitive market, advertising is a powerful tool to gain a competitive edge. Additionally, local market share analysis can reveal how effectively advertising is being used to reach potential customers.