Count the companies that fit your aim

What it does

Most market sizes come from a report: a big number that tells you nothing about who to call. Count it from the bottom up instead: the companies that match your aim, checked by hand on a sample, then checked again a second way. It tells you whether your aim is big enough to hit your numbers, and roughly how many buyers are in market at any moment.

What you need

• Your aim, from your won and lost deals
• A contact database that counts companies, like Apollo or Instantly’s lead finder
• Claude or ChatGPT, to check a sample
• A spreadsheet

How it works

1. 1

   Write the filter in words

   One line each: the industry, the size band, the location, the role that buys, how they buy (through a call or demo), and anything else that has to be true. If you can’t write it down, the database can’t find it.

2. 2

   Count it in a contact database

   Set the filters, show one result per company, and read the number of companies, not contacts. Write down the database, the date and the exact filters, so you can run it again.

3. 3

   Check a sample by hand

   Databases label companies loosely. Pull 50 at random and check each one against your filter.

   Prompt for Claude or ChatGPT with web search on

   Here are 50 companies with their websites. For each one, check its website and answer: does it [WHAT THEY MUST DO, E.G. "SELL SOFTWARE TO LOGISTICS COMPANIES THROUGH A SALES CALL"]?
   
   Answer yes, no or unclear for each, with one line on why. If the website doesn't say, answer unclear. Don't guess.
   
   Then give me the share that are yes.

   Multiply the database count by the share that fit. That’s your working count.

4. 4

   Check it a second way

   Use a count that doesn’t come from the same database: government business counts by industry and size, like the US Census Bureau’s Statistics of U.S. Businesses or Statistics Canada’s business counts, an association’s member list, or a second database. If the two land in the same range, you can plan on it. If they’re far apart, find out why first.

5. 5

   Turn it into numbers you can plan on

   Only a small share of any market is buying at a given moment. Chet Holmes put it at about 3% buying now, in his buyer’s pyramid. The B2B Institute and Ehrenberg-Bass put it at about 5% in market at any time, in their 95:5 rule. Use both as a range: they’re rules of thumb, not measurements of your market.

   Google Sheets: paste into A1

   Companies in the database	9000
   Share that fit, from your sample	62%
   Companies that fit	=ROUND(B1*B2,-2)
   Low, minus 30%	=ROUND(B3*0.7,-2)
   High, plus 30%	=ROUND(B3*1.3,-2)
   MRR one customer is worth	1500
   Your market in MRR	=B3*B6
   In market right now, at 3%	=ROUND(B3*3%,0)
   In market right now, at 5%	=ROUND(B3*5%,0)

6. 6

   Check it against your plan

   Compare it with the contacts you need from working back from your deals. If the market is too small for the plan, widen the aim to the next segment, raise the deal size, or add a channel. Better to find out now than three months into a campaign.

What good looks like

A count with a range and a source that you can say in one breath: “About 5,600 companies fit, give or take 30%, and 170 to 280 of them are buying at any moment.”

Mistakes to skip

• Trusting database labels without a sample. Agencies, consultancies and IT shops often list every industry they serve.
• Counting contacts instead of companies. Ten people at one company is still one account.
• Quoting a top-down number from a market report. It sounds big and plans nothing.
• One number with no range. Say “about 5,600, give or take 30%”, and say how you got it.