Hi all,

I’m interning at a startup and I’ve been asked to come up with a realistic value for the market size of the BPO industry.

This is why my initial thought process has been:

  • Market size = No. of enterprises x No. of minutes of service availed per enterprise x Rate per minute
  • I intend on segmenting the number of enterprises across key industries (banking, insurance, healthcare etc.), then finding out what the BPO services are in each industry and approximately how many minutes would an enterprise avail on that service.
  • This would give me the minutes per service across different services in different industries.
  • I would multiply this by the rate per minute a BPO offers and arrive at the market size.

Does this seem like a realistic approach? This is how I would ideally do it in a case interview lol but I’m wondering if it makes sense in a real sense. Also not sure how I would arrive at the data for each of this.

Looking for any sort of help on how I could go about this, thanks!

  • spewingideas@alien.topBEnglish
    1·
    11 months ago

    I spend a lot of time working with market sizes.

    The first question I’d ask is the purpose of the estimation. Is it to prepare for an investor pitch or is it for their own internal use? This will help you figure out how “accurate” or realistic it needs to be.

    Worth remembering there isn’t one correct way. What you’ve outlined is sensible. A good approach is to do it multiple ways, top-down, bottom up etc to sense check. Look at a big competitor and ask yourself if the estimation you came up with makes sense based on the competitor’s revenue and the implied market share.

    Don’t forget to look for existing reports too. When googling make use of the image function. Sometimes the data points hidden behind paywalls are included in the infographics.