Banking and private equity
Market sizing: estimate anything in five steps
How to answer "how many…" and "how big is the market for…" with a clear structure, round numbers and a sanity check from a second method.
Les guides sont en anglais, la langue des entretiens.
What's being tested
Nobody expects the exact answer. The interviewer is checking that you structure the problem, make sensible assumptions out loud, handle numbers calmly and notice when an answer can't be right.
The method
- 1
Clarify
What exactly is counted, where, over what period, and in units or dollars?
- 2
Choose an approach
Top-down (population → share who buy → how often) or bottom-up (number of outlets → sales per outlet).
- 3
Split into drivers
Break the problem into pieces you can estimate. Use round numbers and say each assumption out loud.
- 4
Calculate
Work step by step and write as you go, so the interviewer can follow and correct an assumption.
- 5
Sanity-check
Cross-check with the other approach, give a range, and say which assumption matters most.
Worked examples
Exemple corrigé · How many takeaway coffees are sold in London each day?
Vérifié par codeEstimate the number of takeaway coffees sold in London on a typical weekday.
Voir la résolution
- 1.Clarify: cups bought from cafés and coffee shops, not made at home or at work.
- 2.Top-down: assume about 9 million people. Assume half drink coffee on a given day (4.5 million) and 40% of them buy one takeaway: 1.8 million cups.
- 3.Bottom-up check: assume 4,000 coffee shops selling 450 takeaway cups a day each: 1.8 million.
- 4.The methods agree. The key assumption is the share who buy rather than make their own.
RéponseAbout 1.8 million a day; a range of 1.5 to 2.5 million is reasonable.
Exemple corrigé · From units to revenue
Vérifié par codeRoughly what does one of those coffee shops take in a year?
Voir la résolution
- 1.Assume 450 cups a day at an average of $4.50, open 360 days a year.
- 2.450 × $4.50 = $2,025 a day; × 360 ≈ $729,000.
RéponseAbout $0.7m a year.
Common mistakes
Erreurs fréquentes
- Jumping into numbers before clarifying what's being counted.
- Unrounded numbers: they slow you down and invite arithmetic errors.
- Silent assumptions the interviewer can't correct.
- No sanity check: an answer implying every Londoner buys five coffees a day should be caught by you, not them.
S’entraîner
Appliquez la méthode à de nouvelles questions, corrigées instantanément.
Banking and private equity