Guys I am struggling to find a structure to the following market estimation questions. I went so far as factoring from the population but I have no idea how to get around it for the next step.
Thank you in advance for the help!
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Hi Josh, I am interested in the way you would estimate the revenue of a hospital in London. Should we just use avg nb of patients * price? It doesnt seem comprehesive enough and I am not sure if its MECE. Moreover I think there'll be a lot of assumptions down the line with this method.
Hi Gilbert- I'm not familiar with the abbreviation "nb". Can you clarify that for me?
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Hi Rehan, for hospital revenue- there are a lot of healthcare costs that are not part of hospitals, so it would be too oversimplified to divide healthcare revenue by hospitals. I would take a bottom-up approach for this (i.e. revenue on average for one hospital and then estimate the amount of total hospitals and multiple the two)
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Market Sizing Question: Number of Swimming pool in the UK and Hospital Revenue in London
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Hey there
For swimming pools
Total Pools = # Private Pools + # Public Pools
# Private Pools = No. Households who can afford a pool x % Live in A House x % With Pools
# Public Pools = Total Population without Pools x Assumption of How Many People to a Public Pool (perhaps 1:10,000?)
Hospital Revenue
Revenue = Population of London by age group x % likelihood of getting sick per year x Average spend per incidence of being sick x % who choose to go to hospital
E.g. Breakout population by
1) Elderly: 60+
2) Adult and fit: 30-60
3) Youthful: <30
E.g, Elderly = 2m population (8m * 25%) x 30% chance of being sick per year x $1000 spend per incidence of being sick x %80 likelihood of going to hospital (as likely more serious illness)
Repeat for each age bracket and sum up
Hope that is helpful!
Hi Rehan, for hospital revenue- there are a lot of healthcare costs that are not part of hospitals, so it would be too oversimplified to divide healthcare revenue by hospitals.
I would take a bottom-up approach for this (i.e. revenue on average for one hospital and then estimate the amount of total hospitals and multiple the two)
so your framework requires two parts
1.) A revenue estimation
2.) A market sizing of hospitals
Number of swimming pools in the UK
I would calculate with two categories: private pools and public pools.
Private pools
Population of the UK: 60 million
# of households: 20 million (assuming that an average household consists of 3 people)
Categorizing the households based on their income:
- very rich (5%): 1,000,000 households
- rich (10%): 2,000,000 households
- average (50%): 10,000,000 households
- poor (25%): 5,000,000 households
- very poor (10%): 2,000,000 households
Determining the average # of swimming pools in each category:
- very rich: 1,5 swimming pools / household (assuming that there are some households, which have indoor and outdoor swimming pools)
- rich: 0,8 swimming pools / household
- average: 0,4 swimming pools / household
- poor and very poor: no swimming pools
Consequently:
- very rich UK households: 1,500,000 swimming pools in total
- rich UK households: 1,600,000 swimming pools in total
- average UK households: 4,000,000 swimming pools in total
TOTAL number of private swimming pools in the UK: 1,500,000 + 1,600,000 + 400,000 = 7,100,000
Public pools
Population of the UK: 60 million
Ratio of people, who regularly go to swim: 40%
# of swimming pool visitors: 24 million
- Capacity of an average swimming pool: 8 lines
- Average opening hours: 10 hours / day
- Utility of an average swimming pool: 75%
TOTAL number of public swimming pools in the UK: 24,000,000 / 8 / 10 / 0.75 = 400,000
TOTAL number of swimming pools in the UK: 7,100,000 + 400,000 = 7,500,000
# of pools -
You can start with # of properties
types of properties
pools in each kind of property, then add
Revenue -
total revenue in the healthcare industry
share of cities
share of hospitals
divide by # of hospitals
