How to Determine Your Market Size

TAM-SAM-SOM

  • TAM (Total Available Market): External possible market for your product or service.
  • SAM (Serviceable Available Market): Subset of your TAM limited to your specific geographic area.
  • SOM (Serviceable Obtainable Market): Subset of your SAM you are realistically able to capture.


Calculate Your TAM: What is TAM?

TAM is an abbreviation for Total Addressable Market, which is the total market demand for a product or service. It is calculated by multiplying the average cost of your product or service and multiplying by the total amount of people in your total market.


Calculate Your SAM: What is SAM?

Serviceable Addressable Market (SAM) is a subset of your Total Addressable Market (TAM) that you can reach within a specific geographical area. It is a calculation of the total revenue you could earn by selling your product or service to everyone in that geographical area. SAM assists you in determining your potential revenue in a specific market and is useful in business strategy planning.


Calculate Your SOM: What is SOM?

The Service Obtainable Market (SOM) is the subset of your Serviceable Addressable Market (SAM) that represents the portion of your potential market on a company, product, or service-specific basis that can be realistically obtained in a specific geographic area.