InfyCalculator
📈

TAM SAM SOM Calculator — Market Size for a Business Plan

Estimate total addressable market (TAM), serviceable available market (SAM) and serviceable obtainable market (SOM) bottom-up from customer count, annual revenue per customer and realistic reach.

Potential customers in the whole market
Annual revenue per customer
Share you can serve (SAM)
Share of SAM you can win (SOM)
Loading calculator…

How it works

TAM = potential customers × annual revenue per customer · SAM = TAM × share you can serve · SOM = SAM × share of SAM you can win · Customers served = customers × SAM % × SOM %

TAM, SAM and SOM size a market in three nested circles. TAM is all the annual revenue available if every possible customer bought; SAM is the part your product, price point, channels and geography can actually reach; SOM is the slice of SAM you can realistically capture in the next few years against competitors. Investors trust bottom-up estimates (customers × price) more than top-down percentages of an industry report, and they expect SOM to be modest — a few percent of SAM for a new entrant.

Worked example

With 500,000 potential customers each worth $1,200 a year, TAM = $600,000,000. If 30% are reachable, SAM = $180,000,000 (150,000 customers). Winning 5% of SAM gives a SOM of $9,000,000 a year from 7,500 customers — 1.50% of TAM.

Sources: Wikipedia — Total addressable market · U.S. SBA — Market research and competitive analysis

Frequently asked questions

How do you calculate TAM, SAM and SOM?

Bottom-up: TAM = number of potential customers × annual revenue per customer. SAM = TAM × the share you can reach with your product and channels. SOM = SAM × the share you can realistically win.

What is a realistic SOM?

For a new business, a few percent of SAM over 3–5 years is a credible starting point. Base it on your sales capacity, conversion rates and competitors' shares rather than a round guess.

What is the difference between TAM and SAM?

TAM counts every possible buyer of this type of product anywhere; SAM narrows it to buyers your specific offer can serve — the right segment, region, language, price point or regulation.

Should I use top-down or bottom-up market sizing?

Use bottom-up (customers × price) as your main estimate because it shows your assumptions, and check it against top-down industry figures. Large gaps between the two reveal a wrong assumption.

Related calculators

Planning estimate only. Real results depend on your actual costs, prices, taxes and market — check the figures with your accountant or adviser before making business decisions.