Craft the Perfect Market Size for Your Startup

TAM Defined = Total Available Market
SAM Defined = Serviceable Available Market
SOM Defined = Serviceable Obtainable Market

1) TAM

TAM is the total market demand for a product or service, calculated by multiplying the average annual spend by all potential customers in the market.

📈 TAM Calculation:
Potential Customers x Average Annual Spend

2) SAM

SAM is a subset of TAM representing the total revenue you can earn by reaching customers in a specific geographic area.

📈 SAM Calculation:
Number of Target Customers x Average Annual Spend

3) SOM

SOM is the smallest subset of SAM that you can realistically capture, based on your market reach and sales potential.

📈 SOM Calculation:
Last Year’s Market Share x This Year’s SAM

4) Market Value

Market value is the total potential revenue, calculated by multiplying your sales by the average sale value per customer.

📈 Penetration Rate:
(Number of Customers / Market Size) x 100

📈 Market Value:
Number of Customers x Average Annual Spend

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