Size a market · Calculator
TAM SAM SOM Calculator
Size a market from the bottom up: count potential customers, price them, then narrow to the part you can serve and the part you can realistically win.
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What if
Sensitivity to your assumptions
| Win-share scenario | Share won (%) | Customers | SOM revenue / year |
|---|---|---|---|
| 20% lower share | 1.6 | 960 | $2,880,000 |
| Entered share | 2 | 1,200 | $3,600,000 |
| 20% higher share | 2.4 | 1,440 | $4,320,000 |
What are TAM, SAM and SOM?
TAM (total addressable market) is the yearly revenue you would earn if every possible customer bought your product. SAM (serviceable addressable market) is the part of that you can actually serve with your product, region and sales channels. SOM (serviceable obtainable market) is the part of SAM you can realistically win in a set period.
How the calculation works
TAM = potential customers × annual revenue per customer. SAM = TAM × the share you can serve with your product, geography and sales channels. SOM = SAM × the share you can realistically win in your planning period.
Worked example
Suppose 200,000 businesses could use a product priced at $3,000 a year. TAM is $600,000,000. If your product, region and channels reach 30% of them, SAM is $180,000,000. Winning 2% of that in your plan gives a SOM of $3,600,000 a year: 1,200 customers, or $300,000 a month.
Assumptions and limitations
This is the bottom-up method: it counts customers and multiplies by price. Both shares are your assumptions, not market benchmarks; set the win share from how many customers you can actually sign in the period. The calculator does not verify your customer count or use Night Watcher data. Search volume, website visits and paying customers are different units, so none of them can stand in for the customer count.
Frequently asked questions
What is the difference between top-down and bottom-up market sizing?
Top-down starts from a published industry total and takes a percentage of it. Bottom-up counts the customers who could buy and multiplies by what each would pay. Bottom-up is easier to check, because every input is something you can look up or defend, which is why this calculator uses it.
Where do I get the number of potential customers?
From a source that counts your buyer directly: government business counts by industry, professional or trade association membership, platform or marketplace listings, or your own list of qualifying accounts. Write the source, date and region next to the number.
How do I pick a realistic share to win?
Work it out from capacity rather than choosing a round percentage. Estimate how many customers your channels and sales time can sign each month, multiply by the months in your plan, then divide by the customers in your SAM. "We only need 1% of a huge market" skips that step.
Should the market be measured in revenue or customers?
Revenue, so the three figures can be compared with plans and valuations. Keep the customer count beside it: the calculator shows how many customers your SOM implies, which is the number you will have to go and win.
Is search volume a measure of market size?
No. Monthly searches count queries, not buyers, and one person can search many times. Rising searches are useful evidence that people are looking for a solution; keep them as a separate signal rather than an input to TAM.
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