Estimate addressable market value. The Market Size Calculator takes potential customers in the market, share you can realistically address, annual spend per customer on this product and returns total addressable market (tam) plus serviceable addressable market (sam), sam revenue per 1% market share. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Good business decisions come from putting numbers on the options before committing. Run the calculation with your best estimate, then again with a pessimistic one, and see whether the decision survives both. Use the worked example below to check the maths against your own figures.
How the Market Size Calculator works
A bottom-up market size (customers × spend) is more credible than quoting an industry report. The last line shows what one point of market share is worth.
Worked example
With the example values (potential customers in the market of 500000, share you can realistically address of 20%, annual spend per customer on this product of $200), the total addressable market (tam) is $100,000,000.00; serviceable addressable market (sam) $20,000,000.00, sam revenue per 1% market share $200,000.00. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is total addressable market (tam) calculated?
TAM = potential customers × annual spend; SAM = TAM × addressable share.
Which figures do I need?
Potential customers in the market, share you can realistically address, annual spend per customer on this product. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
How reliable is the result?
As reliable as the estimates you enter. Run the calculation with optimistic and pessimistic inputs to see the range of outcomes before deciding.
