TAM SAM SOM Calculator
This TAM SAM SOM calculator estimates your market size: enter customers and price or a market volume, choose the shares for SAM and SOM and read TAM, SAM and SOM with the calculation steps.
Source: Wikipedia – Total addressable market (TAM; SAM and SOM as subsets). Updated: .
How it is calculated
With 1,000,000 possible customers and $120 yearly revenue per customer the TAM is $120 million; if your offer reaches 20 % of it the SAM is $24 million, and with 5 % market share in that the SOM is $1.2 million (10,000 customers). The calculator shows all three levels with the calculation steps.
How it is calculated
The TAM describes the whole market for your product. Bottom-up you calculate it from the number of possible customers times yearly revenue per customer, top-down you take the market volume from a study or statistics. The SAM is the part your offer, region, language and sales channels actually reach. The SOM is the share of the SAM you can realistically win in the coming years, depending on competition and budget.
Tips for solid numbers
- Prefer the bottom-up calculation: it shows how you arrive at every number and can be checked.
- Back customer count and price with sources, for example statistics offices, industry reports or your own sales data.
- Choose the SOM cautiously: a market share of a few percent in the first period is more common than double-digit values.
With the export you take the result into a spreadsheet or business plan. More calculators for founders: the SaaS metrics, the break-even calculator and the customer value.
Frequently asked questions
How do I calculate market potential?
Bottom-up: the number of possible customers times yearly revenue per customer gives the TAM. Chosen percentage shares of it give SAM and SOM. Top-down you use a market volume from a source instead.
What is the difference between TAM, SAM and SOM?
The TAM is the whole market, the SAM the part your offer and region reach, and the SOM the part of that you can realistically win.
Bottom-up or top-down?
Bottom-up is usually more credible because every number is justified. Top-down is faster but depends on the quality of the market study. Many founders show both.
How much SOM is realistic?
It depends on competition, budget and sales channel. A small single-digit percentage of the SAM in the first period is more common than very high values.
Sources and legal basis
- Wikipedia – Total addressable market (TAM; SAM and SOM as subsets)
- Wikipedia – Market size (market size, top-down and bottom-up estimation)
As of: · Editorial policy
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