What is Total Addressable Market?

Total Addressable market size is referred as the total number of user-profiles or people meeting the product requirement of a particular company or a business organization or a start-up whose product is yet to be launched. So basically, this is a revenue opportunity that needs to be analyzed by a business owner before launching any product or service. 

Total Addressable Market gives a clear-cut picture to the business owner about the future business predictions and thus accordingly he can strategize his product or service in accordance with the requirements of the market.

How to calculate total addressable market size?

Total Addressable Market size is basically calculated by multiplying the total number of user-profiles and the annual contract value that you are charging from each user. In the below line, I have created a basic total addressable market size calculator along with a revenue predictor.

Things to keep in mind before calculating the total number of user profiles (How to create a buyer persona)

Before calculating the TAM for your business, first you need to create an ideal profile of your customers where you need to research few of the following parameters of your customers:

• Age
• Gender
• Place of Living
• Religion
• Interests
• Professional title
• Income level
• Standard of living
• Family size
• Key decision-makers

What is serviceable addressable market ?

Served Available Market or SAM is a portion of the total addressable market size that a particular business organization is serving. Served Available Market gives an exact calculation about how much revenue you can make with your existing product.

What is a serviceable obtainable market (SOM)?

Serviceable obtainable market is the portion of the served available market which is available for business. Serviceable obtainable market is also termed as the market share of each business organization