Irish Calculators
Business

TAM, SAM and SOM Market Size Calculator

Estimate market value from a buyer-and-spend scenario or a supplied total, then apply the selected market shares. Avoid duplicated buyers and keep the annual period and currency consistent.

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How the calculation works

Make a market-size scenario transparent by separating the total addressable market, its serviceable portion and an assumed obtainable share. Supply either a known annual market value or buyer count and annual spending.

Bottom-up TAM = potential customers × annual spend per customer. SAM = TAM × serviceable share. SOM = SAM × obtainable share.

  1. Define the annual market

    Specify the product, geography and customer population represented by your inputs. Bottom-up TAM is customer count times annual spending; top-down TAM uses the entered market amount.

  2. Limit the serviceable portion

    Multiply TAM by the serviceable percentage. This makes the assumptions about which customers or spending the business can actually serve explicit.

  3. Apply the obtainable share

    Multiply SAM by the obtainable percentage. This produces an annual SOM scenario under that assumed share, rather than applying both percentages independently to TAM.

Worked example: Bottom-up market

Sample inputs demonstrate the method. They are not a forecast or product offer.

The example has 100,000 buyers spending €120 annually, giving €12 million TAM. A 25% serviceable share gives €3 million SAM. Taking 10% of that SAM gives a €300,000 annual SOM scenario.

TAM starting point
Potential buyers and annual spend
Potential paying customers
100000
Annual spending per potential customer
120
Serviceable share of TAM (%)
25
Obtainable share of SAM (%)
10

Expected result

Annual TAM
€12,000,000.00
Annual SAM
€3,000,000.00
Annual SOM scenario
€300,000.00
Worked example: Known market value

Sample inputs demonstrate the method. They are not a forecast or product offer.

TAM starting point
Known annual market value
Total annual addressable market value
500000
Serviceable share of TAM (%)
40
Obtainable share of SAM (%)
5

Expected result

Annual SAM
€200,000.00
Annual SOM scenario
€10,000.00

Understanding your result

The calculation organises market assumptions but does not verify them. Buyer duplication, spending evidence and the reasons for restricting the market remain important external research tasks.

SOM is not guaranteed sales. Capacity, competition, pricing and customer acquisition can prevent a business from achieving the share entered, even when the market arithmetic is correct.

Questions you might have

Does the calculator research my market automatically?

No. You supply the market evidence and assumptions. The output is a reproducible scenario, not a verified market-research report.

Choosing the right inputs

TAM starting point
Bottom-up mode multiplies potential paying customers by annual spending. Top-down mode starts from an annual market value already supported by your research.
Annual spending per potential customer
Use annual spending per potential customer in the market being defined. Do not combine a monthly spend estimate with a customer count and label the result annual TAM.
Obtainable share of SAM
Enter obtainable share as a percentage of SAM, not TAM. This nested denominator is important when the serviceable market is a small part of the total.

Common mistakes to avoid

  • Do not count overlapping customer populations twice in the potential-buyer figure.
  • Do not apply the SOM percentage directly to TAM when the field explicitly asks for a share of SAM.

Assumptions to check

  • Use amounts in one currency and one reporting period. Results are labelled EUR; the arithmetic also works for another consistent currency.
  • All market values use an annual period and the same currency. The customer population must exclude duplicated buyers.

Sources and method

Read our calculation and testing approach.