Market Size Calculator
Use this free market size calculator to estimate your TAM, SAM, and SOM in seconds. Enter how many potential customers you have, what each is worth per year, and the share of the market you can realistically reach and win to size the opportunity.
Your market
TAM is your whole market. SAM narrows it to the slice you can serve, and SOM is the realistic share you can win in the near term.
Your market size
TAM — Total Addressable Market
$1,200,000,000
total annual market revenue
SAM — Serviceable Available Market
$240,000,000
SOM — Serviceable Obtainable Market
$12,000,000
Market size funnel
The funnel narrows from your total market (TAM) to the share you can realistically capture (SOM).
How this calculator works
Market sizing answers a question every investor and lender asks: how big is the opportunity? The standard framework breaks it into three nested layers — TAM, SAM, and SOM — that funnel from the whole market down to the slice you can realistically capture.
TAM (Total Addressable Market) is the total annual revenue available if every potential customer bought from you. This calculator uses a top-down method: multiply your total number of potential customers by the average annual revenue per customer. SAM (Serviceable Available Market) narrows TAM to the share you can actually serve, and SOM (Serviceable Obtainable Market) is the realistic portion of that you can win in the near term:
TAM = customers × average revenue · SAM = TAM × serviceable % · SOM = SAM × win %
For example, if 1,000,000 potential customers each spend $1,200 per year, your TAM is $1.2 billion. If you can realistically serve 20% of them, your SAM is $240 million, and if you can win 5% of that, your SOM is $12 million. Adjust the four inputs above and the results card and funnel chart update instantly so you can pressure-test your assumptions.
Investors read these numbers as a story: TAM shows the ceiling, SAM shows the market you are actually competing in, and SOM shows what you can credibly achieve with your plan and resources. A huge TAM with a tiny, well-justified SOM is far more convincing than an inflated SOM with no plan behind it. Keep in mind these figures are estimates — every percentage should be justified with research. According to the U.S. Census Bureau, market and demographic data can help you estimate your customer base, and the market analysis section of your business plan is where you show that work.
Sizing your market is one part of a fundable plan. See how investors evaluate the whole picture in the business plans for investors hub, then translate your obtainable market into revenue with the financial projection calculator.
Frequently asked questions
What is TAM, SAM, and SOM?
TAM (Total Addressable Market) is the total annual revenue available if every potential customer bought from you. SAM (Serviceable Available Market) narrows that to the portion you can actually serve given your product, geography, and channels. SOM (Serviceable Obtainable Market) is the realistic share of the SAM you can win in the near term, after accounting for competition and your capacity to reach customers.
How do I estimate my market size?
The most common approach is top-down: estimate your total number of potential customers, multiply by the average annual revenue per customer to get TAM, then apply two percentages — the share you can realistically serve (SAM) and the share of that you can win (SOM). For example, if 1,000,000 potential customers each spend $1,200 a year, your TAM is $1.2 billion; a 20% serviceable share gives a $240 million SAM, and winning 5% of that gives a $12 million SOM. Ground each assumption in research rather than guessing.
Why do investors care about market size?
Investors need to see that the market is big enough to support the returns they are looking for. According to the U.S. Small Business Administration, a business plan should describe and size your target market so readers can judge the opportunity. A clearly sized market shows you understand who your customers are and how much revenue is realistically on the table — TAM frames the upside while SOM shows what is achievable.
What's a realistic SOM?
There is no single right number, but early-stage companies usually capture a small single-digit percentage of their serviceable market in their first few years. A SOM in the low single digits of your SAM is defensible for most new businesses; claiming you will capture a large share quickly tends to make a plan less credible. Tie your SOM to a concrete go-to-market plan and capacity, not just optimism.
Top-down vs bottom-up sizing?
Top-down sizing starts with a large market figure and narrows it with percentages (the method this calculator uses) — it is fast but only as reliable as your assumptions. Bottom-up sizing builds the number up from unit economics: how many customers you can reach through your channels, your conversion rates, and average revenue per customer. The strongest plans use top-down to frame the opportunity and bottom-up to sanity-check that the obtainable share is achievable.
Turn your market into a plan
Your TAM, SAM, and SOM are the start. Optimus Business Plans builds the full, investor-ready market analysis and financials around them.
Create your business plan