This worksheet provides a structured approach to assess your market size using the TAM, SAM, and Target Market framework based on The Art and Science of Market Size Assessment - Understanding TAM, SAM, and Target Market. Complete each table to develop a clear understanding of your market opportunity.
PHASE 1: TOTAL ADDRESSABLE MARKET (TAM)
The maximum theoretical revenue opportunity if you could achieve 100% market share with no constraints.
Step 1: Select TAM Calculation Approach(es)
Choose one or more of the following methods (using multiple approaches is recommended):
| Approach |
Selected (✓) |
Rationale for using this approach |
| Top-Down |
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| Bottom-Up |
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| Value-Creation |
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Step 2: Top-Down TAM Calculation
| Component |
Value |
Source/Notes |
| Overall industry size |
$ |
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| Geographic filter (%) |
% |
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| Demographic filter (%) |
% |
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| Product category filter (%) |
% |
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| Other filter: ________ |
% |
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| TAM (Top-Down) |
$ |
Industry size × all applicable filters |
Step 3: Bottom-Up TAM Calculation
| Component |
Value |
Source/Notes |
| Average Revenue Per Customer (ARPC) |
$ |
|
| Total potential customers |
# |
|
| TAM (Bottom-Up) |
$ |
ARPC × Total potential customers |
Step 4: Value-Creation TAM Calculation
| Component |
Value |
Source/Notes |
| Financial value created per customer |
$ |
|
| Willingness to pay (% of value) |
% |
|
| Number of potential customers |
# |
|
| TAM (Value-Creation) |
$ |
Value × WTP% × Potential customers |
Step 5: TAM Consolidation
| Approach |
TAM Estimate |
Key Assumptions |
| Top-Down |
$ |
|
| Bottom-Up |
$ |
|
| Value-Creation |
$ |
|
| CONSOLIDATED TAM |
$ |
Justified estimate based on approaches above |
PHASE 2: SERVICEABLE AVAILABLE MARKET (SAM)
The portion of TAM that your business can realistically reach given your business model, channels, and constraints.
Step 6: Identify SAM Limiting Factors
| Limiting Factor |
Description of Limitation |
% of TAM Accessible |
| Geographic reach |
|
% |
| Language/localization |
|
% |
| Technology compatibility |
|
% |
| Regulatory constraints |
|
% |
| Distribution capacity |
|
% |
| Pricing accessibility |
|
% |
| Other: ____________ |
|
% |
Step 7: Calculate SAM
| Component |
Value |
Calculation/Notes |
| TAM |
$ |
From Phase 1 |
| Cumulative limitation factor |
% |
Multiply all % of TAM Accessible values from Step 6 |
| SAM |
$ |
TAM × Cumulative limitation factor |
Step 8: SAM Reality Check
| Question |
Answer |
Implications |
| Is the SAM large enough to support your business goals? |
Yes/No |
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| What are the key constraints limiting your SAM? |
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| Can these constraints be addressed to expand your SAM? |
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| What would it take to double your SAM? |
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PHASE 3: TARGET MARKET
The specific customer segments within your SAM that you'll focus on first.
Step 9: SAM Segmentation
List the segments within your SAM using relevant segmentation variables:
| Segment Name |
Description |
Estimated Size (Revenue) |
% of SAM |
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$ |
% |
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$ |
% |
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$ |
% |
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$ |
% |
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$ |
% |
Step 10: Evaluate Segment Attractiveness
Rate each segment on a scale of 1-5 (5 being highest):
| Segment |
Size/Growth |
Competition (low=5) |
Margin Potential |
Acquisition Efficiency |
Strategic Alignment |
Beachhead Potential |
Total Score |
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Step 11: Define Target Market
| Criterion |
Details |
| Selected Target Segment(s) |
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| Precise Description of Target Customer |
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| Total Target Market Size (Revenue) |
$ |
| Target Market as % of SAM |
% |
| Target Market as % of TAM |
% |
Step 12: Customer Persona Development
Persona 1
| Attribute |
Details |
| Name |
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| Demographics |
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| Goals/Objectives |
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| Pain Points/Challenges |
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| Decision-Making Process |
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| Information Sources |
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| Common Objections |
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Persona 2
| Attribute |
Details |
| Name |
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| Demographics |
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| Goals/Objectives |
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| Pain Points/Challenges |
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| Decision-Making Process |
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| Information Sources |
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| Common Objections |
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MARKET SIZING SUMMARY
| Market Level |
Size (Revenue) |
Description |
Key Assumptions |
| TAM |
$ |
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| SAM |
$ |
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| Target Market |
$ |
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NEXT STEPS & STRATEGY IMPLICATIONS
| Strategic Element |
Notes |
| Market Entry Strategy |
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| Resource Allocation |
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| Go-to-Market Approach |
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| Success Metrics |
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| Timeline for Market Expansion |
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Remember: Market sizing is an ongoing process. Review and refine these estimates regularly as you gather more data and as market conditions change.