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TAM SAM SOM Calculator

Choose bottom-up (number of potential customers × annual price) or top-down (a published total market value). Add the share you can serve and the share you can realistically win to get TAM, SAM and SOM in revenue and customers.

Last updated:

Method

People or businesses that could ever buy this type of product

$

Monthly price × 12 for subscriptions

$

From an industry report or your own estimate

$

Used to convert revenue into customer counts

%

Regions, segments and channels you can serve

%

Share you can realistically win

Path to SOM (optional)
%
Enter your values to see the result.
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How to use the TAM SAM SOM Calculator

  1. Pick a method: bottom-up if you can count customers, top-down if you start from a market report.
  2. Enter the total market: number of potential customers and annual revenue per customer, or the total market value.
  3. Enter the serviceable share: the part of that market your product, region and channels can reach.
  4. Enter the obtainable share: the part of SAM you can realistically win in your planning horizon.
  5. Add market growth if you want a year-by-year view, then press Calculate.

TAM, SAM and SOM formulas

  • TAM (bottom-up) = potential customers × annual revenue per customer
  • TAM (top-down) = total market value from a reliable source
  • SAM = TAM × serviceable share
  • SOM = SAM × obtainable share
  • Customers at each level = revenue ÷ annual revenue per customer

Example (bottom-up): a scheduling tool for dental clinics. There are an estimated 200,000 clinics in the target countries, each paying $100 a month ($1,200 a year): TAM = $240M. Only clinics in English-speaking markets using compatible software are reachable, about 35%: SAM = $84M (70,000 clinics). Winning 3% of them in five years gives SOM = $2.52M, about 2,100 paying clinics.

Top-down vs. bottom-up

Bottom-upTop-down
Starts fromCustomer counts and your priceA published total market figure
Best forPitch decks, pricing and sales plansQuick sanity checks and early research
Main riskOvercounting who would really buyMarket definition that does not match your product
How to check itCompare with competitor revenueRebuild part of it bottom-up

Running both methods and comparing the results is a good test: if they are far apart, one of the assumptions needs a closer look.

Tips for credible market sizing

  • Define the customer precisely. "Clinics with 2–10 chairs in the US and Canada" is easier to count and defend than "dentists".
  • Use your real price, not the price you hope to charge someday.
  • Explain each percentage. SAM should follow from concrete limits such as language, region, integrations or regulation; SOM from sales capacity and competition.
  • Cite your sources for customer counts, such as government business statistics or industry associations.
  • Keep units annual and in one currency.

Frequently asked questions

What are TAM, SAM and SOM?

TAM (total addressable market) is the total yearly revenue if every possible customer bought your type of product. SAM (serviceable addressable market) is the part of TAM your product, pricing, region and channels can actually serve. SOM (serviceable obtainable market) is the part of SAM you can realistically capture in the next few years.

How do you calculate TAM bottom-up?

Bottom-up TAM = number of potential customers × annual revenue per customer. For example, 200,000 small dental clinics × $1,200 a year = $240 million. Bottom-up sizing is usually more convincing to investors because each assumption can be checked.

How do you calculate SAM and SOM?

SAM = TAM × the share of the market you can serve. SOM = SAM × the market share you expect to win. With a $240 million TAM, a 35% serviceable share and a 3% obtainable share, SAM is $84 million and SOM is $2.52 million.

What is top-down market sizing?

Top-down sizing starts from a published total market figure, such as an industry report, and narrows it with percentages. It is quick, but the result depends heavily on the source and on whether the report's definition matches your product.

What is a realistic SOM percentage?

There is no fixed rule. SOM should reflect your sales capacity, marketing budget, competition and timeline. A useful check is to divide SOM by your annual revenue per customer and ask whether your team can really win that many customers.

Should TAM be yearly revenue?

Yes, by convention TAM, SAM and SOM are annual revenue figures. If you charge monthly, multiply the monthly price by 12 before entering it.

Are all the tools on FreeToolCabin tested for quality and accuracy?

Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.

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