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FIN 480/536 - Finance for New Ventures

Target market and size

TAM (Total Addressable Market)

If you had 100% of the market that your product or service is designed to serve. The ideal.

  • Find market research reports discussing market size, or consider your target audience and calculate the size using population or business patterns data and the cost of your product/service.

SAM (Serviceable Addressable Market)

A sub-set of TAM that your product or service will realistically target.

  • Use consumer behavior research, surveys, and demographics to refine your target customer. What person or business is the most likely candidate to buy your product/service?

SOM (Serviceable Obtainable Market)

A percentage of SAM. Your goal based on existing competition, industry environment, and your business plan.

  • Research competitors, similar companies, and the industry to understand the challenges, ease of entry, key performance indicators, and other factors of the industry that might influence your share of the market.

Market and consumer research

Survey data

These resources provide survey data on consumer behavior and preferences, including demographics, lifestyles, opinions, shopping habits, and more. Pay attention to the survey source (who created, disseminated, and analyzed the survey), survey collection dates, sample size, and sample demographics (e.g., adults aged 18 to 24 in the United States, adults aged 18+ who own a car, etc.).

Consider what kind of data you need. Some databases allow you to create crosstabs to better combine certain questions, answers, and demographics to tell a story.