Calculating your Total Addressable Market (TAM)

How big is the total market you are competing in?

TAM (in $$) = # Buyers x Frequency of Purchase x Price
1. Estimate your total buyers using the top-down or bottom-up approach. Input your first data point in "Starting Figure".
Directions:
Then depending on your approach, build up that figure or whittle it down using the Assumption lines. Input sources/notes
for each assumption.
2. For "Frequency of Purchase", enter the average number of times a customer will purchase this product/service in one yea
3. EnterYellow
Notes: the average
shadedprice
cellsa are
buyer is willing
locked ot pay for
for editting. this product/service
Pinkish in for
shaded cells are "Average
inputs.Unit Price".
Empty input figure cells should
have a value of 1.

TAM Calculation Source/Notes

Starting Figure 1,500,000,000 Total number of English speaking people in the world
Assumption 1 22% Percentage of english speaking people in the world that live in the US
Assumption 2 26% Mothers in the US who speak English
Assumption 3 1 Amount of people who will use the app for free
Assumption 4 1 Will actually click the adds
Assumption 5 40% Ad Plan
Assumption 6 20% $4.99 plan
Assumption 7 20% $12.99 plan
Assumption 8 20% $49.99 Plan
Estimated TOTAL # of Buyers 85,800,000

TAM (# of Units) 343,200,000

Average Unit Price Price (#oU)*Price
Ad Plan 0.83 56971200
$4.99 plan 4.99 1027540800
$12.99 plan 12.99 668725200
$49.99 Plan 49.99 857828400

TAM ($ Revenue) $ 2,611,065,600

Five Year Growth Yr 1 Yr 2 Yr 3 Yr 4

Annual Growth Rate 2% $ 2,611,065,600 $ 2,663,286,912 $ 2,716,552,650 $ 2,770,883,703
[record sources of growth rate; use industry forecasts]
a point in "Starting Figure".
on lines. Input sources/notes

his product/service in one year.

yice".
input figure cells should

rld
d that live in the US

Frequency of Purchace # of Units Per Plan

2 68640000
12 205920000
3 51480000
1 17160000

Yr 5
$ 2,826,301,377
Calculating your Servieable Addressable Market (SAM)
What is the realistic segment of the TAM you will market your product/service to?

Directions:
1. "Total # Buyers" automatically pulls your TAM from the previous sheet. You can override this with a sourced number. Eith
Depends
2. Use theon what datalines
Assumption can be
to found.
whittle down this number to the realistic segment of the TAM you will market your product/s
sources/notes for each assumption.
3. For "Frequency of Purchase", enter the average number of times a customer will purchase this product/service in one yea
4. Enter the average price a buyer is willing ot pay for this product/service in "Average Unit Price".
Notes: Yellow shaded cells are locked for editting. Pinkish shaded cells are for inputs. Empty input figure cells should ha

SAM Calculation
Total # Buyers 85,800,000
Assumption 1 45%
Assumption 2 85%
Assumption 3 1
Assumption 4 1
Estimated TOTAL # of Customers 32,818,500
Plan Type %
Ad Plan 40%
$4.99 Plan 20%
$12.99 Plan 20%
$49.99 Plan 20%
SAM (# of Units) 105,045,455
Average Unit Price Price
Ad Plan 0.83
$4.99 Plan 4.99
$12.99 Plan 12.99
$49.99 Plan 49.99
SAM ($ Revenue) $ 976,962,900

Calculating your Market Share (MS)

How much of the SAM do you expect to gain as customers?
This is a gut check estimate to get you thinking about how many potential customers you need to reach, and then conver

Directions:
1. Estimate the number of consumers you will reach in Year 1. In other words, how many of people in your potential market
product/service?
2. Input the "Estimated Conversion Rate". Who will you convert from seeing to purchasing?
Notes: Yellow shaded cells are locked for editting. Pinkish shaded cells are for inputs. Empty input figure cells should ha

MS Calculation
Total SAM # Customers 32,818,500
Total SAM $ Revenue $ 976,962,900
Goal of Customers Reached (Year 1) 100,000
Estimated Conversion 5%
Customers Served (Year 1) 5,000
Market Share Percent 0.02%
Market Share $ Revenue $ 148,843
ddressable Market (SAM)
M you will market your product/service to?

ur TAM from the previous sheet. You can override this with a sourced number. Either method is an option.
n this number to the realistic segment of the TAM you will market your product/service to. Input

average number of times a customer will purchase this product/service in one year.
g ot pay for this product/service in "Average Unit Price".
editting. Pinkish shaded cells are for inputs. Empty input figure cells should have a value of 1.

Source/Notes

Mothers with teenaged children. (ages 13-17)

Teenagers that have smartphones.

(Frequency of Purchace)*(Estimated TOTAL # of Customers)*(Seperate %'s)

26254.8
78764400
19691100
6563700

SAM(# of Units)*(Price)
21791.484
393034356
255787389
328119363

e (MS)
o gain as customers?
nking about how many potential customers you need to reach, and then convert to buy your product to e

will reach in Year 1. In other words, how many of people in your potential market will be exposed to your

Who will you convert from seeing to purchasing?

editting. Pinkish shaded cells are for inputs. Empty input figure cells should have a value of 1.

Source/Notes
Reasonable goal.
40% of 25% which is our total conversion will end up being a 10% conversion for 10,000