Market
~5 minutesMarket Sizing Worksheet
= 3.000.000 ₫
TAM / SAM / SOM (bottom-up)
100% của TAM
40% của TAM
4,0% của TAM
Results are in annual value and depend entirely on the assumptions you enter, not independent market research.
What are TAM, SAM, SOM and why do investors read the market from the bottom up?
Market size is the answer to the question: if the business is successful, how big is the opportunity? This tool builds three market layers TAM, SAM and SOM using the bottom-up method, that is, starting from the business assumptions you can verify such as the number of potential customers and the amount each customer pays in a year. This approach replaces the familiar top-down presentation of "just need to win 1% of the billion-dollar market", which does not say who the business sells to and how.
Dùng công cụ này khi nào
- When preparing the market portion of a capital raising document and need numbers that can explain each step of the assumptions.
- When considering expanding into a new segment, industry or territory and want to estimate the additional market share.
- When reviewing the revenue plan: if the revenue target exceeds the estimated SOM, the plan needs to be reviewed.
Basic calculation
TAM = Total number of potential customers × Average value per customer per year SAM = TAM × Percentage of market the business actually reaches
Bottom-up means starting from two countable numbers: how many customers are suitable for the product, and how much money each customer spends in a year. Multiply these two numbers to get TAM, which is the total opportunity if every customer is served. Then narrow it down: SAM is the part of TAM that your current business model, distribution channels and licenses allow you to access; SOM is the portion of SAM that you expect to actually win over the next few years, based on your sales performance and level of competition. The smaller these three numbers become, the more trustworthy they are, because they show that you understand your limits.
Ví dụ: Suppose that in the target area there are 200,000 business households suitable for the product, each household spends an average of 3 million VND per year. TAM is 600 billion VND per year. Because it currently only serves groups that have digital payment infrastructure, accounting for about 40%, SAM is 240 billion VND per year. If in the next three years the business wins 10% of SAM, SOM is 24 billion VND per year.
Thuật ngữ trong công cụ
- TAM – Total potential marketTotal Addressable Market
- All revenue can be earned if every customer in need uses the product, regardless of capacity limitations or competition. This is the upper boundary of opportunity.
- SAM – Serviceable MarketServiceable Available Market
- The TAM part where businesses actually have access to products, distribution channels, locations and existing legal conditions. The excluded part needs to have a clear explanation for the reason.
- SOM – Winable MarketServiceable Obtainable Market
- The portion of SAM that the business expects to acquire within a specified period of time, usually three to five years. This is a number directly tied to the revenue plan.
- Estimate from the bottom upBottom-up sizing
- How to build market size by multiplying the number of customers by the value per customer, derived from actual operating data. Investors prefer this method because each assumption can be verified.
- Estimating from the top downTop-down sizing
- How to get the industry size from a market report and multiply it by a hypothetical percentage. This method is often questioned because the ratio is chosen arbitrarily and does not indicate how the business wins customers.
- Average value per customerAverage revenue per customer
- The average amount a customer pays in a year. Should be taken from actual sales data or current price lists, along with assumptions about customer retention rates.
Đọc kết quả thế nào
SOM is less than 1% of SAM
The target level is very conservative. This is often a sign that SAM is being defined too broadly, or that the growth plan is not commensurate with the scale of capital expected to be mobilised.
SOM is about 1 – 10% of SAM
This is a common and easily accepted range for the first three to five years. You need to demonstrate sufficient sales capacity and distribution channels to achieve this ratio.
SOM is over 20% of SAM
This is only a reasonable level in a very narrow niche market or when the business has a clear lead. If not, you should review how SAM is determined before including this number in your records.
Results from the tool are for reference only, based on the data you enter and accompanying assumptions. This is not investment advice or a commitment by the Fund as to its funding capacity.
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