Wednesday, July 23, 2014

How to determine your TAM (Total Addressable Market)


Whether you’re a startup or an up-and-running business, you should know what your total potential market opportunity is for your products or services.

Caroline Cummings has coached many companies over the years, as well as judged several business plan competitions, and she's always surprised by how most business owners can’t confidently tell you their total market potential. They tell her things like, “My market is everyone who eats dessert,” or, “Everyone in my community who drives a car,” or, “Anyone in the world who uses social networks.”

You may think these are your markets, but you need to drill-down and get more realistic and specific about the true size of your market, or lenders and investors will question your credibility.

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