SAM stands for Serviceable Available Market and refers to the part of the overall market that a start-up can, in principle, serve with its current product, business model and range of services.
The SAM is smaller than the total theoretical market, as certain restrictions are taken into account. These include, for example:
- geographical markets
- Features and services offered
- Target sectors
- Target groups and customer segments
- Technical requirements
- legal or regulatory framework
- existing sales and business models
One example:
A start-up is developing a digital accounting solution for small businesses. The global market for accounting software constitutes the total addressable market. If the product is initially only available to small businesses in Germany, this segment corresponds to the SAM.
SAM forms part of the market size analysis alongside TAM and SOM:
| Key figure | Meaning |
| TAM | Total Addressable Market: the total theoretically possible market |
| SAM | Serviceable Available Market: a market which the company can, in principle, serve with its offering |
| SOM | Serviceable Obtainable Market: the market share that the company can realistically achieve |
The SAM analysis helps start-ups to:
- to assess the achievable market potential
- to identify relevant customer groups
- To make marketing and sales more targeted
- to prioritise geographical or sector-specific markets
- Developing growth strategies
- To present the market potential to investors in a clear and comprehensible manner
Start-ups can use various approaches to carry out the calculation:
- Number of potential customers multiplied by the expected turnover per customer
- Analysis of industry and market data
- Analysis of comparable companies
- Projection based on initial customer and sales data
- Segmentation of the overall market by region, sector or company size
A common mistake is to define the SAM too broadly. Not all customers who, in principle, have a problem can actually be reached or served by the current product. Assumptions should therefore be underpinned, as far as possible, by verifiable data and clear criteria.
The SAM may grow as the company develops, for example through new functions, additional target groups, further sales channels or expansion into other countries.
innoWerft helps founders to narrow down their target markets and customer segments, realistically assess market potential, and present TAM, SAM and SOM in a clear and understandable way for business planning, growth and discussions with investors.