Business Foundationsadvanced
TAM
Total Addressable Market
Definition
The total revenue opportunity available if your business captured 100% of its target market, used to assess the scale of a business opportunity.
Why it matters
TAM helps founders and investors understand whether a market is worth pursuing. A product serving a £100M TAM has a very different ceiling than one serving a £100B TAM.
Example
An accounting software startup estimates: 5 million self-employed people × £200/year average spend = £1 billion TAM. Even 1% market share = £10M ARR.
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