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Mobius
Intermediate

What is SAM

Full name: Serviceable Addressable Market

Also known as: serviceable available market

Definition

SAM (serviceable addressable market) is the part of TAM your business can actually reach, given its location, hours, language, licences and business model.

Why it matters

SAM turns a large, abstract market into the customers a business could actually serve tomorrow morning.

Common mistakes

Counting customers the business cannot reach, such as people in another city when it serves one neighbourhood.

Related terms

Worked exampleIllustration

The SAM of one café

Illustrative numbers: one fictional café in one city, no real business.

  1. Start from TAM

    The city has 60,000 adults who buy coffee out, spending ₪1,500 a year each.

    ₪90,000,000

  2. Distance

    Only people who live or work within a ten minute walk can come in for a morning coffee: 8,000 adults.

    8,000 adults

  3. Hours and certificate

    Opening hours and a kosher certificate are the next filters. This café opens early and holds a certificate, so all 8,000 stay in.

  4. SAM

    The reachable customers times their yearly spend.

    8,000 × ₪1,500 = ₪12,000,000

SAM is the part of the city that can actually walk in.

Illustration

The part that can walk in

The market: adults in the café's city who buy coffee out, each spending ₪1,500 a year.

TAM ₪90,000,000, SAM ₪12,000,000, SOM ₪1,500,000TAMSAMSOM
  • TAMThe whole city's yearly spend₪90,000,000
  • SAMAdults within a ten minute walk₪12,000,000
  • SOMWhat the café can actually win₪1,500,000

8,000 adults can walk in, a SAM of ₪12,000,000. More reach alone does not raise SOM: the counter already caps it at ₪1,500,000.

Each ring's area is its yearly value in shekels, for one fictional café in one city.

Definition

SAM is the slice of the total addressable market that a business can serve with the way it works today. The filters are practical: where it operates, when it is open, which languages it serves in, which licences or certificates it holds, and what its business model can deliver. SAM is still a market size, not a sales figure, and the part of it the business can actually win is SOM. The literature uses two expansions for the same measure, serviceable addressable market and serviceable available market.

Why it matters

It is the number a marketing budget should be sized against, because an advert shown to people outside the SAM is money spent on customers who cannot buy. It also shows how the business could widen, since every filter that removes customers is a decision that can be changed.

Directly related: TAM, SOM, Scaling.

Formula

SAM = Customers You Can Reach * Average Yearly Spend per Customer

Improvement tips

  • List every filter that removes customers, distance, hours, language, licences and the model itself, and apply them one at a time.
  • Mark which filters are choices you could change, such as delivery or longer hours, and which are fixed.
  • Calculate SAM again when you add a channel such as delivery or online orders, because each one moves the border.

Common mistakes

  • Treating SAM as the sales plan, when it is still the market you could reach and not the part you will win.
  • Using two names or two expansions for SAM in one plan, so readers think they are two different numbers.
TAM vs SAM vs SOM

Related terms

StartupsIntermediate

TAM

TAM (total addressable market) is the revenue you would earn if every customer in the market you defined bought from you. It is a ceiling, not a sales forecast.

StartupsIntermediate

SOM

SOM (serviceable obtainable market) is the part of the market you can actually win with today's team, budget and hours. In a small business, capacity sets it.

StartupsIntermediate

Scaling

Scaling is growth in which revenue rises faster than costs, so each extra customer adds more profit. In plain growth, costs rise at the same pace as revenue.

StartupsBeginner

Business Model

A business model explains how a business makes money: who pays, for what, and why delivering it costs less than the price the customer pays.

Quick check

How does SAM differ from TAM?

Choose an answer

Frequently asked questions

What is SAM in plain language?
The customers in your market that your business could actually serve today, with its location, hours and way of working, counted by what they spend a year.
What does SAM stand for?
Serviceable addressable market. Some sources write serviceable available market, and both name the same measure.
How do I calculate SAM?
Start from TAM and remove every group you cannot serve: too far away, buying at hours when you are closed, speaking a language you do not serve in, or needing something your model does not offer. Then multiply the customers left by their yearly spend.
Do I need to understand SAM before I launch?
Yes, because it is the market your first marketing reaches. It tells you whether the reachable part alone is large enough to build on.
How does SAM help me plan a marketing budget?
It shows who is worth reaching. Money spent on people outside the SAM reaches customers who cannot buy, however good the advert is.
Can SAM be bigger than TAM?
No. SAM is always a part of TAM. If your SAM comes out bigger, the TAM was defined too narrowly.
How is SAM different from SOM?
SAM is the market you can reach. SOM is the part of it you can actually win with today's team, budget and hours.
How can a business widen its SAM?
By removing a filter: delivery or online orders to cover distance, longer hours, service in another language, or a licence it did not hold before. Each one is a business decision with its own cost.
What goes wrong when a business ignores its SAM?
It pays for reach it cannot serve, such as a national campaign for a business that delivers in one city, and it plans for customers who can never arrive.
Why does SAM matter for a business already running?
It shows how much of the reachable market the business already serves, and whether the next step is winning more of it or widening it.
Is SAM difficult to calculate?
No. It is TAM with filters applied one at a time. The hard part is being honest about which customers you can really serve.
Do I need a lawyer or an accountant to define my SAM?
Not for the estimate, which is a planning exercise. Whether a licence or a permit lets you serve a group of customers is a legal question. Educational material, not legal or tax advice. Check your own case with a lawyer or an accountant.

Sources: Steve Blank and Bob Dorf, The Startup Owner's Manual (2012), Wikipedia, "Serviceable available market" (en.wikipedia.org), read September 2026

Last reviewed: 2026-09-24

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