To calculate SAM, entrepreneurs need to follow these steps:
Identify the target market: Define the specific group of customers that the business aims to serve. Analyze market conditions: Assess the market size, competitive landscape, and customer needs to determine the realistic demand for the product or service. Evaluate business capabilities: Consider the company's resources, distribution channels, and technological capabilities to gauge how effectively it can serve the target market. Estimate market share: Calculate the potential market share the business can capture within the target market based on its competitive advantages and unique value propositions.