Commercial
Addressable Market
Also known as: TAM (total addressable market), serviceable addressable market, SAM
The total revenue opportunity in the geography and segments where the business actually competes — defined by third-party data, not the founder's estimate.
WHY IT MATTERS
Every buyer's commercial team sizes the addressable market before they size the offer. The addressable market answers a specific question: how big is the pool this business is fishing in? A founder who says their market is $500M when third-party data shows $340M has already lost credibility with the analyst. The addressable market is not the total industry — it's the subset defined by geography, customer type, service type, and competitive reach. Founders tend to overestimate it because they've never measured it. They assume that because revenue is growing, the market must be large and healthy. The buyer's analyst pulls industry reports, association data, and commercial real estate metrics to build the actual number — often for a few thousand dollars or from databases the founder already pays for but has never opened. Knowing the addressable market before diligence starts lets the founder control the narrative about growth: is it market expansion, market share capture, or — the worst case — share gain in a contracting market?