The answer at a glance
State the eligible population, annual revenue per account, reachable segment, and obtainable share. Show the formula, unit, source period, and uncertainty for each input.
Use a checkable method
Define geography, customer eligibility, and the offer. A population statistic is not automatically a buyer count, and a broad category can overstate the addressable segment.[1]
Choose an annual revenue-per-account assumption supported by your business model. Keep units consistent with the population and label estimates.
Narrow TAM to the serviceable segment, then state an obtainable share for SOM. Explain whether that share reflects access, channel capacity, delivery capacity, or only a hypothesis.
Challenge smaller shares and reconcile the model with a sales forecast. A market-size calculation cannot establish your actual customer acquisition or revenue.
Worked fictional example
Prepared inputs: 1,000 hypothetical accounts, USD 1,200 annual revenue per account, 40% serviceable share, and 5% obtainable share.
TAM is USD 1,200,000 annually. SAM is USD 480,000. SOM is USD 24,000 and corresponds to 20 accounts under the same unit assumptions.
Ask whether reaching and serving 20 accounts is plausible. All inputs are fictional; none is a retrieved industry statistic.
Limits to keep visible
This method does not estimate willingness to pay, probability of winning, growth, or competition. A large market is not evidence that the first segment is reachable.
Kona Workspace supports saved business work and supported exports, subject to authentication, usage limits, configuration, and user review. Source links do not automatically certify every conclusion.[2]
Continue with your own evidence
Use the public TAM/SAM/SOM calculator for arithmetic, then prepare a deeper research question in Workspace. Keep numerical inputs out of analytics and private handoff URLs.
- Formula caches match independently calculated values.
- Inputs are editable and referenced by formulas.
- Opening/closing cash reconciles across months.
- Excluded cash items are visible.
Yours to use
Forecast and scenarios sample pack — method notes
Prepared fictional notes to inspect and revise. Editable Office files are available from the related sample pack.
Markdown · Opens in any text editor · No signup required
# Cedar Cycle — scenario model
Prepared fictional Kona example. Not a live AI run, customer story, verified demand, or approved financial/legal advice.
## Prepared inputs
Cedar Cycle is a fictional mobile bicycle-service concept. Unit price USD 100; variable cost USD 40/visit; monthly fixed cost USD 2,000; opening cash USD 10,000. Downside/base/upside volume: 30/40/50 visits per month. All figures are prepared assumptions. The simplified model excludes tax, debt, capex, payment timing, and changing capacity costs.
## Formulas
Revenue = monthly visits × price. Variable cost = monthly visits × variable cost per visit. Gross contribution = revenue − variable cost. Simplified operating cash = gross contribution − monthly fixed cost. Ending cash = prior cash + operating cash.
## Expected results
Downside monthly result: USD −200; month-12 cash: USD 7,600. Base monthly result: USD 400; month-12 cash: USD 14,800. Upside monthly result: USD 1,000; month-12 cash: USD 22,000.
## Review
These are constant-month scenarios. They are not tax, debt, capex, payment-timing, or probability-weighted forecasts. Do not read opening cash as an observed real account balance.
## How to revise
Edit the Inputs sheet, open the XLSX in compatible spreadsheet software, and inspect formula recalculation. Add supported lines explicitly if your business needs them.
## Review checklist
- Formula caches match independently calculated values.
- Inputs are editable and referenced by formulas.
- Opening/closing cash reconciles across months.
- Excluded cash items are visible.Sources
Sources and further reading
[1]
Planning and market research resourcesU.S. Small Business Administration
[2]
Kona capabilities and current limitsKona Business
Editorial method
This guide combines the linked sources with a worked example and a reusable template. Replace example inputs with your own evidence and check the result before making a business decision.
About Kona’s editorial standardsPut it into practice
Adapt this to your business in Workspace
Copy the brief below, open Workspace, and paste it with the inputs you want to use. Review the assumptions and calculations before relying on the output.
Use the public TAM/SAM/SOM calculator for arithmetic, then prepare a deeper research question in Workspace. Keep numerical inputs out of analytics and private handoff URLs.
Keep working on the decision
Validate a business idea with evidence, not a polished plan
Turn a customer hypothesis into a bounded test. Use a worked service-business example, an evidence table, and decision gates before committing resources.
Build a competitor matrix that helps a real decision
Compare the same customer job, record official sources and unknowns, and turn differences into testable positioning. Includes a prepared downloadable matrix.