--- title: Building Your Total Addressable Market (TAM) with NAICS Data description: Step-by-step guide to Total Addressable Market (TAM) using NAICS data. Learn how to accurately size markets for investors—no downloads required. image: https://olympusintel.com/hubfs/AI-Generated%20Media/Images/Create%20a%20flat%20retroinspired%20illustration%20reminiscent%20of%201990s%20clip%20art%20depicting%20a%20simplified%20graph%20or%20bar%20chart%20rising%20out%20of%20an%20open%20filing%20cabinet%20or%20folder%20labeled%20with%20abstract%20industry%20icons%20representing%20market%20sizing%20with%20NAICS%20data%20Avoid%20any-1.jpeg --- [![Olympus Intel Market-Sizing Logo](https://olympusintel.com/hubfs/OI%20.png)](https://olympusintel.com) - [Home](https://olympusintel.com) - [About](https://olympusintel.com/about) - [Blog](https://olympusintel.com/blog) - [FAQs](https://olympusintel.com/faqs) - [Contact Us](https://olympusintel.com/contact) [SIGN UP](https://olympusintel.com/checkoutstart-select) [Log In](https://platform.olympusintel.com) Market Sizing # Building Your Total Addressable Market (TAM) with NAICS Data Step-by-step guide to Total Addressable Market (TAM) using NAICS data. Learn how to accurately size markets for investors—no downloads required. [Tyler Sinclair](https://olympusintel.com/blog/author/tyler-sinclair) Jul 7, 2025 --- # Building Your Total Addressable Market (TAM) with NAICS Data *A practical, no-download guide to accurately sizing markets the investor-approved way—straight from public NAICS sources.* ## Table of Contents 1. [Pick Your Addressable Unit](https://olympusintel.com/blog/building-your-total-addressable-market-tam-with-naics-data#unit) 2. [Find Verifiable Unit Counts](https://olympusintel.com/blog/building-your-total-addressable-market-tam-with-naics-data#counts) 3. [Attach Pricing or ARPU](https://olympusintel.com/blog/building-your-total-addressable-market-tam-with-naics-data#price) 4. [Crunch TAM → SAM → SOM](https://olympusintel.com/blog/building-your-total-addressable-market-tam-with-naics-data#calc) 5. [Stress-Test Assumptions](https://olympusintel.com/blog/building-your-total-addressable-market-tam-with-naics-data#stress) 6. [Package the Story](https://olympusintel.com/blog/building-your-total-addressable-market-tam-with-naics-data#story) 7. [FAQ](https://olympusintel.com/blog/building-your-total-addressable-market-tam-with-naics-data#faq) --- ## 1. Pick Your Addressable Unit Your “unit” can be firms, locations, transactions, or end-users. Choose the level **you can count with verifiable data**. For most B2B scenarios, precise six-digit [NAICS codes](https://olympusintel.com/blog/naics-code-cheat-sheet-2025) are the ideal anchor. ## 2. Find Verifiable Unit Counts - **County Business Patterns (CBP)** – detailed firm counts segmented by NAICS, geography, and size - **Bureau of Labor Statistics (BLS) QCEW** – quarterly establishment counts, employment, and wage data - **SEC 10‑K Filings** – publicly disclosed competitor data to cross-validate unit assumptions **Example:** NAICS 236220 (Commercial Contractors) has `48,127` firms according to CBP data; NAICS 238910 (Site Preparation Contractors) adds another `10,998`. ## 3. Attach Pricing or ARPU ``` TAM = Units × Price × 12 months ``` If you sell by seat or user, use Average Revenue Per User (ARPU); if you sell per firm, use your average contract value. Always model at least *two* price points (e.g., standard and discounted) to assess sensitivity and market elasticity. ## 4. Crunch TAM → SAM → SOM 1. **Total Addressable Market (TAM):** Start broadly: `Units × Price × 12 months` 2. **Serviceable Available Market (SAM):** Refine by realistic criteria (geography, size, segment fit). Example: West Coast firms represent 42%; mid-market firms represent 78% of those. 3. **Serviceable Obtainable Market (SOM):** Apply your attainable market share over a defined timeline (e.g., realistically capturing 5% market share within three years). *Tip:* Investors value conservative, clearly-explained assumptions—use actual industry benchmarks wherever possible. ## 5. Stress-Test Assumptions Investors love realistic stress-testing. Show robustness by evaluating: - **Geographic variability:** Compare nationwide versus targeted regional market sizing. - **Price sensitivity:** Simulate pricing pressure scenarios (e.g., 20% lower pricing). - **Market share sensitivity:** Model conservative (3%) versus optimistic (8%) market share scenarios. - **Competitive responses:** Assume varying competitive intensity and how it affects market penetration. ## 6. Package the Story 1. **Problem statement:** Clearly define the pain point, e.g., "59,000 contractors lack efficient site management solutions." 2. **TAM headline:** Frame the market size compellingly: "That's a $2.5 billion annual market opportunity." 3. **Why now:** Emphasize market triggers—like regulatory shifts, technological advancements, or evolving customer expectations. 4. **Your strategy and plan:** Define your achievable market capture clearly, e.g., "Achieving a 5% market share translates into a $98 million revenue opportunity (SOM), with a clear path to $5M Annual Recurring Revenue (ARR) in 18 months." ### Run Your Model in Minutes Skip manual research—**Olympus Intel** pulls accurate CBP and BLS data in a single click. [Run Your Model](https://olympusintel.com/checkoutstart-select) ## Frequently Asked Questions Is bottom-up sizing always better than top-down? Bottom-up analysis uses verifiable data points, making it more credible. However, cross-checking with top-down approaches can strengthen your overall market analysis. How many NAICS digits should I show investors? Use full six-digit NAICS codes whenever available for maximum precision. Roll-up broader categories only if specific data is unavailable or insufficient. What if my business spans multiple NAICS codes? Clearly allocate revenue or activities across multiple codes and weight them accordingly to reflect accurate market sizing. [Market Sizing](https://olympusintel.com/blog/tag/market-sizing) ## Similar posts Market Sizing ### [Bottoms-Up Market Sizing: A Framework for Entreprenuers](https://olympusintel.com/blog/bottoms-up-market-sizing-guide-for-entrepreneur) A step-by-step guide to bottoms-up market sizing for entrepreneurs. Learn to calculate TAM, SAM, and SOM with real data to make informed decisions. Tyler Sinclair Jun 5, 2025 Market Sizing ### [What is TAM and How to Calculate It: Unlocking Your Market Potential](https://olympusintel.com/blog/what-is-tam-and-how-to-calculate-it-unlocking-your-market-potential) Learn what Total Addressable Market (TAM) is, why it matters, and a simple step-by-step method to calculate your market’s true potential Chris Doty Sep 9, 2024 Market Opportunity ### [The Ultimate Guide to Market Entry Analysis for Startups](https://olympusintel.com/blog/the-ultimate-guide-to-market-entry-analysis-for-startups) Master Market Entry Analysis for startups. Learn key steps, overcome challenges, and see how Olympus Intel simplifies your market entry strategy. Tyler Sinclair Jun 8, 2025 ### Get notified on new marketing insights Be the first to know about new B2B SaaS Marketing insights to build or refine your marketing function with the tools and knowledge of today’s industry. ![Olympus Intel](https://olympusintel.com/hs-fs/hubfs/Artboard%2018-1.png?width=300&height=62&name=Artboard%2018-1.png "Olympus Intel")   [LinkedIn](https://www.linkedin.com/company/olympus-intel) [Privacy Policy](https://olympusintel.com/privacy-policy) [Terms of Service](https://olympusintel.com/terms-of-use) [Email Us](https://olympusintel.com/contact)   Copyright © 2024 Olympus Intel  ### Subscribe to be the first to know about upcoming product releases, new resources, and more! ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Tyler Sinclair", "url" : "https://olympusintel.com/blog/author/tyler-sinclair" }, "dateModified" : "2025-07-07T19:28:47.206Z", "datePublished" : "2025-07-07T19:28:27.000Z", "headline" : "Building Your Total Addressable Market (TAM) with NAICS Data", "image" : [ "https://olympusintel.com/hubfs/AI-Generated%20Media/Images/Create%20a%20flat%20retroinspired%20illustration%20reminiscent%20of%201990s%20clip%20art%20depicting%20a%20simplified%20graph%20or%20bar%20chart%20rising%20out%20of%20an%20open%20filing%20cabinet%20or%20folder%20labeled%20with%20abstract%20industry%20icons%20representing%20market%20sizing%20with%20NAICS%20data%20Avoid%20any-1.jpeg" ], "mainEntityOfPage" : { "@id" : "https://olympusintel.com/blog/building-your-total-addressable-market-tam-with-naics-data", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://olympusintel.com/hubfs/OI%20.png" }, "name" : "Olympus Intel" } } ``` ```json { "@context" : "https://schema.org", "@type" : "BreadcrumbList", "itemListElement" : [ { "@type" : "ListItem", "item" : "https://olympusintel.com/", "name" : "Home", "position" : 1 }, { "@type" : "ListItem", "item" : "https://olympusintel.com/blog", "name" : "Blog", "position" : 2 }, { "@type" : "ListItem", "name" : "How to Calculate TAM Using NAICS Data", "position" : 3 } ] } ``` ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Organization", "name" : "Olympus Intel" }, "datePublished" : "2025-07-07", "description" : "Step-by-step guide to building your Total Addressable Market (TAM) using reliable NAICS data. 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