How B2B Market Sizing Works: Mapping Your Business Landscape

Understanding the market size is crucial for any business, but it’s especially significant in the B2B sector. B2B market sizing provides valuable insights into potential revenue opportunities, helps in strategic planning, and ensures resource allocation aligns with market potential. This article explores what market sizing is, why B2B market sizing is important, common industry sectors for B2B market sizing, and how to calculate market sizing with multiple verticals.

What is Market Sizing?

Market sizing is the process of estimating the potential of a market in terms of volume or value. For B2B companies, this means determining how many businesses might be interested in their products or services and estimating the potential revenue from these businesses. Accurate market sizing informs strategic decisions, from product development to marketing strategies and investment planning.

Why is B2B Market Sizing Important?

1. Strategic Planning: Understand your potential market size to set realistic goals and develop effective strategies.
2. Resource Allocation: Identify lucrative segments to focus your budget, team, and R&D where they’ll have the greatest ROI.
3. Investment Attraction: Present clear, credible sizing data to investors to demonstrate growth potential.

Common Industries for B2B Sizing

• Technology: Software, hardware & IT services—see our AI-Powered Insights for advanced analysis.
• Manufacturing: Industrial equipment & materials—leverage our Market Opportunity Simulator.
• Healthcare: Medical devices, pharmaceuticals & health IT.
• Financial Services: Loans, insurance & investment products.

Calculating Multi-Segment TAM, SAM & SOM

For businesses targeting diverse verticals, follow these steps:

1. Identify segments: List each industry vertical (e.g., healthcare, finance).
   1. Calculate TAM per segment:
      1. Count businesses in each segment.
      2. Estimate % that could use your offering.
      3. Multiply by average deal size: TAM_seg = #Businesses × %Potential × AvgDeal
2. Sum segment TAMs: Total TAM = Σ TAM_seg
3. Determine SAM: Filter TAM by what you can serve now—your product scope, geography & channels.
4. Estimate SOM: Refine SAM to what you can capture near-term considering competition & capacity.

Real-World Examples

1. Technology: Global cloud spend → regional IT budgets → your segment’s share.
2. Manufacturing: Industry equipment demand → product-specific usage → your regional capacity.

Tools to Simplify Sizing

B2B market sizing is an ongoing process. Regularly refine your TAM, SAM & SOM to stay aligned with market shifts and growth goals.

Questions? Get in touch!

You may also like:

• What Is TAM & How to Calculate It
• Comprehensive TAM, SAM & SOM Guide
• Defining & Calculating SOM