How big is your serviceable market, really?
Almost every pitch deck has a market-size slide with one confident number on it, and almost all of those numbers are a penetration rate somebody guessed. This template builds the same estimate bottom-up, then runs it as a simulation so the slide shows an honest range and names the assumption it hangs on. The point estimate is not the middle of the range.
Marketing Intermediate Monte Carlo Pro engine
After you install, this is the model to open.
Serviceable Market Size (SAM) Range
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
This one runs on a Pro engine, and every free install includes five full-quality runs on your own numbers, shared across all five Pro engines rather than five for each. After that, Pro is $199/year.
The answer
Ten thousand trials on the three uncertain assumptions turn one number into a distribution, and rank what actually moves it.
- Median market size
- $508M simulated P50
- P10 to P90 range
- $347M to $708M 2.0x wide
- Single-point answer
- $442M 68% chance the truth is higher
- Rest-of-market penetration
- 3.6x the swing of served-region penetration
The tidy bottom-up answer is $442M, but once the penetration rates are ranges rather than guesses the market lands anywhere from $347M to $708M, and the point estimate is beaten 68% of the time because it sits at the mode, not the middle. The assumption doing the damage is penetration outside your served regions: swinging it across its range moves the answer $571M, about 3.6x the swing from penetration inside the metros you actually cover. That is the number to go get evidence for, and the reason your three flagship regions are only about 26% of the customer base at the defaults.
The model
The model counts households, splits them into the regions you serve well and everywhere else, applies a different penetration rate to each, and multiplies by annual revenue per customer.
| Total US households | 132,000,000 |
| Served metro regions | 4.2% + 3.0% + 2.4% = 9.6% of households |
| Penetration in served regions | 2.0% – 4.0% – 7.5% (uncertain) |
| Penetration in rest of market | 0.4% – 1.2% – 2.5% (uncertain) |
| Annual revenue per customer | $180 – $228 – $300 (uncertain) |
| Serviceable market value | total customers x revenue per customer |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
- What are your customer segments, actually?Find Your Real Customer Segments
- The remodel looks better. Would you bet the chain on it?Which Store Layout Sells More?
- Which step of your funnel moves least reliably?Spend, Visits, Sales: What Moves Together?
- Is that channel better, or just one big customer?Which Channel Brings the Big Spenders?
- How far is the campaign from breaking even?The Conversion Rate That Breaks Even
- The variant is up 25.9%. What lift can you actually promise?Did the B Version Win?
Every model like this one, and the method behind them: Monte Carlo simulation.