Addressable Market Defined

addressable market – n : the total potential market for a product or service, measured in dollars of revenue per year. In other words, your business’s addressable market can be calculated by identifying the maximum number of customers who could theoretically buy your category of product or service each year, and multiplying that number times your average selling price per unit. Note that the addressable market includes your product sales plus those of all your direct competitors (i.e., 100 percent market share). [NOTE: This is a crucial piece of data that every venture investor will want to know about your business, so it’s worth putting serious analytical thought into it.