Exploring TAM and SAM for Fractional Sales Leadership in the US and Canada

The fractional sales leadership industry is experiencing rapid growth as small and medium-sized businesses (SMBs) increasingly recognize the value of bringing in experienced sales executives on a flexible, part-time basis.

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To better understand the financial opportunity within this market, we attempted to calculate the Total Addressable Market (TAM) and the Serviceable Accessible Market (SAM) for fractional sales leadership, using different approaches, and leveraging available macro-data, data from our own recent study, and documented assumptions. To recap the definitions:

• TAM (Total Addressable Market): The total revenue opportunity available if a product or service captures 100% of the market demand.
• SAM (Serviceable Addressable Market): The portion of the TAM that a company can realistically target based on its business model, geography, and product/service offerings.
• SMB (Small and Medium-Sized Business): A business entity with limited revenue and employee size, typically defined as having fewer than 500 employees and less than $50 million in annual revenue.

TAM Calculation:

What if every Sales Leader in the relevant SMB space was fractional? According to the SBA the definition of a “small business” includes those with 500 employees or fewer. Of those, approximately 3.0 million businesses in the US have between 5 and 100 employees.

Extrapolated to cover the US and Canada, and with an average annual billing rate of $116k, the TAM for fractional sales leaders calculates to be $347b.

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SAM Calculation:

This calculation is largely based on a study we recently published, starting with the supply side of the fractional sales leadership market, and considering the typical workload and engagement structure of fractional sales leaders:

• 9,000 executives as the talent pool.
• 4.3 assignments per year per executive.
• Each assignment lasts an average of 7.6 months.
• The average monthly billing rate per assignment is $9,651.

Using these inputs, the current SAM is calculated to be $2.84 billion or 38,700 assignments annually.

However, we think the market for using fractional sales leadership talent will continue to grow, as it has over the past 5-10 years. Only a small share of relevant US businesses has contracted a fractional executive before, even fewer specifically a fractional sales leader.

Assuming a 10x growth opportunity over the next 5 years, the true and more relevant midterm SAM is $28 billion or 387,000 assignments. At that point about 13% of all “addressable” companies are using a fractional sales leader.

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This market size reflects the growing adoption of fractional models across SMBs seeking cost-effective and results-driven sales leadership. These findings also shed light on the total volume of work and average yield per assignment, further demonstrating the financial potential of the fractional sales leadership space.

To further refine the market analysis, it would be valuable to calculate the Total Addressable Market (TAM), representing the broader opportunity for fractional sales leadership in all possible verticals and business segments. Additionally, breaking down the SAM and assignment volumes by industry or company size could offer deeper insights into where fractional sales leaders can have the greatest impact. Work for another day …

As SMBs continue to seek flexible solutions to drive growth, the fractional sales leadership model is well-positioned to deliver both measurable revenue gains and strategic sales transformation.