As a business owner, you know just how important it is that your product is something customers will want to buy. Without someone to buy your product or service, the business can’t survive. In fact, according to information from the U.S Small Business Administration Office of Advocacy, only 33 percent of businesses survive past their 10th anniversary. One of the biggest reasons is that they didn’t have a product that filled the target market’s needs. If you are starting a business, keep reading this comprehensive guide to learn the importance of the product-market fit and how you can accomplish it.
What Is Product-Market Fit
The product-market fit is a way of analyzing if your company can succeed or if changes will be necessary. The concept means that your product fills the needs of the consumers. It serves the role in its respective market.
As an entrepreneur, it’s part of your job to assess the market and determine if your product will generate demand.
With that being said, it’s easier said than done. Determining the product-market fit for entrepreneurs is often done after the product is developed and introduced.
There are a few signs that your product fits the market. These can include:
- The product is flying off the shelf
- Customers are talking about it on social media
- The demand is increasing at a steady rate
- It’s generating positive reviews
However, if your product isn’t a good fit in its respective market, you will have a hard time selling the product. You can set up tents at every local event, and nobody seems interested in the business.
When this happens, it’s vital to take a step back and consider if it’s the right product for the market.
Why Does It Matter
Just like in cards, when it comes to starting a business, an entrepreneur must know “when to hold them” and “when to fold them.”
If the product doesn’t appeal to the market, selling it will be like pulling teeth. The importance of product-market fit for entrepreneurs cannot be stressed enough.
Without a product-market fit, you risk the business failing. If nobody wants the product, the company will eventually run out of money without the help of pre seed investors.
In fact, running out of money is the number two reason businesses decide to close their doors. In some instances, you can have a product-market fit and still run out of money if the business is not efficient enough.
The good news is if you have an in-demand product, you will have an easier time finding business funding that can help you accelerate your company. Pre seed funding can inject funds into the business and sustain operations until it’s self-sustainable and generating cash.
Using a pre seed accelerator or a series a accelerator can give your business the boost it needs by showing you how to raise cash and grow your revenue effectively.
Do You Have a Product-Market Fit
When you start a business, your product or service is generally the entire business. As companies develop and grow, they introduce additional products or services.
If you can achieve product-market fit, you are well on your way to a profitable business. But it’s the first product that’s critical to the business’s survival. The rest will come down to startup funding and how efficiently you can get the product in consumers’ hands.
If you own a business and are wondering how to scale your startup, check out our online accelerator program to learn how you can get started today!