About Tyler Jensen

I work with entrepreneurs who are looking to attract investment and get out of the "Garage". I am passionate about helping entrepreneurs start companies that matter. I helped launch over 100 Companies, Non-Profits and Social Enterprises. I consider myself a serial entrepreneur, startup coach & trusted advisor. * Launching New Companies (For Profit, Non-Profit and Social Enterprise) * Expert Business Plan Writer * Extensive Network of Business Relationships focused on Launch & Rapid Growth of New Companies * Startup, Growth, Marketing, Technology, Web, Business Systems * Trusted Advisor to CEO’s & Entrepreneurs * Capital Raising Strategy Development * Startup Team Development The first company I started and sold is VAVi Sport & Social Club which grew to over 25,000 members in six years, was recognized as San Diego’s 30th fastest growing private company in 2006 by the San Diego Business Journal and 32nd fastest in 2007, and sold for over 25X the capital investment.

5 Excellent Startup Tips on Securing a Bank Loan

Bank Loan Tips From The Startup Garage

5 Excellent Startup Tips on Securing a Bank Loan

It’s no secret that securing bank funding for your startup is difficult these days – but it’s not impossible.

Give yourself better odds with these 5 simple
Startup tips:

Write a clear and convincing business plan.

Business owners must build a strategy from the very beginning around being “lendable,” so a business plan helps lay that proper foundation. Focus especially on the financial estimates and offer well-researched documentation for those estimates.

In addition, be sure to illustrate in your plan how you will generate revenue, how
much you’ll generate and how long it will take to get to positive cash flows. (Side tip: you may
want to have a CPA look over your financials beforehand).

Boost your credit rating.

A solid credit score lends legitimacy to your request and shows you’re less of a financial risk to the bank. They’ll want to see that you have a history of paying bills on time, as well as your history of minimizing outstanding debt. Have a less than desirable credit score?

Seek out smaller, more local banks, since large banks typically are pickier as to the kinds of businesses they want to work with. Smaller ones may be more forgiving of new businesses and may have less stringent credit requirements for opening accounts and lines of credit.

Launch your business in a solid industry.

Certain industries, such as food service and apparel,are considered extremely risky by potential lenders. Thus, if you are determined to get bank funding, consider an industry that doesn’t depend on fluctuating resources (such as oil prices) and has a relatively large profit margin.

Once selecting that industry, be sure to demonstrate your experience in it: offer real, measurable examples of your expertise in your chosen industry or of your experience of running successful businesses. Banks back those with a track record of success, so you’ll have to convince them you have the skill set, drive and experience to make their lending decision a successful one.

Owner’s equity.

If you expect lenders to put their “skin in the game,” they’re going to expect
you to do the same. As a general rule, you should personally invest 20% of the total projected
loan request. Your willingness to risk a sizeable portion of your own capital (and not just capital from their bank loans) shows your commitment to the venture.

Relationships are key.

Ultimately, securing a bank loan is about building a relationship with your bank, and if done correctly, your banker can become your biggest ally. If the banker knows you, your business operations and that you have good employees and a stable customer base, they
will be more likely to go out on a limb for you.

Having a good relationship with your bank can
make running your business a lot easier, so don’t underestimate it!

If you have a question about your raising capital for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

How to Craft an Effective Mission Statement For Your Startup

How to Craft an Effective Mission Statement For Your Startup

When developing a business, an important component of your overall strategic plan is a mission statement.

This brief statement declares the purpose of an organization and defines the reason for the
company’s existence. It provides the framework to help guide the company’s strategies and actions by spelling out the business’s overall goal.

Ultimately, a mission statement helps guide decision-making internally, while also articulating what your business is all about to customers, suppliers and the community.

An effective mission statement is clear and concise, yet resonates with both employees and those
outside of the organization. It captures, in a few succinct sentences, the essence of your business’s purpose in a way that inspires support and ongoing commitment.

So, how should you go about crafting one for your business? Here are some helpful tips:

Involve others

The best way to develop a mission statement is to brainstorm with those connected to your business. Ask employees, customers and investors what they see as your biggest strengths and weaknesses. It’s important to see how others see your company and your brand so that you have more than one perspective. Not only will you get a more comprehensive statement that’s reflective of your company culture, but your employees will be more invested in it because they helped form it.

It takes time

Crafting a mission statement of value requires time, thought and planning. Typically, it’s recommended to set aside several hours – a full day, if you have it – to piece together everyone’s ideas and arrive at a finished product. Though time-consuming, this process will solidify the reason for what you are doing and help clarify the motivations behind your business.

Make it count

Even though mission statements are short, every word counts. Your statement should not only be memorable, but it should inspire action, as well. However, there’s no need to make it overly complicated – just state the purpose of your company and your reason for starting it in the first place. Its value only comes from when stakeholders can use it as a guide when making day-to-day decisions.

Spread the word

Once your mission statement is complete, display it internally and externally with pride. Post the statement in the office, print it on company materials and be able to recite it to potential customers who walk through the door. This way, you can ensure everyone who reads it understands the direction of the company and why you’ve chosen that focus.

If you have a question about your mission statement for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

How to Create a Social Media Profile For Your Business

How to Create a Social Media Profile For Your Business

As a startup or small business owner, you have to be smart with the resources you have.

Oftentimes, traditional marketing doesn’t exactly fall within your budget. That’s why social media is a great alternative in generating the results you want to achieve.

It’s not only low-cost, but it also gives you direct exposure to current and prospective customers

So, you’ve formed your business and want to start marketing through social media. Now what?

Here are a couple tips to think about when creating your profile:

Start with a Social Media Strategy

Even before selecting which channels you’ll use, you need a detailed strategy that will keep your marketing efforts on track. The first step is to figure out how you want to portray your brand. For best results, align your social media approach with your company culture and make sure it addresses your business goals and audience needs. Always strive to establish your brand’s own identity on social media so that your company can stand out among its competitors.

Choose the Right Social Networks

There are many different social media platforms to choose from today – Facebook, Twitter, LinkedIn, Instagram – and depending on your strategy, you should be able to determine which ones are right for your startup. Look specifically at the target age group of your audience, the location of your business and the nature of your services when making the decision. One last tip: keep social media profiles limited to a couple of networking platforms. This way, you can easily monitor them, keep them up-to-date and interact with your followers more closely.

Build a Community

For long-term growth and success, the best thing you can do is build an online community of supporters who give your startup additional exposure and promote brand awareness. You can do this simply through personal interaction, relationship development and customer satisfaction. In general, customers greatly appreciate companies that put in effort to engage with their followers and connect with their audience.

Listen Instead of Talking

The biggest mistake you can make on social media is not listening to your followers. When used correctly, social media platforms allow you to garner valuable feedback. Respond to comments, mentions and feedback even if they’re negative. Social listening is an excellent tactic to monitor what people are saying about your brand.

Experiment

Sure, going the traditional route in terms of strategy is great, but every now and then, it’s great to think outside the box – as long as what you’re doing doesn’t compromise your brand’s integrity. Being creative and innovative will generate new ideas and develop the mindset you’ll need to resolve any problems later on.

Evaluate your social media strategy regularly

Startup companies can get overwhelmed by the fast pace and growth, but it’s important to take a step back every now and then to measure and analyze your results. Tracking performance data, such as growth, engagement and sharing, is the best way to identify which tactics are working and which ones aren’t. Things change with time and social media is no different. Therefore, it’s important to assess your startup’s social media business plan regularly to figure out the strengths and weaknesses of your profiles.

A Few Last Words

Social media takes time and energy, so don’t be disappointed if the results you want don’t automatically unfold. Be patient and devote the appropriate amount of work into each account. With time, your profile will reap the benefits of company visibility and audience engagement, which eventually leads to paying customers and investors.

If you have a question about social media for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Crowdfunding For Equity: Title III and Equity Crowd Funding 101

Business Plans and Crowdfunding

Crowdfunding For Equity: Title III and Equity Crowd Funding 101

What is Equity Crowdfunding?

Equity crowdfunding is on the rise after the signing of the Jumpstart Our Business Startups (JOBS) Act was signed by President Obama in April 2012.

Simply put, it is a type of crowdfunding that enables broad groups of investors to fund startup companies and small businesses in return for equity.

Three years after the JOBS Act was initially passed, Title IV (Regulation A+) went into effect, allowing larger companies to accept capital from both accredited investors (the wealthiest 2% of Americans) and non-accredited investors (the other 98% of Americans). This expanded when Title III (Regulation CF) was enacted in October 2015, which also allowed early stage companies to accept capital from both accredited and non-accredited investors.

More About Title III (Reg CF)

Title III allows startups and small businesses to raise up to $1M from the general public – an unprecedented way to raise capital. More specifically, investors who have less than $100,000 in both income and net worth may invest at least $2,000 per year, and as much as 5 percent of their income or net worth (whichever is less) per year.

Investors whose income or net worth is greater than $100,000 may invest up to 10 percent of their income or net worth (whichever is less) per year.

Thus, Title III gives companies that are historically underserved by the current capital markets an equal opportunity to equity financing.

On May 16th, Title III will officially go into effect.

Process

Choosing a Funding Portal

Under Title III, companies must use an online intermediary (either a broker-
dealer or crowdfunding portal registered with the SEC and FINRA), to facilitate a
fundraise. Experienced portals with a deep understanding of the regulations
surrounding Reg CF can help ensure that their campaigns are compliant with SEC rules.

Filing a Form C

Companies raising under Title III do not need to get SEC approval to initiate their
raise. They must, however, prepare a Form C and file it with the SEC 21 days prior to launching an offering. This form includes basic information about the company, its employees and the terms of the raise.

Disclosure Requirements – Financial Information

In addition to Form C, necessary financial information will depend on the size of
the intended investment needs:

 Under $100k – Internal financial statement review

 $100k-500k – CPA reviewed financial statements

 500k-1M – 3rd Party audited financial statements

 1st time crowdfunding issuers offering more than $500,000 would be permitted to provide reviewed, rather than audited, financial statements.

 Disclosure Requirements – Ongoing Reporting

Providing progress reports not only build trust with investors and keep them informed, but they’re also a very much required part of the disclosure requirements. Upon the successful closure of your campaign, you will be required to provide ongoing updates to your investors in the form of an annual report, which will include similar information that was included on the Form C.

In summary, what are the benefits and pitfalls of Title III?

Benefits:

 Title III can be an efficient way to quickly startups raise capital from the crowd

 More investors equate to more supporters in your startup

 Reporting requirements give founders and investors an opportunity to

Pitfalls:

 Current statutory disclosure obligations and costs are overly burdensome

 Legal and accounting fees may be higher than traditional capital-raising

 Title III does not include a “testing the waters” provision (like Reg A+ maintain a more open and transparent dialogue methods does) so that issuers can gauge interest before incurring burdensome filing and preparation costs

Remember, Regulation CF will become effective 180 days after the final rules are published in
the Federal Register on May 16, 2016.

If you have a question about your equity crowdfunding for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Top 8 Success Tips For First Time Founders

Top 8 Success Tips For First Time Founders

As a Startup entrepreneur it’s easy for your work to become your life, and 8 years to effortlessly slip by.

I founded what has become The Startup Garage in January of 2008 with passion for helping entrepreneurs start and launch companies of impact.

Our business, team, and services have evolved, transformed, and changed many times over. Yet, throughout the years the fears, issues, and struggles seen amongst first time founders have remained the same.

As a Startup founder, regardless of where you are geographically or financially, there appears to be common threads, and snags all of us face at one point or another along the journey.

In 8 years of service, The Startup Garage, has helped over 200 companies, non-profits, social enterprises, find success. In celebration of our 8 year anniversary, I’d like to share with you.

My Top 8 Success Tips:

Startups take time. Create a plan that avoids too much false or unnecessary urgency.

Having a false sense of urgency can keep us from putting our energy into the right things at the right time. It’s true, success doesn’t just happen, it requires careful, detailed planning and action. Be sure to enlist the help of business plans, checklists and project management platforms, to prioritize and stick with daily, weekly, monthly, and annual goals.

Don’t focus too much on the product/service. Balance your focus.

All to often entrepreneurs become so excited over their product or service, that they get lost in their own enthusiasm. The core of the business might be the problem the product solves. But, it’s imperative to give equal weight to other key comments of the business like, the team, the marketing strategy, business model and customer feedback.

There is plenty of investor money out there for companies who reach the milestones investors care about. Know what investors care about and focus on that.

Remember as an entrepreneur your perspective and mindset, often times differs from that of an investor. We’ve designed a helpful infographic here>> Achieve Investor Milestones
to keep you visually in tune with achieving the milestones investors care about, to communicate with them in a language they understand.

Founders are the biggest problem for most startups. Get out of your own way.

We call this the founder’s dilemma, and it’s a big one. Founders don’t let go easy, surrendering control, delegating tasks, and learning to be a leader rather than a micro-manager can take time. Recognize the dilemma and start delegating tasks even if it feels uncomfortable.

Healthy founders leads to healthy startups.

Founders are the core of a business inspiration, motivation, and success starts with you, then ripples out to the organization at large. Your business is your responsibility, treat it with care by caring for your health and well-being. To be efficient and firing at a high caliber it’s essential to embrace a healthy physical routine, and check in with your mental state. Moderation is key, working non-stop leads to startup burnout, and doesn’t help anyone within your startup.

Know your exit strategy.

Knowing your end game, makes every decision easier. Having clarity on on your exit plan, whether it’s not exiting, Merger & Acquisition, or IPO affects how you run your business day to day.

Planning is critical

The lifecycle of you startup depends upon planning, documenting, and communicating even the most mundane tasks.

Take on the student role and always be learning.

The smartest founders, are the ones that don’t know all the answers. Being a lifetime learner, evokes greater innovation and creativity. Knowledge is power and will help increase awareness of the world around you.

If you have a question about your raising capital for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Why To Take Caution With Investor “Finders”

Why To Take Caution With Investor “Finders”

There are many service providers that offer to help startups with attracting investors, colloquially referred to as “finders.”

While they prefer to be called business brokers or consultants, most finders are either CPAs, insurance brokers, retired executives, or former entrepreneurs. They mostly operate in the Angel landscape, targeting deals between $100K to $2M.

Typically, they will either require a large retainer, an upfront fee, a percentage of capital raised, or some combination of all three.

The service they provide ranges from screening investors and setup meetings to developing a list of high-net-worth prospects for entrepreneurs to call on.

Unfortunately, there is a lot of controversy when working with finders. First, a sizeable majority of finders are not actually licensed as a securities broker by FINRA and are therefore in violation of federal and state security laws, whether they know it or not. Second, many finders are not capable of delivering on their promises or simply disappear as soon as you hand them a retainer check.

How This Affects You:

The issue that Startups face when working with unlicensed finders is that their legal problems can quickly spread to the startup as well. Payments to an unlawful finders can cause an entire transaction to violate securities law, giving investors a right to undo the deal as well as sue the Startup for damages.

Even if an investor does not undo the deal, these unlawful transactions can come back to haunt the company if and when the company decides to sell or go public as it may be forced to disclose the violations, thereby jeopardizing the pending deal. On the other hand, working with less than honest finders will clearly be a waste of time and money.

Advice:

Retain a good corporate securities attorney before you engage with a finder. Your securities attorney should be able to:

A) help you understand the full scope of risk of using finders in financing transactions.

B) help you verify that your potential finder is licensed with FINRA and your local state’s regulators.

C) ensure that your finder does not have any substantial complaints against them.

If you have a question about raising capital for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Want to Join The Startup Garage For FREE at Launch Festival in San Francisco?

Want to Join The Startup Garage For FREE at Launch Festival in San Francisco?

The Launch Festival in San Francisco is March 2-4th 2016.

The Event promises to be the greatest startup conference in the world, with 15,000 attendees, 4 stages, and 250 top notch speakers.

All with the mission to help founders build, scale, and secure funding.

“This whole festival is a celebration of entrepreneurship,” said angel investor Jason Calacanis, who has organized Launch Festival events for eight years now.

The Startup Garage loves what Launch Festival is doing and have heard countless success stories of previous attendees. “This is very good for us start-ups to meet both potential customers, potential partners and potential investors. And it’s also getting the media exposure, being on stage,” said Dr. Alexander Borve, co-founder and CEO of First Derm

We excited to offer you our friends and founders FREE passes to the event, as a way to support and inspire innovation. Simple Go to launchfestival.com/thestartupgarage to claim your free pass.

Ready to not just attend but also take the stage?
If you’d like to debut your Startup Idea on stage in front of their 15,000 founders, entrepreneurs, investors, and tech enthusiasts?
Go to launchfestival.com/competition to apply for the LAUNCH competition.

The winner receives a $200k investment from Jason Calacanis and a slot in the LAUNCH Incubator.

They will also be holding the LAUNCH Hackathon (with 15K hackers and $1M+ in prizes) on February 26-28. You can apply HERE. 250 teams of four will spend 48 hours creating a company, with the top seven making it to the main stage of the LAUNCH Festival on Friday where they will be given two minutes to show their creations before a grilling from our judges!

San Francisco, the city by the bay, is an entrepreneurial hotspot, this monumental 3 day event is sure to put some stretch marks on your brain and business.

If you’ll be attending please connect with us @Startup_garage on Twitter!

Tweet “See you at #LaunchFestival SF @Startup_garage”

We’d love to say hello in person.

How To Understand Customer Lifetime Value and Customer Acquisition Costs?

How To Understand Customer Lifetime Value and Customer Acquisition Costs?

The Key to Profitability for your business

Understanding customer lifetime value and customer acquisition costs.

It comes as no surprise that a company must earn more revenue over the lifetime of any given customer (referred to as Customer Lifetime Value or CLTV) than it costs to acquire the customer (referred to as Customer Acquisition Cost or CAC).

While there are additional overhead and operating expenses that affect profitability, the first step in building a profitable business is to implement a scalable business model where your Customer Acquisition Cost is lower than your Customer Lifetime Value.

In theory, this seems rather obvious. However, putting this concept into practice can be difficult as your CLTV and CAC aren’t always extremely apparent. Additionally, it takes seasoned marketers and business leaders who understand how retention rates, sales & marketing channels, and business models affect

CLTV and CAC.

In this blog I’ll be discussing the factors that affect CLTV and CAC as well as strategies for increasing CLTV and reducing CAC. While much of what’s presented below is generally true across most industries, there are certainly caveats for every industry and business model.

Customer Lifetime Value

Before we discuss strategies for increasing CLTV, let’s wrap our heads around what CLTV is and how it is calculated. In its simplest form, CLTV is a prediction of the net profit attributed to the entire future relationship with a customer. CLTV is calculated by forecasting the average customer lifetime (the number of months the customer purchases your product), the average monthly spend of your customers, and the average monthly cost of distributing your products.

As a result, you can increase your CLTV by:

1) increasing the average monthly spend
2) increasing the average customer lifetime
3) decreasing the cost of distributing your product.

Increasing Average Monthly Spend Per Customer

The most immediate way to increase your average monthly spend is to increase your price. However, an increase in price will often lead to either a reduction in conversion rates (the number of total customers) or a reduction in retention rates (the number of repeat purchases from a given customer).

You don’t want to increase your average monthly spend only to decrease the total number of customers or the average customer lifetime.

You can also increase the average monthly spend through upselling and cross-selling techniques. Think of Amazon suggesting additional products and services bought by other customers looking at the same item. Additionally, you can implement increase average monthly spend by implementing loyalty programs, improving conversion rates through website optimization, and streamlining the sales process.

Increasing Average Customer Lifetime

CLTV can also be increased by improving retention rates, or the percentage of customers that remain customers over time. Companies with low retention rates are required to draw the majority of their profits from just one purchase per customer while companies with high retention rates benefit from spreading their CLTV over numerous purchases.

Retention rates can be increased by improving customer satisfaction through strategies such as customer service and support centers, sending periodic discounts and promotions, offering loyalty programs, and enhancing the overall customer experience.

Decreasing the Cost of Distribution and Fulfillment

Every business’ cost structure will vary but some of the more common ways to decrease the cost of distribution and fulfillment include: purchasing inventory in larger amounts, utilizing cheaper vendors and suppliers, substituting lower cost materials, decreasing base salaries and increasing commissions, utilizing independent reps over in-house reps, and reducing waste.

Customer Acquisition Cost

Developing a business model that results in a low CAC and that is scalable is difficult and where many startup businesses fail. In a world of data overload, it is challenging to attract and successfully sell products and services to people that have never heard of you. Every product and service is different, but for most companies the customer goes through several stages before making a purchase.

First, they have to become aware of your product or service through PR, advertisements, word of mouth, social media, reviews and blogs, etc. Next, they often need to be courted by sales reps and go through some sort of on boarding process.

This process from start to finish can be costly. Naturally, you have options as to how you allocate your marketing and customer acquisition dollars. Strategies such as SEO are typically low cost but usually don’t offer a strong degree of control, targeting, and results. Unlike strategies such as direct sales which are typically very costly but come with a strong degree of control, targeting, and results.

It is important for businesses to research standards in their industry and then benchmark themselves against those standards in order to pick the appropriate channel mix for their business. Additionally, companies can get creative with low cost channels that will help to reduce the average CAC across all channels.

For example, referral and word of mouth programs (such as business that offer one month free for every 10 friends referred) are a great way to acquire new customers at very low costs. While you cannot rely on these strategies exclusively, they will help reduce the average CAC across all strategies.

Optimizing the CAC and CLTV ratio is crucial to the success of any business. The earlier the business can figure out the right mix the sooner they can begin scaling in a profitable way.

Here at The Startup Garage, we help entrepreneurs devise the appropriate business models and sales and marketing strategies that will enable them to scale a profitable business. Contact us to learn more.

Ready to win over $10,000 in Prizes for your Brilliant Business Idea?

Ready to win over $10,000 in Prizes for your Brilliant Business Idea?

The Startup Garage is excited to co-sponsor in “The Ideator December Challenge.”
A challenge designed to bring your business idea into conception.

Submissions currently open now until Dec 13, 2015 at 5pm (PST) entering is easy and done completely virtually.

Enter here today >>>December Challenge Idea Competition

The winner will be walking with $10,00 plus advisor board access, key mentorships, investor relationships, and specialized tools and resources from challenge sponsors:

SalesForce.Org
box.Org
Google
Pledge 1%
Crunchbase
Nasdaq Entrepreneurial Center
BandofAngels
LegalZoom
Perkinscoie
Listhunt
SplashU

All ideas at any stage are welcome, this challenge is designed to bring your idea to life!
Judges are looking for the biggest idea with the best-defined roadmap to success.

The Top 5 idea will be notified on December 14th and selected to pitch in the finals on December 15th at 5pm PST.

5 questions to answer when entering to optimize your pitch are:

How big of a problem does the product solve?
How well does the product solve the problem?
How well do the docs, if any, support the idea?
How has collaboration helped the idea?
Do the goals and tasks adequately outline a roadmap to success?

Remember to structure your pitch in a colorful story with a beginning, middle, and end.
Let your personality shine through without being too salesy, vague, or abstract.

Ideator was created to foster global innovation and entrepreneurship, while also making them easier.
The Startup Garage Team, know’s it’s ideas like yours that continue to shift the landscape of business innovation.

We look forward to hearing your ideas and helping launch them to the world!

How To Measure and Achieve Product/Market Fit

TSG_ProductMarket from The Startup Garage

How To Measure and Achieve Product/Market Fit

Product/Market Fit is a term that was coined to define the process of creating a product that resonates
with a specific target market(s).

Taking this definition a step further, Product/Market Fit is proving sufficient demand within a target market segment to justify the spending of capital (human and financial) in order to begin scaling the company.

The definition of Product/Market Fit is fairly straight forward, achieving it is far more abstract.

How do you know when you’ve achieved Product/Market Fit?

When do you transition from a bootstrapped startup focusing all your resources on product development to an accelerated startup that is ready to begin scaling?

Answering these questions correctly can be the make or break for any young company.
Most startups don’t get second chances to scale the business, so timing is everything.
As a result, it is crucial to start measuring Product/Market Fit as early as possibly, to measure it often, and to continually fine-tune your product until you’ve gotten it right before you consider scaling.

Measuring Product/Market Fit is a bit of an art and a science. On the one hand, you can feel when Product/Market Fit is or isn’t happening.

Answering some of the following questions can help you assess the Product/Market Fit Feeling

– Are you getting new customers with little to no marketing strictly through word of mouth?

– Does your sales cycle take too long?

– Are your conversion rates above/below industry standard?

– Are you getting exciting press reviews and interviews?

– Are you struggling with holding sufficient inventory?

– Do you need additional sales and customer support staff to satisfy new customers?

On the other hand, you can use data from customer surveys as a way to measure Product/Market Fit.
Essentially, you are gathering information that will allow you to gauge how much value your customers are getting from the product and how disappointed they would be without having access to your product.

If half of your customers or more could live without your product then it is a safe bet that you haven’t achieved Product/Market Fit (disclaimer: this benchmark will vary from industry to industry based on average churn rates, customer lifetime, customer lifetime value, cost to acquire new customers, etc).

Achieving Product/Market Fit

Once you’ve achieved Product/Market Fit, you are ready to begin scaling the business. In order to scale,
you need to implement a business model that allows you to acquire customers at a profit while still
delivering on the customer benefits and value that got you here in the first place. Continue to test and
tweak your business model until you’ve developed a well-optimized and scalable customer acquisition
process.

Then, you are ready to pour gasoline (sales and marketing dollars) on the fire (a startup with
proven Product/Market Fit and business model).

Taking the time to fine-tune your product until you’ve achieved Product/Market Fit will greatly improve
your likelihood of strong conversion rates and successfully scaling the business. It will also allow you to
reach scale with less capital (giving up far less equity in the meantime).

If you have a question about your Startup business idea or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!