What Is Business Traction? What does traction in business mean?

Traction, for a start-up, is the measure of how well the business model is being accepted by its target market. Enough traction means that you have more than just an idea, that you have put your vision into motion and that you have customers/ users who support your business. Traction is the life blood of the business! One of the formulas to a great pitch to a potential investor always includes traction. Showing potential investors that you have “enough traction” is the most persuasive evidence that your business is worth investing in. Some investors will even come to say that nobody will finance a start-up business without traction. Having a demand for the product or service that your business is offering that is translated to sales is an irrefutable proof that your business has traction. Other measures of traction, aside from actual sales, are letters of intent or the growing number of visitors in your website.

Ultimately, an entrepreneur needs to ensure that the product or service that he is developing answers a need of the market. If there is a product-market fit then it’s from there that the business gains traction. However, despite this, a business can still fail to gain traction. The most common reason for this is simply the lack of awareness among potential customers of the product or the company’s existence. Nowadays, to gain traction, an entrepreneur not only has to make sure that he is answering a need but he also has to compete for people’s attention and let them know that his product exists.

How much traction is enough for Investors?

There are no hard and fast rules on just how much traction is enough to encourage an investor to finance your business. Generally, the more traction the business has, the better, as this improves the strength of your negotiating terms for investment as well as the success of your business.

Marketing activities that will build traction should be included in an entrepreneurs’ business plan. These activities are meant to keep your business moving forward— from formation, building your team, introducing your product to the market, attracting customers, to continually developing your product. However, all of these already assume that the product is, first and foremost,answering a real market need. In reaching out to the market, an entrepreneur must also make sure that he is communicating to the right market. Otherwise, it would be like advertising a dairy product to a lactose-intolerant market.

At the start of your business, the best sign that you are gaining business is the rate of your customer acquisition. If you are not seeing growth then you need to re-evaluate how you are doing things. Do you need to invest more in marketing? Do you need to do market research or competitive analysis? It is important to maintain your vision of the business but there are some circumstances that might require you to re-asses your plans while still retaining your business vision.