Chapter 8: How To Test Your Business Idea
Few things are as exhilarating as a business idea conceived in the mind, either as a result of deliberate brainstorming, or as a spontaneous occurrence in the spur of the moment. More often than not, it is during such moments that we become overwhelmed with excitement and get into a state of reverie, building castles in the air about how the business idea we’ve just conceived is going to turn into a lucrative multi billion business, which in turn will enable us to buy that private jet we’ve always dreamt of.
The largest section of Fortune 500 companies started of as mere ideas. Business ideas are hard to came across and your idea may be the next successful multi-national corporation. The simple business idea should be proven before execution as hardly all entrepreneurs succeed in the market.
So without wasting any time, we quickly pool our resources and embark on the inception of the business, only for our highly esteemed business idea to turn into a sheer debacle. Most people overlook the need for testing their business idea so as to ascertain its viability in the market environment. Others fail to test their business idea due to ignorance. It is due to such disregarding attitudes that most businesses fail even before they’ve started to operate, or shortly thereafter. Thus, it is of utmost importance for entrepreneurs to familiarize themselves with the concept of testing their business ideas because it could mean the difference between a successful business and a fiasco.
An idea may appeal to you but will it eventually satisfy the market? At this point it is pertinent to ask what business idea testing is and what it entails. Business idea testing is a process involving in-depth examination and analysis of the idea against relevant factors so as to assess the risks involved, determine the feasibility and consequent success of the idea in the business environment. There are several methods of testing a business idea. However, before considering these methods, it is prudent to assess certain aspects of the intended business. For instance, right after conceiving the idea you may well consider competitor activities within the business environment.
This may be achieved through carrying out research with the aim of finding out whether you have any competitors and whether the product or service that you are offering is similar to theirs. Equipped with this information, you’ll be in a better position to establish whether you should abandon the business idea, or improve the product to be superior in quality and outclass your competitors.
Another important consideration is your market niche. By determining who the target audience is, you will be able to make informed choices on how to best tailor the product or service according to the needs of the target customers.
Let’s explore this detailed checklist to confirm if you should execute your idea, change it or even forget it. This are the five steps of how to test your idea.
- Is there any similar product or service?
I remember my friend had an awesome idea. She wanted to transport the college students to an event. An hour had hardly passed before she was greatly discouraged due to the number of transport companies specializing in events.
In most cases ideas are usually thought out by another creative person or company. Try to Google a simple keyword that explains your idea. Search your idea on YouTube. Which forms of the idea is it implemented? How different is your idea from the rest?
If your idea is exactly similar as an already functioning product or service, please don’t continue implementing the idea but try your best to change it. These types of ideas may later spring up legal issues which may probably occur after successful launch of your product or service.
For a unique idea note down how the idea will help the market. Does it offer better service or a more quality product? If the answer is yes, it’s time to move to the next step.
2.What is the public’s view towards your idea?
A few years back Roslin Institute cloned a sheep, the unforgettable Dolly. This action raised hopes that humans may be successfully cloned. The public kept complaining on this grave matter. Scientists saw it as progress, the public declared it unethical and several protests created enough attention to stop any attempts.
All entrepreneurs believe in themselves and they assume all their ideas are great and awesome. Truth be told, some ideas repel the consumers rather than appeal to them. Seek the most trustworthy group of friends or even family members to give you their response on the idea. Ask for honest answers and avoid flattery or exaggerated responses.
If everyone refuses and rejects your idea, the idea demands transformation. Transformation may require only slight change of the idea. Effectiveness of these is well expressed by a certain South African designer who only dyed his collection black and sold every piece of garment he had, after his royal customers rejected the same white clothes.
Ideas that have received a substantial level of acceptance should be allowed to be verified in the following section.
3.Is the prototype working?
Now it’s the perfect time to build a Minimum Viable Product(MVP). Don’t be scared of this word, thinking that I am referring to inventions, it’s just a term to label this stage of your business idea. This is a prototype that will be used to test the functionality of your product. Eric Ries describes an MVP as that product that allows maximum learning about the customer at very minimum effort. The MVP will thus be the real test of your idea using real objects.
For technical ideas such as creating mobile apps you may build a Facebook page and a short video describing how the app works to save time if the project requires long period of time to complete. Non tech ideas require a real sample. The sample should be working and be given freely to consumers. For consultation or courses business idea, you can create a simple landing page.
The concept is that you create a website or a simplified version of a website such as a landing page, and display the products that you are offering. When the prospective client clicks on the product to buy it, they receive a message informing them that the product is currently unavailable, but that they can leave their personal details and once the product becomes available for purchase they shall be informed. You are left with a representation of the product’s demand. If consumers are actually ready and willing to spend cash on your product, you can conclude from your business idea testing that your business idea is something to pursue even further.
There are multiple landing page builders platforms that you can use instead of purchasing your own web hosting, and design a full website. Most of these landing page builders offer WYSIWYG editor, a simple drag and drop where you can design simple, easy and effective landing page. These landing pages platforms also provide email marketing essentials where you can collect your prospects email address and provide a small drip campaign to inform them of where you are or tease them with a few concepts of your business idea. We will go through the structure and the nuts and bolts later in this book to help you create amazing email marketing funnels to engage with your prospects.
Once you have identified potential clients for your product, engage them and use their brutal honesty to gauge your product. You can obtain such feedback through one on one interviews, questionnaires, direct surveys and online surveys.
Prototypes should be non profit and be aimed to collect the customers feedback. If a large number of customers pose negative feedback it’s advisable to start over and build the product according to the customers expectations. Good feedback illustrates that the customers are satisfied and the idea is awesome.
4.Is there a demand?
Great ideas solve issues in the society. Several problems result to demand of certain products and services. Several amenities are a must have and result to a great market.
With the now advanced technology verifying the level of demand is easy. To test if your idea has the desired demand first create a coming soon page. This is a landing web page that expresses the business idea as an already established idea. These page should enable you to verify how many people actually view the web page. The number of views is directly proportional to the demand thus high web page view high demand.
Creating a Google AdWords campaign on the keyword that well represent your product. Ads ensure reaching the consumer at their time of need and the higher the number of ads clicked the higher the demand. Utilizing Facebook ads may also help register the desired outcome. While you do need to have a budget, you can easily start this with $5 to $20 a day to truly understand the demand of your product. If you are trying to reason yourself of not spending a dime, let me help you.
Ideas in high demand should be implemented as chances of success is high. Low demand dictates time for converting the idea to solve the customers’ most troublesome issues.
5.How many clients can you get?
After comfortable product production obtaining royal consumers should be implemented. Getting your first clients is challenging but it can be achieved by the following ways.
-Offer a free starter service.
At first clients may end up not spending on the idea. Giving them a free and great experiences triggers their urge to spend to continue enjoying the services.
-Reach out to competitors
Teaming up with competitors will end up ensuring you obtain their surplus market. Serving this ready market increases the chances of getting the first clients.
-Get involved with your network
In most businesses the first clients were immediate family members or friends. These group of people may offer the first clients.
Getting clients ensures that the business idea is actually working. Obtaining royal customers implies that the business idea should be maintained while lack of clients after tough attempts to dictate the exhibits that the business idea should be discarded.
Your idea should pass all the steps to ensure it will serve the market well. These steps are however independent of each other and arguably obtaining a client is the best validation method.
Ideas are greatly increasing and passing today’s test doesn’t confirm relevance of the idea to the future market. Ideas should thus be gauged after a certain period of time as technology advances and constant revolution of a product will ensure it retains its place in the market. For ideas that failed the validation list starting over is cheaper than changing it