3 steps to validate your business idea

3 Steps to Validate Your Business Idea

After my last post, Quit your job or start a business on the side, which is best?, I received a lot of questions from people about the steps in between. i.e. When you have what you think is a great idea for a business, but you're not yet sure if it is a winner. How can you validate your business idea? 

Validating your idea is an important step when launching a business. You don't want to quit your job or put a ton of money into something only to find out that the market is already saturated or that there is no demand for your idea. So i've put together 3 steps to help you validate your idea.

 

3 steps to validate your business idea:

STEP 1: DO A GOOGLE SEARCH

Yes I know, this step seems obvious. But it's easy to get caught up in our ideas and forget to research the market. Find out if your idea already exists. Don't stress if it does because this means your idea is already validated. Now you need to establish your point of difference and if there is room for your business in the market. 

If you can't find anything similar, then kudos to you! But it's still important to follow the rest of these steps. Perhaps there is a good reason why no one else is doing it.

 

STEP 2: ASK FRIENDS AND FAMILY FOR FEEDBACK

Often when people have a business idea, they are afraid to tell anyone for fear that the idea will be 'stolen' from them. This is silly and the chances of your idea being 'stolen' are next to none. An idea is just that, an idea. A lot of people think that to be a successful entrepreneur you just need that magical idea. Well I hate to break it to those people but there is a lot more to it than that. Even if your idea is brilliant, you still need to execute and market it which will require a lot of your resources, the most important of which is your time. Who would want to do this unless they were passionate about the idea? And do you think any of your friends or family would be so passionate as to 'steal' your idea? It's not going to happen.

This is what will happen: You will receive feedback, suggestions and possibly contacts or potential customers. The more people that know, the better! Use all the feedback you receive constructively to help validate your idea.

 

STEP 3: ASK YOUR POTENTIAL CUSTOMERS

It's never too early to start selling to your customers. Save yourself the time, money and frustration from creating something that nobody wants to buy. First take the time to ask them if they actually want your product or service.

Did you know that Bill Gates sold his programming language, BASIC, before it had even been written? After coming across an ad about a new computer in a magazine, he called up the company and asked if they wanted to buy the programming language he had written for it (which he hadn't even written yet!). They accepted and he set to work writing it. This is the mind of an entrepreneur. Always validate your idea by asking your potential customers first.

So how can you do this?

Selling Business to Business

If you are selling business to business, then call your potential clients directly and ask them. There is no reason why you can't do what Bill Gates did. In fact, you have a much greater advantage than him already, you have the internet. Use LinkedIn to search for contacts, do your research on them and find out what they need.

Selling Business to Consumer

Whether you are selling a physical product, a service or an app, creating a landing page and running some pay-per-click ads is a great way to validate your idea. I'll take you through each step below quickly and explain the tools you'll need to set this process up. 

1. Create a Landing Page

Lead Pages is are great tool to use that will allow you to create a landing page quickly, without having to know any code. On this page you want to give a brief description of what your company does and provide a sign up form. If you are selling a product, hire someone on Freelancer or Fiverr to design a rendering and include this on your landing page.

 

2. Create and run a pay-per-click ad

Set up a Facebook ad that targets people based on interests, demographics and behaviors. With a budget of as little as $5 a day you will get an idea pretty quickly if there is any interest in your offering. If you do gain a lot of interest, you would have already established a list of potential customers to connect with once your offering is established. If not, all you've lost is a little bit of time and around $50.

p.s. In future blog posts I will dive more deeply into setting up Facebook, Instagram and Google Adwords campaigns. Join our closed Facebook group here to be notified when new blog posts are published. If you need assistance with this sooner, feel free to shoot me an email at hello@myentrepreneurlife.com.