Unsure If Your Biz Idea Is Good?
Let’s get straight to the point…
You can have the best idea and all the money you need to start, and still fail! It happens every day. But chances are you're not in a position to blow a bag of money on a failed idea.
On the flip side, you can have a ridiculous idea and no money, yet be widely successful. This doesn't happen as often as the above scenario, but it has happened in the history of entrepreneurship. However, the chances of succeeding with all odds stacked against you are nill.
Ideally, you want, and should take, the safer more assured path. The path that confirms your business idea has the potential to be successful.
PURPOSE OF VALIDATING
Validating your business idea is based on its buying market. Take the time to answer these essential questions, and put your new business on a path to success:
Is there a buying market that wants or needs what I'm selling?
How large is my buying market?
What are the potential sales my new business could generate?
Who are my competitors, and how much do they generate in sales?
When doing traditional market research, no amount of data can tell you exactly how well your business will do, for two key reasons:
First, it is based on assumptions. In other words, guessing. Assumptions happen a lot in the business world. One can assume a business will do well, or not, based on industry history.
Secondly, it depends on you. As the Entrepreneur, you are the orchestrator and determining factor to the success of the business.
These two truths remind me of a quote that says:
It’s true!
A great solution considers the product and the customer.
It's true. And much of business success is trial and error primarily because you need the right solutions, at the right time, with the right efforts, selling to the right market. If these steps are not working in harmony, there will be struggles in your business.
HOW TO VALIDATE YOUR BUSINESS IDEA
The method you choose largely depends on the type of business you are starting. Choose the method that connects with your audience, this will give you the realistic feedback you need to know.
Consider these methods of validation:
MARKET RESEARCH - this traditional method requires the use of market data reports gathered every 2 to 10 years. While these reports are in-depth, they are also very expensive and possibly outdated at the time you need them.
However, there are free university studies that are easy to find online. While these reports are the most current in comparison, there is no guarantee that your industry has been studied in the current year. Other the other hand, you can always ask students to choose your industry for their report. Talk to the professor at your local university.
PROTOTYPE - this common method requires a little time and money, yet the feedback is probably the most reliable. Creating a prototype, or at least the ability to show products in some way is as close as you can get to the real thing. You can survey your customers’ interest by listing the product "for sale" on your website, showing the prototype at tradeshows, or by other methods. If there is an interest then you know you can invest your time and money to bring it to market.
AUDIENCE - this reverse method is ideal for active businesses with a customer base and social media with a focused following. When you are already in business it is easy to introduce something new to your customers.
When you have a focused social media following you want to introduce products and services related to the focus. For example, NOBOSS creates content focused on entrepreneurship and starting a business. Therefore, introducing a new spreadsheet, tool, or resource for entrepreneurs would be appropriate.
The only way to know if your business idea is a great solution is to validate it. Get the facts from your customer base or focused audience. This will save you time and money, and also guide you to the paying customers that want and need what you sell.
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