How do I know if my Business idea will be successful?
It could be a new product or service you want to offer in your business, or the entire business model itself- the key is to validate the idea and make sure it will be profitable before investing your time and money.
Here are 10 ways you can validate your ideas before you take on any risk.
1. Does it have a clearly defined route to making money?
Yes. This matters. It’s difficult to raise money for a start-up that doesn’t prove the clear route to make money.
And let’s just say for the sake of argument that you don’t need financial backing to get started. If you cannot clearly define (and I mean clearly) how you will make money at this, then it is not wise for you to follow this dream. If you don't need to make money at this venture, then it's a hobby, not a business, and you should treat it as such. But if it's a business, then it's going to need to make money, and you need to know in advance how that is going to happen.
2. Use Facebook to test your market size.
Say you wanted to start an organic gardening centre in Gauteng, but you aren't sure of how to assess what the size for interested people is?
Use the ad manager to select people in Gauteng who are interested in gardening between the ages of 25-60.
That’s ALOT of people right there. I’d say that’s a market.
(If you want to know more about using Facebook ads, then I’d recommend taking an online course. I’m a fan of paying for the information I need that will help me run a successful business. Free advice is great, but the expert advice that requires payment always brings best results)
3. Does it fill a Gap in the market?
If you know the market is there and your idea is sound, you have to ask yourself if you can fill a need. Think about what makes you unique, and the special spin you put on your business that sets it apart.
Ask yourself this question, "What is unique about me and my business idea that sets me apart from the other businesses like mine?"
Can’t answer this question? Then you’ll likely get lost in a sea of other people who are already meeting the need your business aims to supply.
4. Hire an (expert) brain to pick
Find an expert in the area in which you hope to build your business. Want to make handmade grass skirts? Want to launch an online business? Find an expert to walk with you through the process.
Hire a strategist to give you honest feedback, rip your idea apart and look for any holes you do not see yet. I have worked with so many clients who end up thanking me (after they’ve called me a few names!) for helping them see that their ideas just weren’t ready for the light of day.
It will hurt, but it will be worth it. Hire a brain to pick.
Click here to apply for business coaching with me.
5. Hold a focus group
A focus group is a group of people who would likely be your potential customers. You can find them any place you connect with people. (Social Media, book clubs, small groups, business networks, etc.)
Note- Do not use your friends or family for this unless they are people who would be in your potential customer base (and even then, use them sparingly) It's impossible for your friends and family to give unbiased feedback.
6. Have you floated the concept or idea on Social networks to see if you get a response?
Test it in a Linkedin group, see if your post gets any likes on Facebook or RTs on Twitter.
7. Use Adwords
Build a quick and easy landing page for your business idea and then buy different versions of keywords from Google Adwords.
Have an email signup box to test how interested the potential customers are in your idea. If you get a lot of sign-ups, you know you’re on to something.
8. Try a Feedback Service
With the rise of online businesses, more and more entrepreneurs are using feedback services to help them test their ideas.