Do you have a great business idea that you want to turn into a profitable business?
But really don’t know where to start? Don’t worry! You are not alone!
I know it can be overwhelming to even think about all of the activities that need to happen to get your business idea off the ground. But when you break down all of the activities in smaller building blocks, it is not as scary as it may seem.
There are a lot of reasons that business ideas don’t get off the ground, but the biggest reason is that people don’t test to see whether customers even want their product or service.
So they spend a lot of time, money, and resources on building their business, only to find out later that nobody wants to buy.
So if you really want to take your idea and build a profitable business out of it, the most important thing for you to do is to validate that people are interested in what you have to offer and that they will pay for it.
So how do you do that?
There are 5 key steps on how to validate a business idea:
Understand Customer Problems
First, you need to understand the problem your customers are having by starting market research and get behind your customers’ wants, needs, and desires. You need to identify your target market and know to whom exactly you are selling.
Your job is to research the market’s problems, needs, and desires. You need to get outside or your own head because you’re not your customers.
Here are a few things you need to do to get you started:
1. Find top influencers – find the top 10 influencers in this niche. Who are the gurus and the leaders? Who do other people look up to in this niche? Check out their social media profiles. What things are they saying? What things are getting the most likes?
2. Research blogs – read the top 10 blogs in this niche and see what they have in common. Look at the most popular post on those blogs and check the comments sections. What are people saying? What are people agreeing on and what are they mostly complaining about?
3. Find Top FB Groups – find the top 10 FB groups related to that niche. Start doing research and see where there are the most members in the group and start joining these groups. Start looking at the posts and members’ comments.
Remember to write these things down as you go along because you will be able to re-use some of these further down the line.
Analyze Your Competitors
Second, you need to identify your top 10 competitors, analyze their content, SEO, and social media to get a really good understanding of what others are doing in these areas. During your research, the key here is to identify areas for improvement so you can start doing it better.
There are many ways to identify key competitors in your industry, but Google will likely be where you begin your research. Start with a simple search around overarching business ideas.
Once when you find companies that are doing something similar you can following steps in order to start digging deeper:
1. Review their website – What products are they selling? What are the product descriptions? Are they building an email list? What methods for contact and signing up they have?
2. Review customer experience – sign up for their newsletter, subscribe to and follow their blog, follow them on social media. Go ahead – poke around. Sign up and see what is the user experience.
3. Review and gather reviews – check out their product reviews, company reviews, what complaints do they have. See what others are saying about their offerings.
4. Review the products and pricing – check out what products they are offering, what problems and challenges they are solving, and how they are packaging and pricing their services.
5. Identify areas for improvement – After performing this analysis, you now have a better idea and understanding of what your competitors are doing. Take all the information you gathered about each competitor and identify particular areas of your own work that can be improved. If you’re looking closely enough, you’re bound to find something. Identify 5 key areas for improvement
Talk to your customers
Third, you need to talk to your customers and get feedback from them to really understand the depth of the problems that the customer is facing.
There are many ways that you can talk to your customers to get feedback. Here are a few that you can do right away:
1. Create a survey – google survey has a free option where you can create a survey with questions to ask your customers directly. What you want to do is you want to consider contacting 20 – 50 people in the niche personally and asking them some questions to thoroughly understand their situation and what problems they face, as well as what desires they have.
2. Conduct customer interviews – The startup approach to entrepreneurship is based on a simple idea: quickly find out what works and discard the rest. That way you’ll discover if your idea is worth pursuing before putting a lot of time and effort into it. One of the key ways that entrepreneurs uncover what works is through customer interviews to discover critical information such as: What do the customers really need? Does your business idea meet that need?
3. You can even meet them in person for coffee or lunch, or ask them what problems and desires they have. Sometimes, there’s no better way than to get offline and out of your head, and go talk to somebody in person.
Seriously, you need to go and talk to people. You need to ask the market what they want.
Create your Minimal Viable Offer and Pre-sell It
Fourth is to create your minimal viable offer and presell it before you spend too much time, money, and resources on building a business.
The purpose to build an MVO is to launch quickly, based on your idea, with a small budget. This approach allows you to collect users’ feedback for the primary product and include it in future iterations. With the help of an MVO, one can find the right audience, pull the ideas based on experience, and save time.
Based on the previous customer research and competitor analysis that you have done, you should have most of the details already available to start coming up with your first set of details.
How do you get people to buy something that does not exist? How can you create, launch, and sell your offer before it is done?
Go back to the previous research that you have done on your customers, join the social media groups where your ideal client is, and promote your presale to a select group of people by focusing on resolving their problems and challenges. Engage with these users one on one and tell them you are giving them a chance to “sample” what you have to offer.
And the fifth step is to do a pilot program with this small group of testing users. Pilot programs help you find out if there is a market for your product or service, and where that market exists. It gives you valuable insight into the challenges that need to be addressed.
It’s Your Turn.
There you have it. That is how you test if your idea is a good business idea that will earn you a lot of money.
Now, I’d love to hear from you.
Have you already tested your business idea with these steps?
I want to know about your journey. Let me know in the comments below.