Everyone has ideas — big ones, small ones, great ones, and yes, terrible ones, too. (Remember that time you had the idea to cut your own bangs and shave your eyebrows off in the 3rd grade? Just me?)
While hair grows back and you can recover from a bad idea like that pretty quickly, it’s another matter to invest in and proceed with a bad business idea. That always guarantees a loss of time and money.
The best business ideas solve problems. We’ll say it again for the people in the back — the best business ideas solve problems.
So how do you know if you have a great business idea or a dud? In today’s post, we’re going to discuss the process of business idea validation and you’ll learn how and why you should validate your business idea.
Validating your business idea
The worst thing you can do when making business decisions is guess. Guessing is not a good strategy when it comes to your business, your livelihood, and your income.
Idea validation is the process of testing and validating your idea with feedback and data before you start developing a new product or service, or starting a business. This process is essential to developing a business or product that people actually want. If your idea is self-serving and doesn’t help solve the problems of others, it won’t go far.
Large companies and corporations call this process “Research & Development,” and while you won’t need to do anything at such large a scale, there are a few things you can do right now to validate your idea.
By validating your business idea you’re going to save yourself from a future headache and loss of money. So, let’s dig in and figure out how to validate your idea.
The business idea validation process
Identify your ideal customer
Do you know who your ideal customer is? That’s as good a place to start as any when you’re trying to validate your business idea. If you don’t know who your ideal customer is, who are you supposed to ask for feedback and validation? Sure, you can ask your friends and family, but let’s be honest: They’re likely to sugarcoat things so as not to offend.
Your ideal customer is the person whose needs are met by what you’re offering. To identify those people, you’ll need to know your products and services from your customer’s point of view. Think from their perspective: What sets you apart from competitors? What problems of theirs does your business solve?
Identifying your ideal customer isn’t about identifying who you want as a customer, it’s about identifying who benefits most from your product or business as it is.
Think about what you’ll ask when validating your idea
In order to validate your business idea, you’re going to have to present it to people to get their honest feedback. You don’t want to inundate them with a massive presentation; instead think about how you can present a handful of ideas, the best ideas and solutions your business aims to provide.
If you start with your life story and amble into a presentation about your business, you’re going to lose your interviewees’ attention (yes, interviewing is part of the process.) You’ll want to keep your presentation short so that it doesn’t get confusing and focus on the core of your business or products.
Reach out for interviews and feedback
Once you’ve identified what your ideal customer looks like and know what you’ll be asking, it’s time to do some reachout. Make a list of potential customers or clients that you think fit your ideal customer profile and ask for their time. You’ll want to set expectations with them: Let them know you aren’t trying to sell anything, why you’ve contacted them, and that it won’t take much of their time.
As we said earlier, friends and family are likely not great candidates for interviews. They’re personally vested in you and may gloss over issues they see in your product or business idea. It’s not because they’re trying to be unhelpful, but more often than not, they won’t want to hurt your feelings.
The business idea validation interview
When you start your interview, remember that these people are giving up their time to try and help you succeed. So, say “Thank you” and let them know how much you appreciate their time. Explain that their feedback is essential to you designing and creating something people will actually benefit from. People like to know that they’re important and valued, and assuring them of their importance during this process can help them open up to you.
Give them a brief rundown of your business, but don’t get lost in the weeds or use technical terms that they’re unlikely to understand. Then, launch into the core aspects of your business idea that you need their opinion on. Present these ideas individually and allow people to give you their thoughts on one of them before proceeding into the next. The interview is a back-and-forth between you and the other person, not a one-sided soliloquy.
Once you’ve completed the interview, thank them for their time and again reinforce the importance of their opinion and insights. You may find that you’ve just earned yourself a future customer or client.
Review your feedback and optimize your business idea accordingly
After your interviews, sit down and review what people had to say. Look for common themes and patterns in your feedback — is there anything everyone was excited about? What negative things did they highlight?
This process of validating your business idea isn’t designed to deflate anyone’s confidence, it’s designed to help you create the best and most effective business to suit your customers’ needs and wants.
Take what you’ve learned from the interview feedback and use it to modify and improve your business idea. Always keep the customers’ point of view in mind as you move through this exercise as they’re the ones who will be keeping you in business once you launch.
What happens after you validate your business idea?
After validating your business idea and making any necessary changes, it’s time to create a business plan and launch your business.
Keep in mind that it’s essential for businesses to have a digital presence these days. Online business has boomed throughout the Coronavirus pandemic, and we don’t see it going away any time soon. If you want to be competitive, be where your customers are — online.
Creating an online presence for your business starts with a domain name. Your domain name is your online address and will lead people to your site. You can easily create a beautiful website using a website builder once you’re ready to go live.
If you need help or have any questions, don’t hesitate to contact us or comment below. We wish you the best as you launch your business!