10 ways to check that your new business idea is viable
Posted: Wed 15th Jun 2022
Preparing and testing a new business idea is essential. Just as it's necessary to have a good idea to start as an entrepreneur, testing will let you know if your idea is likely to succeed.
Being proactive here is vital. You'll have to be open, receptive and attentive. Also, you'll need to devote time to thinking about your project thoroughly and constructively.
Many entrepreneurs fall into the trap of thinking they don't need to take this step. Others refuse to try their idea because they want to be discreet and don't want their precious information to be revealed too soon. On the contrary, testing is in your interests as you'll be able to draw conclusions and take action.
Here are 10 ways to make sure your new business idea is viable.
Describe your idea
You need to write a detailed description of your idea. Ask yourself the following questions:
Is it a product or a service?
What's its purpose?
What solutions does my concept provide?
Why am I offering it?
Who's my target audience?
Why should potential customers choose me over my competitors, and what do they get in return?
Define your target
When entering a business market, you need to know its characteristics, trends, how it works and the type of audience you're targeting. It's unrealistic to try to reach everyone out there. Instead, you need to target specific customers.
In this webinar, Steven Bartlett from Dragons' Den shares his top tips on how to put your business ideas into action:
Surveys and interviews
Carry out a survey using the customers you've defined as your target. Send out a questionnaire, as you'll benefit from the number of responses and the content. You can do this online and make the whole thing an easy and automated process.
Conduct interviews with professionals in your business sector (for example, other contractors, suppliers and so on). Tell them about your idea and listen to their responses.
Ask your friends and family for advice, especially if you're using 3F (family, friends and fools) financing.
Trade shows and sector events
Visit trade shows, workshops and events for the sector in which you operate. This is an ideal way of meeting like-minded people. They might later become part of your network of trusted contacts.
Moreover, going to trade shows is a great way to study your market. You'll be able to analyse your potential customers' needs and exchange ideas with other entrepreneurs. So, don't miss this opportunity to talk about your idea and test it in professional surroundings.
Set up a landing page
Create a landing page to convey the central message of your new business idea as if you're at the point of launching (even though you might still be a few months away from being ready).
Include a call to action for customers to test your product or service and invite visitors to your page to leave their email addresses. The feedback you'll gain from this page can be exciting to check you're on the right track. If you get a fair amount of traffic to your page but no-one provides their email address, you'll know it's time to take action.
Choose testers
Pick a sample of your potential customers to test your product or service. Most of all, you need to analyse each participant's response and look for anything they like or want you to change or improve.
Have a prototype
You might include this when you choose testers, as mentioned above. However, for some products, you might want to create a prototype to test with relevant individuals from your sector after taking on board the feedback from your testing phase.
Do a soft launch
Launch your product or service in a controlled environment – for example, by using three or four businesses you know. Analyse everything you can measure and study the data carefully.
Get firms who work in the area where you're entering the market to be on your side. Offer them an initial good deal followed by incentive-based sales. This step is critical in understanding whether your business has the potential for growth.
Use a business incubator
This is an excellent way to test your new business idea in an expert ecosystem, without taking any risks. Also, you can set a specific timescale and have the legal set-up for invoicing, buying, managing and directing. Most of all, you'll receive support for developing your project.
Go into the market, your final testing place
Once you've launched into the market, don't underestimate the power of keeping track of customer feedback on your product or service. An easy way to acquire this is to run an app so people can rate you with several stars or by clicking on a pictogram like a smiley.
Key takeaways
Evaluating and testing your new business idea increases your chances of success. Your idea might be fantastic, but you need to make sure you've analysed your project sufficiently and taken the abovementioned steps. Otherwise, running before you can walk is likely to turn a great idea into a failure.
Relevant resources
You might also like…
