You never know where it’ll hit you. You have a great idea for a new business and you’re really excited about it.
It might happen when you’re walking down the street or when you’re just laying in bed or just driving down the road: a new business idea hits you, and it doesn’t let you go!
While you might feel the urge to just drop everything else and jump on it, you should really take some time to think this through, rationally, to make sure that you’re not going to be spending a huge amount of time and money on something that doesn’t end up working out.
So, how can you test your business idea without going all in right away? What steps can you take to validate the proof of concept and avoid while not breaking the bank (or maxing out your credit card)?
I have a few suggestions on how to test and evaluate your business idea, how to test the market, and how you can even get your first clients!
So, let’s be honest… inventing something absolutely new is very rare. There really isn’t many product or services that haven’t been invented yet. So once you hop on the computer to start working on your business idea, don’t get discouraged and bail out on your mission once you find out your product isn't 100 percent unique.
Instead, seize the opportunity that lies in the details of who you are. Your unique advantage is in who you are. Your knowledge and experience. Your personality. Your follow up. Your analytical skills or your people skills.
You don’t need to reinvent the wheel. Use your competitors to your advantage and use their performance data to better understand the market, the clients, the product, and the price structure. Find out what works for them and where they need to improve — and then make your product or service better.
Better yet, focus on improving the way you communicate with potential customers. Here’s how: instead of presenting a long list of product features, tell your customer what problem your product is solving in one clear sentence. Here are two examples:
“I can help you launch your business faster and to be more profitable quicker because you’ll be able to start growing your email list from day one.”
“Your one-stop website for personal fitness training if you’re over 50.”
Both are clear statements of what each business does, without having to attach any additional information to make their product/service understood.
Keep this in mind as the core of your business idea; the very heart of what you are doing and the specific problem you are solving.
Creative ideas rarely come in an orderly way. I keep a notepad handy for those random thoughts and ideas that just happen. When that happens, the details can often flood our brain in the most unstructured way. That’s why, in order to make sense of a brand-new business idea, you’ll have to organize your thoughts, and the best way to do this is by writing them down.
If you’re thinking I’m about to tell you to write a 40-page business plan, don’t worry. Formal business plans are for investors or partners, and those other external parties — who often don’t even read the full BP anyway.
What you need is a simple and concise summary of your business concept, a 3-5 page document that you can refer back to anytime you need to touch base with your original thoughts (be it to stay on track or to alter your path … but we’ll get to this later!).
Now, if you want to put in more details, then go ahead, but don’t get bogged down with the process. If 3-5 pages does it, then be fine with that. My business plan is 18 pages, but it eventually grew to be that way. As I had more clarity, I added more to the plan.
There's a hundred ways to summarize your business idea, and one of the easiest methods is the one page Business Model Canvas. Whether you use pen and paper or an online version, this one-pager captures the key points and helps you to think about just the most important topics.
Now that you’ve organized all the thoughts around your idea, it’s time to trim down your business concept. Your goal here is to reduce your business idea to its most important core feature (highlight it on your business model canvas!), excluding all features that can be seen as “additional” and can be added on later. What you’ll end up with is your “lean” business concept, a slim version of the plan you just put together.
So what does “lean” mean?
Many startups follow a lean methodology, especially tech startups. But, in short, a company launches a very basic version of its product (it is called the Minimum Viable Product) to validate their idea and to generate early interest in the product and the company. This approach… this strategy allows the company to test the market and validate whether consumer interest and opportunity exists, and helps them keep initial production cost, as they have only focused on the central feature of their product.
The business owner, or the company for that matter determines a trial period and sets certain goals that they want to see met at the end of that time frame. If they’re able to meet those goals, the product or service can be expanded with more features and more development can be made to make it more ‘market ready’ so to speak.
But knowing the core feature of your product or service is the key to making your business idea test work.
In today’s world, many, if not most, new business ideas are online-driven. A simple but well done, professional website with some basic marketing functions built into it can help you gauge the potential of your business idea.
These days you don’t have to write a single line of code to create a website; just use WordPress to make it happen. It’s easy to use, and has a lot of ready to use templates for you — many for free and some for a small price.
The WordPress template I like to use? Phlox. It comes free and has an upgrade fee of only $60 to add in some other features that some might think come in handy.
Because it is not the main point of this article, but is definitely interconnected, I am going to dip into the topic very briefly:
Marketing is what brings customers to you. Copywriting as part of the marketing brings customers to you.
The famous copywriter and author, Ray Edwards, said in one of his more recent training seminars, ‘Most businesses fail because of bad copy.” If you don’t know how to write effective copy, then find someone who does. Hey, even a beginning copywriter is better than no copywriter.
But just to be clear, I don’t think getting the cheapest person on Fiverr is the way to go either. Getting cheap help on Fiverr has it’s place. I used them for some graphic design work not long ago. But you get what you pay for and when it comes to the marketing message, you really need someone that understands the do’s and the don’ts of how to write effective copy.
Effective marketing will bring potential customers to you. Your product/service, you and your company is what makes customers stay.
Do not make the mistake of just launching your website, running ads on Google, and then solely relying on this traffic to validate your business idea. What you need to do is find people who love your product and your company. You need to find people who will choose your brand over another, people who go out and tell others about how great you are.
In order to reach this kind of customer, you have to use alternate methods:
• Use social media to gain awareness and attention for your business idea (pick 2-3 of the most effective social networks and use them avidly to engage with your audience).
• Give back to the community that can be in a literal sense such as donating time or services to a non-profit.
Ask some friends and family to spread the word about you and your company (understand that family and friends may support your cause, but do not expect them to rave about it and become evangelists).
Understand the type of customer you have, what they care about, and how you can reach them; be creative and genuine in your marketing, provide value (price, quality, convenience), build relationships, and seek feedback on your performance.
I like to check up on people that I interviewed from time to time and see how they’re making out. I recently offered some free coaching time to talk to someone about starting a podcast and if they thought they were up to the task or not.
All of these efforts combined will help you create not only a solid clientele, but a tribe around your company.
As much as creating a tribe is probably the ultimate achievement for any brand, business is business, and you need to be able to make a serious profit in order to move forward. Once you’ve got your product defined, your basic website set up, and your marketing plan laid out, don’t let your preliminary business goals fall through the cracks.
From day one of your launch, determine the following:
• A set time frame for your trial run; whether it’s three months or a full year (use your best judgment). If after that trial period you either see things getting better, or worse, then keep at it, or pull the plug, so to speak.
• A set of concrete goals you need to achieve (e.g., number of visitors, amount of sales, number of customer enquiries, etc.) If you meet your goals, that’s great! You’re on to something that could really work! This is when you go back to your business model canvas, bring back those extended product features, and expand your marketing plan.
Lastly, Never Stop Changing
Sometimes in order to reach your goal you need to adjust your course a little bit and steer the ship in a different direction. This is typical and has happened to me a number of times. Don’t let that get to you, because getting it right the very first time around is very rare.
Instead, use whatever you learned from your trial run to improve your product and solidify your case. Change is evolution, and making that change is the first step to reaching your goal.
Recently, I made a change in my strategy as well. I kept hearing how frustrating it was to small business owners on how to integrate the technology pieces and that it was taking a lot of time and costing a lot of money to piece that puzzle together.
So, I added in to my coaching process ‘Technology Integrator’ as a service. And if you get the chance to wander over to my website home page, at the time of this recording, you’ll see what that’s about. There’s a lot of integration that needs to happen to just have the basic foundation to an online, personal brand business.
And I did this all under the “lean” methodology.
So friends, to wrap this up, I just want to say, it’s great that you have a business idea. If you take that idea and work it well, your chances of success will be much higher.
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