Validating Your Business Idea

Ideas are nothing without execution. But, how do you even know if a business idea is even worth pursuing? 

Many times entrepreneurs will use their gut feeling in making the decision to put their blood, sweat and tears into taking their business idea to fruition. Before investing any time and money in a venture, you need to validate your idea. There are some methodical ways of validating our business idea before putting in all that hard work. Let's discuss how, including some free tools (yes, FREE) that you can use, to verify whether your business idea will be a success.   

Step 1 - The Idea

Honestly, I think almost any idea has potential. It's in the execution of the idea that can take it to success. At this point, I am assuming you have created a list of possible business ideas that you want to pursue and have narrowed down the business idea of your choice. The next step is for you to determine whether this business idea makes sense. How will this product/service solve people's problems? Is it practical? Why would people want to use this product/service? Does it have lifetime value? Does it already exist?

Ask yourself if the business idea is something you would use. Many times, the easiest way to validate an idea first is to survey yourself. 

Step 2 - The Demographic 

Once you have a broad level view of how the business idea makes sense, you need to determine the target audience. Who will want to purchase your product/service? An easy way to gauge interest in the idea is to run some basic tests. Run a Craigslist ad. Do people contact you? Something I learned recently is to use Facebook ad targeting to see how many people have an interest in your business idea. 

These are cheap and efficient ways to measure feedback on startup ideas. If a good number of people sign up, it means there's real interest, and it's time to take the next step.

Step 3 - The Research & Feedback

You can start with free tools like Google's Keyword Tool and Google Trends to get a gauge of user interest.  But it is important to get your business idea in front of an audience. Browse social media to see if there is any discussion from people looking for something that you're about to create. I always like Twitter because it's pretty public and meant for conversation. You can use Twitter's Advanced Search to search for people that fit your demographic (i.e., potential customers). Another great way to gauge interest is to create and share a survey. Send it out to mentors, friends, former co-workers, and social media. This feedback will help you gather real-world insight on your ideas. 

Step 4 - The Testing & Analysis

Once you have determined that there is definitely a market for your business idea, you should validate it one step further. Create a website around the idea. Doing this will answer two questions for you: 

  1. Are people actually searching for this type of product/service like Google suggests? 
  2. Can you capture these people and build a customer base that wants your product/service? 

This website needs only to be a landing page that can capture interested email subscribers. We can discuss website aesthetics, verbiage and Search Engine Optimization in another blog post or feel free to contact me for a tailored approach to your business idea. 

Another alternative is to use Pay Per Click from Google Adwords; but, it comes with a cost. You can't go wrong with either avenue. 

Step 5 - The Result

The primary goal of the website and Pay Per Click is to convert the traffic into email subscribers. Mostly, people who are genuinely interested in your product/service are ready to buy it when your business is ready to launch. 

 

I am sure you are definitely on to something with your business idea. It just takes a little bit of time and a small investment on your part to determine if you should move forward with it. 

Until next time,

 

Do you have strategies to share about business idea validation? Share in the comments! We’d love to hear from you and chat about your experience.

Gray Capital Solutions

Gray Capital Solutions, 1442 Brush Street, Suite 200, Detroit, MI, 48226, United States