Testing Your Business Idea in 4 Easy Steps
Everyone has great ideas. Most people don’t take any action on their ideas. I’m sure you’ve had a great idea that someone else has brought to fruition. We all do! The first step is not a business plan, or a business license. The first step to starting your own business is testing your idea to ensure people will pay for your product or service. Starting here is MUCH less expensive and will make a greater impact on your business.
1. Your Definition of Success
So, you’ve done the experiment, Now what? Let’s say you got 300 signups after a week or so. Is that good or bad? Being an entrepreneur is work and getting started is no different. Set a success metric. What’s results do you need to get to proceed with your idea?
You can base your success metric on a variety of factors. Consider factors like opportunity cost of starting a business, development costs, competition, marketing, or KPIs. How many sign ups do you need at the price point you’ve set to generate enough revenue? Define what success looks like before you run your experiment. Is it worth it with pursuing results that still aren’t enough to sustain their companies. Don’t pursue and invest in an idea that can’t be sustained.
If you’re selling a product a good place to start might be to ask friends and family how much they’d pay. You may need to give away a few samples. If your friends and family are honest they will let you know if your product is business worthy. BUT, your friends to be the say all be all.
Setup a landing page to gain interest. This is a way to do market research for your idea and determine the cost of acquiring a customer.
3. Move The Crowd
When your page is ready, set up a Facebook Page for your Business. Facebook Ads are a great way to get targeted traffic quickly. You can launch an ad in just 2 minutes. To make the most of Facebook Ads, choose specific demographics to help you track your results by region.
Once the experiment has ended, analyze the data. Did you get more or less interest than anticipated? Be sure to follow up and connect with those who expressed interest. Interview them about their needs and expectations for the product or service. Gauge their enthusiasm in your idea. Use their insights to help build onto your idea.
If you didn’t get your anticipated results, you just saved yourself time and money. One experiment shouldn’t shatter your dreams. Keep working on your idea until you get your desired results. Adjust and re-conduct your experiment to improve results.
Planning is essential to entrepreneurial success. So, get started! The world is waiting for your idea.