Everyone has ideas — big, small, great, and yes, terrible too. (Remember that time you had the idea to cut your own bangs and shave your eyebrows at 3rd Degree? Only me?)
While hair grows back and you can recover from a bad idea fairly quickly, it’s another matter to invest and move forward with a bad business idea. This always guarantees a loss of time and money.
The best business ideas solve problems. We’ll say it again for the people behind — the best business ideas solve problems.
So how do you know if you have a great business idea or a crappy one? In today’s post, we will discuss the business idea validation process and learn how and why you should validate your business idea.
The worst thing you can do when making business decisions is to guess. Guessing is not a good strategy when it comes to your business, your livelihood and your income.
Concept 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 really want. If your idea is self-serving and doesn’t help solve other people’s problems, it won’t go far.
Big companies and corporations call this process “Research and Development” and while you won’t need to do anything on such a large scale, there are a few things you can do right now to validate your idea.
Validating your business idea will save you future headache and lost 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? This is as good a place to start as any when trying to validate your business idea. If you don’t know who your ideal customer is, who should you 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 they don’t offend.
Your ideal customer is the person whose needs are met by what you offer. To identify these people, you need to know your products and services from your customer’s perspective. Think from their point of view: What sets you apart from the competition? What problems does your business solve for them?
Determining your ideal customer is not about who you want as a customer, but about who benefits most from your product or business as it is.
Think about what you will ask when validating your idea
To validate your business idea, you should pitch it to people to get their honest feedback. You don’t want to overwhelm them with a huge presentation. Instead, think about how you can present a handful of ideas, the best ideas and solutions your business aims to offer.
If you start with your life story and give a presentation about your business, you’ll lose the attention of your interviewers (yes, interviewing is part of the process.) You’ll want to keep your presentation short so that it doesn’t create confusion and focus on the core of your business or products.
Reach out for interviews and comments
Once you’ve determined what your ideal customer is like and know what to ask for, it’s time to do some communicating. Make a list of potential customers or clients who you think fit your ideal customer profile and ask for their time. You’ll want to set expectations with them: Let them know you’re not trying to sell anything, why you contacted them, and that it won’t take long.
As we said earlier, friends and family probably aren’t great interview candidates. They belong to you personally and may reveal issues they see in your product or business idea. It’s not because they’re trying not to help, but most of the time they won’t want to hurt your feelings.
The business idea validation interview
When you begin your interview, remember that these people are giving up their time to try to help you succeed. So, say “Thank you” and let them know how much you appreciate their time. Explain that their feedback is essential to designing and creating something that people will really benefit from. People like to know they are important and valued, and reassurance of their importance during this process can help them open up to you.
Give them a brief description of your business, but don’t get lost in the weeds or use technical terms they’re unlikely to understand. Then start with the key aspects of your business idea that you need their opinion on. Introduce these ideas one at a time and let people tell you their thoughts on one of them before moving on to the next. The interview is a back and forth between you and the other person, not a monologue.
Once you’ve completed the interview, thank them for their time and reinforce again the importance of their opinion and knowledge. You may find that you have just won a prospective customer or client.
Check 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 comments — is there something everyone was excited about? What negatives did they highlight?
This process of validating your business idea is not designed to deflate anyone’s confidence, it is designed to help you create the best and most efficient business that fits your customers’ needs and wants.
Take what you learned from the interview feedback and use it to tweak and improve your business idea. Always keep the customers’ point of view in mind as you go through this exercise, as they are the ones who will keep you in business once you start.
What happens after you validate your business idea?
Once you’ve validated your business idea and made the necessary changes, it’s time to create a business plan and launch your business.
Keep in mind that it is essential for businesses to have a digital presence these days. Online businesses have boomed throughout the coronavirus pandemic, and we don’t see it going away anytime 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 email address and will lead people to your website. You can easily create a beautiful website using a website builder once you are ready to go.
If you need help or have any questions, feel free to contact us or comment below. We wish you the best as you start your business!
