You have a great idea and you are ready to take the plunge and launch it in the market. However, how can you be sure your idea is viable? How can you test its true worth? While there may be a shortage of crystal balls to help you see into the future, the following steps will help you test your idea’s chance of success and help you in your decision making.
1. Identify the problem people want fixed
Will your product or service provide a solution to an identified problem or will it create a solution to a problem people didn’t know they had? An example of this is the mobile devices we rely on so heavily now. These devices provide solutions to communication and connectivity however, have also provided solutions in many other areas including entertainment and education.
2. Ask yourself the right questions
These are questions you need to ask yourself before you start researching your idea:
- Why do I want to start this business?
- What problem will my product or service solve?
- What is currently available on the marketplace?
- Who are my target customers and how will I reach them?
- What resources do I have and what do I need?
- What are my short, medium and long term goals?
Start with the end in mind about what you want to achieve in your business and you will be surprised how your plans fall into place.
3. Know your competitors
If you know your competition, you can look at what is working for them, what has worked in the past and where your own business strengths lie. Are there opportunities for cooperation with your competition?
Developing a profile of your competition can help to identify gaps in the market and unmet needs of your potential customers.
4. Research and identify your target market
Customer profiling and market research involves really delving into your potential customers’ needs, wants, problems, location, buying habits and more!
Test your assumptions – will customers actually pay for your product or service, will they want its features and benefits, will they pay the price you want, what is the best way to reach them and make your sales?
5. Make a market assessment
This can be through focus groups, asking questions on social media, small market tests or creating a trial version of your product or service and seeing how sales go.
Ask people who will give you an objective opinion. Friends and family are wonderful to talk to but may not necessarily give you the most honest opinions.
6. Assess your capital needs
Working through your capital needs is a critical element of your startup plans. How much money will you need? What will it be for? What sources of funding can you access or tap into? What is your current financial situation and what to you need to do to develop and grow your idea into a profitable business?
Of course, these are starting points so for help further developing your business idea, contact the Business LEAP team on 1300 249 482 for free business assistance and information about how to develop your Lean Business Plan.