How To Validate The Feasibility Of A Business Idea
Founder and Owner at Powercode, Ultimate Software Development.
An idea is the incentive that makes people take action and start moving forward. But no matter who you are—a new or an experienced entrepreneur—it isn’t easy to move from the stage of your idea’s inception to its implementation. This is a time-consuming process that, first of all, requires thorough and deliberate decisions. One of the most crucial is checking the feasibility of your business idea. So, here are some actions you can take to examine if your idea is viable or needs improvement.
Determine the value of your idea.
A business idea is not just an image in the head. It is aimed at solving a specific problem for a particular person. Don’t forget to ask yourself if your approach or perception is valuable. What makes you think so? If you do not know, see the answer vaguely, or have the slightest challenges in responding, it is better to stop and put more thought into your concept. Your task is to determine the pains of your target audience beforehand and do everything possible to ease them. Otherwise, your idea will remain a vague, unrealistic and unreachable concept immured in your head.
Identify potential users of your product or service.
Just having an idea is not enough. Knowing and understanding your target audience is as important as the idea itself. If you make the wrong choice or make a mistake in choosing strategies for communicating with users, you will not reach your targets. Study the demographics, social status, interests, financial opportunities, major “pains” and other features of your audience. I’ve found the more detailed the portrait of your client is, the easier it will be for you to continue working on implementing your business idea. Start with an exhaustive list of all stakeholders and gradually remove less suitable ones.
Research and conduct an assessment of your potential market.
When you start working on your idea and bringing it to life, you will need substantial financial resources for which you may turn to venture investors. And here, it’s crucial to demonstrate your potential for profitability. Carefully study the market, size and competitors, and identify how you can stand out in the niche. Also, don’t forget to consider your product’s possible limitations that may prevent its scaling in the future. When assessing the market, think globally but proceed from actual figures and opportunities. I suggest to take advantage of the TAM, SAM, SOM rapid assessment method for bottom-up estimation that will show you how much you can sell in the near future, your target market share and how much you can scale.
Communicate with people.
Communication is the path to broadening your business horizons and gaining a deeper understanding of your audience and market. It doesn’t matter what type of communication you have chosen—face-to-face or online—learn to listen to your interlocutor. Gather feedback and learn about users’ problems and what can help them. Ask open-ended questions that require more than a simple “yes” or “no,” and don’t try to convince or impose your product or service. With the help of the information obtained from the dialogue, you can change or refine the hypothesis of your business idea.
Create a landing page or a business website.
Thanks to modern builders, you can independently—without any assistance—create a one-page business website or landing page where you outline the main aspects of your idea, such as what you offer, for whom and what problems your solution can solve. This is not your final product, so do not build something sophisticated. To validate your business idea, analyze the conversion and look at organic traffic. Additionally, you can ask your visitors to subscribe to a newsletter or fill out a form on the website with a few simple questions. Through the number of respondents, you can track the amount of people who are really interested and detect if your website generates interest at all.
New undertakings require great dedication, utmost attention and flexibility. Take the process of validating your idea seriously and carefully consider all stages of the process. At the same time, I suggest to keep going if you think the process is too slow or if something goes wrong and you need to adapt and redesign your product. This can help you confirm that your efforts are worthwhile and help you eventually get solid results, protecting you from wasting capital and failing.
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