I hate to say it, but most new businesses fail within the first 5 years. And when you’re just starting out, there are no guarantees that you’ll even make back the money you invested to get the business up and running. But you know what will absolutely guarantee that your business bombs?
Not validating your business idea.
You may come up with your best ideas in the shower and your family might be reassuring you that your idea WILL be the the next big thing, but let me ask you this…
Would you buy a house without doing some research into the condition of the house and the neighborhood it’s in? Would you set out on a journey to a new place without a map or any directions just because you “felt sure” you could find your destination?
No and no.
Well, diving head first into a business endeavor without validating your idea is pretty much the same thing. Why create something that nobody will buy?
By spending a little bit of time validating your business idea, you’ll be able to find out if there’s a need for what you plan to sell, a demand for it (because people don’t always want things just because they need them), and if people will be willing to buy whatever you plan to sell.
This could save you a whole lot of time and money because if you find out there’s no market for your idea, you can stop working on it and move on. And if you find that there is a market for your idea, you can pursue it with a great deal more confidence. Sure, businesses built on well validated ideas can still fail, but the risks are definitely a lot lower.
So if you’ve got an awesome business idea, how can you validate it without having to hire a professional analyst?
Here are 5 ways to start validating your business idea (or your next product/service idea) without spending a penny.
1. Talk to people.
No, don’t ask your mom or your husband. Talk to people who are experiencing the problem that your business aims to solve. Find them on social media, in forums, and in real life. Is the problem you’ve identified something they want to solve? Would they be willing to pay for the solution you’re planning to offer?
2. Stalk your competitors.
Find out how many competitors are already in the market. Check out Google, Amazon, E-Bay, Yelp, Etsy, and anywhere else where your potential competitors might be. If you find lots of competitors, that’s a good thing. It means there is a general market for the ype of thing you’re thinking of selling. But don’t stop there. Look at how each competitor differentiates their products from everybody else’s. Read reviews to see what customers think, what these business are doing well, and what they aren’t doing well that you could improve on.
3. Offer samples / mini versions.
Create and offer samples of your proposed product or service (or mini versions) in exchange for honest feedback (and testimonials if people love what you’ve created). It’s often easier for people to give accurate feedback on your idea when they can actually try it out rather than having to imagine using it.
4. Survey people in your target market.
Create a simple survey that people can fill out anonymously. Distribute the survey online in Facebook and LinkedIn groups where your target market hang out. Ask everyone you know to share the survey with people they know who fit your target market profile. You could even ask other business owners who run businesses in adjacent industries if they would share your survey with their email lists and customers.
5. Try crowdfunding.
If you have a novel or innovative business idea, try setting up a crowdfunding campaign on a site like Kickstarter or Indiegogo (don’t do this if your business idea is simply another version of someone else’s business). This will help you to gauge interest in your idea, get some valuable feedback from the community and even raise some money to get things going. It’ll take time and effort to launch a good campaign, but if you’re passionate about your idea, this should be a fun and exciting process.
If you’ve got a cool new business idea, I hope you’ll find this list of validation ideas helpful.