Five steps of validating a business idea, product or service :
So, in this article we are discussing; What all points one should consider to validate the business idea? So, you will learn some tricks & tips that will help you in the validation process.
Before that tell me do you have a mind-boggling business idea in your mind? yeah of course; otherwise, why the hell you would be here?
And If you don’t have one then, you must read this article on “Business Idea Generation”.
Coming back to the discussion; business idea validation is one of the toughest tasks of starting a business, which will take a lot of time getting through it. That’s something where you will need an “Experts Advice”.
The moment you get a business idea lingering in your head or a series of sticky notes in your diary, begin jotting down all the ways to develop it. You can wait until your inner person shows some firmness about your business idea. But, it’s even better if you start developing your business idea from the first day; because you may find your business idea in next few months on the shelf of a retail shop or on Appstore.
Now, you have the best business idea, and you have invested some time of your life on it; its time to check the viability. There are a few steps by which you can check the reliability/validity of your business idea.
1. Search for it
Every day I hear about some business ideas, but out of 100 only 3 becomes the next big successful businesses; because, the moment I pull out my phone and search for those products/services, within one search I can find the same existing products/ services in the market. i.e. save some time for your business idea and check thoroughly if it is existing already in the online and offline market.
If it does not, then it’s a jackpot time for you.
But, if you find it does, don’t give up on your precious business idea so expeditiously. Instead of giving up on your business idea, you can search for;
a. What are the new ways to innovate the products & services?
b. How you can improve value in existing products/services?
c. How can you target the satisfied market?
If you can find the answers, then move forward.
2. Evaluate with feedbacks
This is the most crucial part of this process, it will totally depend on with whom you discuss the business idea. The first rule is to exclude friends & family from the feedback list; because you will get a lot of fake feedbacks from them.
Select the interviewees who will not be partial when it comes to suggestions. After selecting those people, conduct an informal interview with them individually and dedicate some time for them. After getting reviewed, great them with wishes or a small gift.
The last task is to review the suggestions & decide.
3. Build Minimum Viable Product
Minimum viable product is a vast concept which allows to get continuous feedback pool from the early users of the products & services. It is the product or service which is the most pared down version of it that can still be used & functions same.
Why building a MVP is helpful –
a. It has enough value that people are willing to use it or buy it initially.
b. It demonstrates enough future benefit to retain early adopters.
c. It provides a feedback loop to guide future development.
The catch to this development technique is that it gives access to the early adopter’s valuable suggestions required to guide the developer. This suggests that technically positioned products used by technically sound users may be most appropriate for this type of development technique.
4. Build an Identity for your brand
If all the above steps go well, and if you are feeling winner already; start building the brand identity from that moment itself. In today’s fast-moving world, innovation is at it’s edge. If the business idea is profitable today, it may be bashed out or may become obsolete tomorrow.
More importantly, seat relaxed only if you have a business idea which is mined by a groundbreaking experiment/process or patented technology. If not then be ready for the race with your new competitors. It’s better if you enter first in the market.
5. Design a Customer Acquisition Plan (CAP)
The first step of any basic customer acquisition plan is to identify quality potential customers. Many CAPs include the process of establishing a relationship with prospects (Customers) to identify their needs and determine how the products offered relate to those needs. In CAP you need to create a picture of your ideal customer & identify what qualities might urge him/ her to buy your products or services. It will be convenient for you, if you divide the target market with some factors, like age, gender, education level, income, and location. The more you target the niche market, the more practical customer base you will get. Until and unless you figure it out, that what you are going to sell, you will not get the clear view of the picture.
6. Business Feasibility Analysis
All the steps mentioned above will give you the idea of the market, but what about the operational part? Here comes, another very important step is to check the feasibility/ validity of your business idea, which will be on the basis of some factors; like financial, technical, sales and market, and legal and SCM factors.
a. What will it cost to get your business off the ground?
b. Where will that capital come from?
c. What are your start-up and ongoing expenses?
d. What is your earning potential once you’re up and running?
If you found all these sub-steps of business idea validation / Business Feasibility checkup positive then only you can move forward to the next big step of “Business Modelling”
If you need any help in the validation process do contact us on info@meticulousbplans.com