When considering new business or product ideas, it’s important to verify your concept early on in the entrepreneurial process to avoid wasting time and resources on a product that won’t sell. When banks, investors, and crowdfunders are contemplating funding your firm, having market validation can provide them more assurance.
Finding out whether your product is needed in your target market is known as “market validation.” By confirming your business plan, you can determine whether customers will buy your goods or services and whether your company will be lucrative.
You can better understand how your product meets or doesn’t meet the needs of your target clients by going through the process of validating your company idea. Gaining these insights can assist you in developing a product or service that not only meets the needs of your market niche but also brings in your first paying clients.
The days of developing products behind closed doors and trusting that once they are released, the world will embrace them are over. Right from the start, you must concentrate on your market and target demographic.
Below are the steps to guide you in validating your business idea without spending money before you launch it.
1. Write Out A Business Plan
Create a business plan that includes information about your target market, industry analysis and research, the potential growth of the company over the next six to twelve months, and your unique competitive edge.
As you go through this process, your idea may change as you learn about related businesses or developing market trends.
Download a free business plan template and think of how you would fill in each part if you are unsure of where to begin.
2. Create A Landing Page
It’s time to present your fictitious company to your actual audience now that you have one. Furthermore, nothing beats the Internet for acquiring new customers. Make a landing page for free first, then proceed
You don’t necessarily need to spend money on designing a landing page considering all the available free choices.
The goal is to create a few alternative landing pages and evaluate how your target demographic responds; there is no need to spend a lot of effort on them. After that, you can combine components to come up with the ideal answer.
As previously stated, there are a number of elements you should test on a landing page: start with a template, concentrate on an attention-grabbing text, and finish by building several CTA buttons. You can concentrate on specifics like the tagline, font styles and colors, effects, picture sliders, etc. once you find a combination that generates a respectable number of conversions or at least clicks. You won’t believe how much of a difference these so-called “details” can make, so don’t undervalue them.
3. Figure Out The Problem Your Product Is Focused On
What problems does this company idea tackle, and are people willing to pay money to solve these difficulties?, these at questions you should ask yourself.
This is a brainstorming gut-check to determine how urgent your business idea is.
4. Research On How Important This Problem Is
Every step of life is plagued by problems, but not all of them can convince individuals to put money into finding a solution. Only those issues that are extremely important to us are covered by the fees we charge. Similar to how potential customers for your product would behave, they would only consider paying for solutions to the most significant and urgent issues. Simply defined, for your product or service to succeed, it must address one of the three most important issues that your potential customers are facing.
You must now research whether the issue your solution is intended to solve is one on this list. If it isn’t, there is no use in moving on with your business idea because it is likely to fail because it won’t generate any money after being monetized. Make a draft of your target customer’s profile, including his age, job, family situation, etc., before you start your study. Following that, you need to find out what level of concern your target market has about the issue.
5. Research Industry Trends
Keep an eye on what’s happening in the market while you develop your business concept. Which novel technology is being presented? How have customers been acting this quarter? Which new businesses are sprouting up?.
Weekly reading of industry blogs or newspapers, subscribing to industry expert podcasts, and setting up free Google Alerts to receive a daily summary of what’s occurring.
6. Sniff Out For The Competitors
To confirm that there is a market for the problem-solving solution and that there is demand for it, you are on the lookout for competitors. In this situation, learning that a large, well-established business is focusing on the same issue as you is fantastic news. It would also be pretty upsetting to learn that there are no businesses operating in the sector. Because of the fact that this indicates that the issue is too particular and that few people are willing to pay to find a solution,
Asking your prospects about the current solutions they use to solve the problem will help you understand the situation with the competitive advantages your product should have.
7. Consult With Your Prospects On Your Product Improvement
Keep in touch with your prospects because they might be useful for more than just idea validation. Keep in touch with them going forward if the idea validation is effective! Since they might voluntarily assist you in developing the ideal solutions for the primary characteristics and marketing plan for your goods!
Business choices are frequently made too quickly by many people. Some people decide to establish their commercial company right away, just based on intuition and dreams, but these ventures typically fail within a short period of time. Verify your business idea using the six steps in this post, and protect your future from such a situation! Yes, typically this results in the dream coming to an end, but this validation will undoubtedly save you time, money, and stress while also protecting you from business ventures that won’t succeed! So take this action to save yourself a ton of money that won’t cost you anything!
8. Make Sure Your Product Will Bring The Revenue
Theoretically, that may occur if you tackle one of the three primary issues of your target market yet receive little or no significant revenue. Of course, this could indicate that you exaggerated the gravity of the issue. In any case, it’s time to discuss the rates!
To begin with, you must confirm once more that there is a demand for your product: there are rivals, some of whom are expanding and making substantial profits. Your company can succeed if theirs does, too, if there are buyers willing to pay for their goods. Asking your prospects subtly whether they are willing to pay their money for your answer to their pressing issue will give you greater assurance. In addition, the answer is 20% better than what the rivals provide!
9. Properly Determine Existing Solutions
After making a lot of calls, you’ll know how your target customers are currently resolving the issue. They might speak about particular goods and businesses, or they might mention a corporate procedure, a person they outsource the issue to, and other things.
Typically, you want to address a problem when there are already rival solutions. If at least one of the current rivals is succeeding, that is, has traction, has raised money, has been around for a while, and is expanding, then you can usually say with confidence that you have a sizable enough market with a tier 1 problem.
If there aren’t any businesses out there working to solve the same issue as you, proceed with caution.
Most often, this indicates that you have no market or that your problem is too particular or affects too few individuals. Although specificity is advantageous, you must balance it with a sizable enough market.
10. Verify There’s A Budget For A Solution
You can examine their traction if you have competitors that are already trying to tackle the same issue. Are they expanding quickly? Do they have a large enough number of patrons? Do they hold fundraisers? Arent they hiring? Look for signs of development.
Most of the time, that’s a fantastic indication that they not only have a terrific product, but are also making money and attracting paying consumers.
It implies that someone has set up money for goods like yours and theirs.
In order to acquire their opinions on price, you should also schedule a second follow-up with at least 10 of the prospects you spoke with over the phone.