Ways to Know That Your Business Idea Has Potential

Ways to Know That Your Business Idea Has Potential

People ranging from millennials to small investors are looking for new business ideas. Startup ideas are so popular on social media and in the business community that entrepreneurs often cannot resist the urge to start new ventures. It’s easy to come up with a business idea. But, what about coming up with a robust business idea? It’s nothing short of a challenge, right? But, perhaps even more difficult is differentiating between good and bad ideas. Starting a business takes energy and time and requires a long period of introspection to find realistic and viable business ideas.

Determining the potential of your business requires serious consideration. If you’re an amazing business idea, follow these validation rules and feel free to brainstorm and test your ideas.

How to Know That Your Business Idea Is Robust Enough

Sometimes the question isn’t about inspiration, but whether you have a good idea. It is important to criticize your ideas and seek feedback from as many people as possible. We have evaluated different strategies to help you determine if you have a robust business idea.

  • You Should Jot Down Your Basic Assumptions about Your Business

When you’re first considering a new business idea, skip the formal business plan and start with a simple elevator pitch or Lean Plan to pen down the basic components of your idea.

  • What’s the purpose behind it? What is your mission? Every new venture requires an understanding of its purpose. Are you working to improve people’s lives in any way? What are the key differences between a business and the next person looking to build a similar business?
  • What problem are you resolving? You have to solve real problems that exist in the world. How can you get people to buy your product or service if you aren’t solving your prospect’s problems?
You Should Jot Down Your Basic Assumptions about Your Business
  • How do prospects solve problems today? This is where you want to jot down some notes about your competitors. What choices are customers making today? Why is the solution better?
  • Do you think you can make a lot of money? At this early stage, you don’t have to worry about detailed financial planning, but you need to do some basic calculations on paper to make sure your idea is profitable.
  • Talk to Your Potential Customers

Surprisingly, most entrepreneurs skip talking to prospects about new business ideas. If you don’t talk to your prospects, your chances of failing are greatly increased, so get out the door and start talking to people as soon as possible. 

When interviewing prospects, you want to identify key assumptions you penned down in your business presentation. Are there really any problems you think they have? How do they solve problems today? What are they thinking of your idea?

Talk to as many prospects as possible to get different perspectives. You can also gain valuable insights into what your customers’ offices and workplaces look like, how they work, and how they make purchasing decisions and make purchases.

  • Show Your Potential Customers a First Example of Your Product, If You’re Having One

If you can and it suits your business, try it and share a prototype of your product. If you are creating a product, you can always share a prototype or a few images of what your product will look like. If you provide services, describe the results of your services and what your prospects would have if they hired you.

Ideally, you want your prospects to be on the same page as you and encourage them to criticize your ideas. The more realistically you can communicate your ideas to potential customers, the better feedback you will receive.

  • Figure Out What Customers Are Willing to Pay
Figure Out What Customers Are Willing to Pay

When you talk to your prospects, find out how much they’re willing to pay for your product. This can be very tricky since ideally, everyone wants things for free. But there are some tricks you can use instead of asking outright. Firstly, if there are competitors in the market, you can determine how your company will stand out by looking at their prices. You can also look at the value you provide to your customers and set a price based on that. 

When you think about price, ask potential customers if they are willing to order your product or service at your price now.

  • Find People Who Think Your Idea Isn’t Good Enough

When sharing business ideas with friends and family, it’s easy to hear only positive feedback. Even potential customers may not want to offend you and give you a completely honest opinion. 

It’s important to find a few skeptics here. Find someone who doesn’t like your idea and have them dig a hole. Why do they think it will fail? What do they see as your weaknesses?

You don’t need to fix every weakness found by these detractors, but you should gather feedback from people you think can be improved. Not everyone is a customer, but starting a new business with an open eye is good. Are there potential pitfalls that you haven’t considered yet? How would you react if you met a potential buyer who didn’t like your product? 

Getting feedback from people who don’t like your business idea can help you understand how to address these issues and how you will react as your business grows.

The Key Takeaway

It’s high time you should stop talking and start penning down your business idea since talking about an idea before carrying out some initial processing on paper will trick your brain into thinking that you’re actually doing something regarding the concept. Follow these above-mentioned steps to run a validation test for your business idea.

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