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Validating Your Business Idea

By: Elite Legacy Education, March 30, 2018

So you’ve come up with what you consider to be the next breakthrough business idea, but how do you determine whether others will agree with you? How do you decide whether it’s worth pursuing before investing all of the time, money and energy required in starting up a new business? The answer is simple – ask for feedback through market testing.

 

What is market testing?

Now you may be wondering whether you just tell the people about an idea, draw a picture of it or provide a prototype. Well, it turns out that all of these can work so let’s talk a little more about specific ways to conduct market testing.

Market testing is a technique that essentially helps you to gauge the acceptance of your product. At the same time, it provides a feedback loop for you to learn from and potentially tweak your offering based on such information.

 

How do you actually perform market testing?

There are many ways to perform market testing, but there are a couple of questions to consider before you begin. You should determine what you will be selling and where you will be selling it. Each of these are important considerations to ensure you do this both effectively and efficiently.

  1. Selling via digital channels

The following techniques work well if you are selling a product or service online, regardless of whether it’s a digital or physical offering.

The quickest way to gauge whether there’s interest in your idea is to post a digital ad either on Google, Facebook or some other social media platform and see if people will click on the ad. When clicking on the ad, it leads to some sort of landing page or a “coming soon” page. So what can you learn from this? Well, you can test whether your offering will even attract users in the first place. If it does, then you know you could be onto something that warrants further testing. Even if it doesn’t, you should keep testing. You can change the wording or value offering altogether until you find something that people want to click on to learn more.

Now, if you’re selling a digital product or service online, the next step is to create a basic working version of the offering. The goal at this stage is to include only the fundamental capabilities required for the product to serve its main purpose. You will want to let a test segment of users have a chance to explore and experiment with it to determine whether they find it beneficial, as well as hear other comments that they may have.

We will discuss the ways you can test your physical products in the next section about retail testing techniques.

 

  1. Selling via retail channels

In this case, since you are selling in a physical location then you may want to actually get a product prototype in the hands of consumers and test different packaging too. You could go ahead and create either a digital mockup or a physical prototype. Ideally, you will want to ask for the thoughts and feedback from your target audience to make any necessary changes or support any “gut feelings” you had about how to position the product. This process is slightly more expensive than Internet testing, but can provide extremely valuable insight by witnessing users experience your product hands-on.

So remember, before you go ahead and pursue a business idea it’s always a good idea to test it. The small amount of capital required to test your idea in relation to following through with it completely is well worth the investment. This way, you can know that your product is going to sell before you even make the final version!

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Founded in 1992, Elite Legacy Education is a recognized global leader in quality financial education.
Legacy Education Alliance, Inc. is a leading provider of educational training seminars, conferences and services.
Rich Dad Education offers real estate & stock training based on Robert Kiyosaki's book Rich Dad Poor Dad.

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