How To Test Your Idea For A New Business

Pink StickiesThere are a lot of people with ideas.

It’s fun to have ideas. They make us feel smart. They give us a little shot of confidence.

Sometimes we even think about putting an idea into practice. Like an idea for a new business.

But then the roadblocks start to come out…

We wonder if the great idea is actually a bad idea. Then we wonder if we’ll be embarrassed if we start something and find out that it can’t really work out.

So most ideas for a new business come and go. Maybe they sprout back up again in the future. Only to be pushed back in memory. It’s safe to keep it a dream than to pursue it.

Or is it…

Let’s say you have an idea for a new business.

Why not test it?

Step #1. Find A Customer

Obviously the big caveat here is that it depends on the type of business you want to start. Maybe you need to start with the product.

But from my experience and my observation, some of the best business ideas usually start with the customer. You find someone willing to pay or to be part of a trial of some kind. You talk to them and see how they react.

Even with something like the iPhone, Apple really started with their customers. They had customers that used computers. Then they had customers that used iPods. The iPhone seemed like the next logical step, but only with all the knowledge they had of their customer and the needs of that customer.

On a smaller scale, start by finding a customer. If you have a customer from another business, approach them and pitch your idea. If you don’t have any customers, start looking for them. Use LinkedIn to connect with people you know and those you don’t know.

Think about who you want to sell to…their position at a company or their position in life. Start approaching people that fit your group and start pitching your idea.

Step #2. Test Your Product

Once you have a customer you can start testing your product.

If your product is just an idea, you can sometimes finagle some money from the customer at the start. Then you can use that money to create the product.

Maybe you’ve built a few unique benches in your wood shop. You find a customer that is willing to pay you to create a new custom model. You do it and deliver it. You gauge their response.

They know that they’re probably getting a lower price knowing that it’s a new product. No guarantee that they’ll love it. And you know that if they do love it that more people like them will probably love it. And you can adjust your price once you have that validation.

Step #3. Assess

With testing a new business, I feel you’re best off by looking for a customer and then testing the product to a point that won’t break the bank or timelines. Obviously those two things can vary depending on the situation.

You want to push the idea far enough to get data that can lead to a good decision, but not beyond a point that will really break you or set you back to where you are today.

You can assess, at this point, how things have gone with the customer. You can learn their reaction to the product. You can see if the product needs changes.

There are all kinds of things you’ll learn at this point.

You could start by finding a non-paying customer. This can be great in some situations. It’s better than investing money into a product with really no idea of whether there is actually demand. But it’s best to look for someone that will actually give you money.

Final Thought

Having business ideas is a great thing. But obviously an idea means nothing. But that also doesn’t mean that you should go around starting all kinds of businesses that require huge investments. There is a great middle ground.

Some of the best businesses started very small. Just one customer. Sometimes one customer before there was even a product or service. Just one person willing to spend money on an idea with the payoff potentially being amazing.

And fo the business owner you get to accumulate data that tells you if the idea is a winner.

One last thought…if you do this you’re going to run into failure. Most ideas run out of steam early. It’s actually kind of weird, but sometimes the “great” ideas are losers and “so-so” ideas are big winners.

You just don’t know…

So test it. Put a little money and a little effort into it. Get some data and see how it goes.

Get over the “shame” of failure. You only need one to work out in order to hit it big.

And do it the right way. Find a customer first. Then invest in the rest of the “business” stuff later when the idea really looks promising.

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