Is My Business Idea Viable? How to Find Out
A small business can start with something as simple as a great idea. It is important, however, to bear in mind that a great idea alone will not lead to business success. Small businesses and startups naturally start in major cities, which provide them with a huge potential customer base. Challenges will undoubtedly arise, but before you start it’s a good idea to get a sense of how you might fare. With so many competitors in the same market, how do you find out if your business idea is viable? Here are a few ideas that aspiring business owners can use to determine if their idea is likely to succeed.
Understand Your Market
In order to have a successful business in a particular market, you should understand that market. Say that you’re starting a company in Los Angeles. It helps to be an active participant in all aspects of life there. Get to know the people; after all, this will be your potential client/customer base. Do life in your market: go to different events around town, go out at night, etc.
Quantify Validation Goals
It’s important to be able to validate your idea. Even better is being able to quantify that goal. Kim Kohatsu of Charles Ave Marketing suggests, for example, that you should try to see how many pre-orders you can muster for a product, or run a giveaway for your new product or service. She wisely adds, “If you can’t get people to sign up for a chance to win it for free, chances are slim that they’ll pay for it.” Of course, this will look different for every business, so get creative and think of ways that will best quantify your goals.
Get Feedback From Trusted Sources
Thousands of new businesses pop up weekly, so it’s imperative that you conduct market research. Something else that can prove to be incredibly valuable is sharing your idea with trustworthy sources, like a mentor. Market research has its limitations, especially if your idea is a little unconventional. The insightful connections you make can help you navigate the road to success.
Experiment and Adjust
Research and measuring market demand is valuable, but it’s not the same as going out and doing business. As Sid Mohasseb of Venture Farm puts it, “Asking people if you would pay for something and having them actually pay for it are two different things.” Try things out by experimenting on a small scale, learn from that experience, and then adjust.