Test Your Business Idea with LivePlan
Have you ever wondered how to test your business idea? Once you have done your Business Feasibility Study and your Business Plan, your next move is to validate your business idea.
Here is a six-step process that you can follow to validate your business idea and make sure that you are on the right track.
STEP ONE: Choose
Choose one idea to validate.
Super simple, but still so many people miss this.
So many people can’t make up their mind between a few different ideas that they’re considering, and a lot of this comes from really a scarcity mentality.
They’re not really sure that any of their ideas are going to work out or that they’re going to be successful, and so they try to consider several businesses at the same time.
So, start out by choosing just one idea to validate. You’re going to focus this one idea for a short time.
Test Your Business Idea with LivePlan
STEP TWO: Clarify
Clarify the main result that your product creates.
So, you don’t need to figure all of the details of your product.
For now, you don’t even need to create your product you just need to clarify, what is the one main benefit that when someone buys and uses my product they’re going to get.
STEP THREE: Communicate
Communicate to people who want the benefits that your product provides.
You need to find out why they want it?
What is stopping them from having it already?
Even if you don’t have much of a following at all, any real audience, you can still just post on a social media, on each of your different platforms, and just say that you’re doing some market research for a new business that you’re starting or for a new service that you’re thinking to offer.
Mention that you are interested in contacting five people who want to XYZ, who want to get their books edited, who want to have their website designed, who want to learn how to improve their photography skills, or who want to have cleaner carpets in their house, etc.
Not only are people going to respond to these posts because they’re just curious, because since they want this benefit and you are talking about it, they’re hoping that they can get a little bit of free help.
People in general can find this step to be one of the most difficult parts of the process but, it is also the most important. A lot of people skip this step because they think it’s going to be hard. Just make the effort and move forward.
STEP FOUR: Create
Create a beta version of your product or service that you can sell.
For now, you are trying to get your first sales here so that you can prove whether people are prepared to pay money for what you’re selling or not.
DO NOT WASTE TOO MUCH TIME BUILDING THE PRODUCT!!!
You need to create a minimum viable product, MVP.
This is going to be the simplest version of your product you can create that still gives people that benefit you identified earlier on.
In other words, it’s going to be a really simple beta/prototype version of your product, or it’s going to be just a really short online course. It may be just a few lessons that teach people the basics that they need to know to improve their XYZ skills.
Or it’s going to be a really simple version of your editing service package, or it could be the option for someone to have just one chapter of their book edited but for a really low price.
STEP FIVE: Launching
Launching your beta product or service.
After creating your beta product as quickly as possible, then you are ready to launch your beta product, which is step five of the validation process.
First of all, you are not trying to get the maximum number of sales possible. So, avoid going after a big number of sales.
Mainly because it will take more time to get more sales, and we’re trying to get through this validation process as quickly as possible so that you can go on to the process of actually building your business and scaling beyond this.
Also, because if you’re trying to go after the maximum number of sales, you’re going to use different tactics than if you’re just trying to get your first sales really quickly.
And those tactics might not work for you if you haven’t yet validated your product idea.
Hence, it would be better if you focus on getting your minimum number of sales that you need to validate as quickly and effectively as possible.
What is the minimum number of sales?
Many experts recommend a minimum of five sales, but this does depend on how expensive your product is. For more expensive products or services you may need maybe two or three sales.
Keep in mind that these numbers are just guidelines to give you a target to aim at.
Now, I don’t want this video to get too long, but let’s talk about those marketing strategies that are going to work to get your first few sales for at least a minute or so here.
The strategies that will work the very best are going to be very personal and very direct sales strategies.
So, it’s going to be the complete opposite from posting on social media and trying to pitch your product that way.
That’s very impersonal and very indirect.
You’re not actually showing people the product, you’re not talking one-to-one to people.
Instead, we want to do things like, post and ask people to DM you, and then have a conversation in your DMs.
Or email people you actually know.
Tell everyone that you know about your new product.
Okay, maybe not everyone you know, but tell a bunch of people that you know about your new product, even if they are not the right people.
Don’t try to sell it to them, just tell them about this new cool thing that you’re making and ask them to tell you if they know anyone who might be interested, or to share it with anyone who they know who might be interested.
There’s a pretty good chance that you don’t know anyone who is your target customer and wants to buy what you’re trying to sell, but there is a high probability that someone you know knows someone who is your perfect dream customer.
What you really want to do is avoid is using mass marketing tactics as you are trying to get these first few sales.
This is actually really good news, because it means you don’t have to go out there and try to get a bunch of visibility or a lot of momentum, but instead you just need to talk to real people who you already have connections with.
STEP SIX: Being flexible
Being flexible and keeping an open mind.
Don’t fall in the trap of either you succeed or you fail.
You either get those first five sales or you don’t. Either way your validation process can be successful, because you because you either learn that people do want what you’re trying to sell or you learn that they don’t.
And either way you are successfully learning what you were trying to discover, which is, is this the right business idea?
Now, if you’re not able to get those first five sales or in that first thousand dollars really quickly, then of course you can go back to the drawing board, do some more interviews with prospective customers, learn more about them and try again with that same business idea, or you can decide to test a different business idea.
But what you’ve been able to do is cross off your first attempt off your list and know that that was not the right course.
And you can quickly go through and test several different, very different product ideas or you can try different marketing strategies to sell the same one until you find one that works.
But this is going to be much faster than trying to build an entire business and then find out whether or not people want it.
Conclusion:
By validating your business idea, you’re going to be learning so much of very valuable information along the way.
You are going to learn exactly who these people are, why they want your product, what obstacles they’re facing that you can help them overcome.
So, you can have a challenging first thousand dollars, in order words, you can earn your first thousand dollars very strategically and learn a lot in the process. And then, the next thousand dollars can be a lot easier.
