How to validate a business idea

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Starting and creating your own business is easy if you follow a structured step-by-step process. In today’s world, the immediacy and speed with which business evolves forces you to act quickly, cheaply, and efficiently. And that applied to your business idea, implies that you have to experiment and confirm if your business makes sense from day one. 

To do this, you must confirm that there is a customer who has a problem and wants to solve it, you must confirm that you can solve it, and you must confirm if there is a business opportunity in the market. To validate the fundamental elements of your business, you must experiment quickly and cheaply.

Tips for validating a business idea

Offer solution to the current problem 

Sometimes the reason why companies fail is related to the fact that what they are selling is not solving any problem or need for consumption. Many start-ups are committed to developing new businesses because their products are not selling as they intended. In the corporate world, stories about products that have not been launched correctly are frequent, and emotional attachment or psychological persuasion is not something that is taught in sales training. Whatever the product or service that the start-up intends to place on the current market, the entrepreneur must make sure that the final product is a solution to the existing problem. After launching a product or start-up idea, the market response will be based on the solution provided and the product/service effectiveness.

Gathering perspectives from previous experiences 

Another important point is to gather perspectives from previous experiences of other companies. A business idea in a market where the entrepreneur has no experience does not mean that the founder should give up on the idea. You should, however, look for visions of individuals working in that specific area, specialists in that industry, or another entrepreneur who has previously worked in the sector.

However, many entrepreneurs in the initial phase of the business seek the wrong opinions: friends, family, or other people who have no background in the industry and who may not have a reliable opinion. 90% of the time these people will give the wrong advice because they don’t know the industry exactly to provide the right feedback. However, if the entrepreneur seeks the opinions of other individuals who have already worked in the field, they will be objective in their opinions.

Determine which of your ideas already exist 

You can have an incredible idea and only then realize that there is another company doing exactly the same thing – and the easiest way to check if your idea exists is through an online survey. Let’s say your idea is a gift box subscription service for fish enthusiasts. 

You would search Google for gift box subscription service and see that this service is already offered by some companies. This is not to say that you cannot start a subscription service either, but this information allows you to explore other ideas or, then, look for points to differentiate yourself from competitors. After researching each of your ideas on the internet, you can do an exercise of excluding those that already have robust competition. This is a great way to filter out the most promising projects.

Conduct a proper market research

Now you can buy practically everything online, and the competition grows every day. So, it is essential to choose well what you are going to sell because many sectors are already saturated. Do not try to sell everything to everyone, look for a specific niche, large and attractive enough where you could make a hole and position yourself well. Thus, carry out a thorough analysis of the market you have chosen, which will allow you to know its size and its evolution in recent years.

Conclusion 

The customer needs to understand your brand, your product or service and then want to buy it. When you’re ready to start your business or want to test the market, try to validate your idea first. By doing so, you will understand your customers more quickly and avoid wasting time and money.

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