Some of the most-known business owners and entrepreneurs have admitted that at some point in their careers they registered setbacks and even failed. And while entrepreneurs perceive failure as a normal part of both life and business, most of them are not really prepared to fail gracefully.
Do you consider you have come up with a great business idea that could potentially become the next app millions of users will use or a social media platform that will skyrocket into the atmosphere? Maybe the business idea evolved from a large number of brainstorming sessions or maybe you had some divine inspiration and you think you’ve managed to catch lightning in a bottle. And while you may believe that the business idea you’ve come up with is outstanding, you absolutely must test it before actually launching your business. Worst case scenario, if your idea isn’t as great as you thought, at least you will save up both your time and money.
In this respect, in all business schools, entrepreneurs are taught to conduct a performance analysis, create some big attainable goal and shift the focus directly on it when testing their business idea.
Instead of speeding towards achieving the goal, entrepreneurs should slow down and alter the course in order to be able to achieve business success. Still, should the business idea fail, at least it will do so in an efficient manner.
Here are some simple yet effective ways of how to test if your business idea is as great as you might think:
1. First of all, you shouldn’t rush and launch your business. Before opening the doors for business, it’s best if you test the business idea beforehand. Even if you already have a handful of business ideas, you shouldn’t rush into writing a business plan or recruiting a team. You should probably wait a couple of weeks and see which of the ideas you’ve come up with manage to stick with you.
Some of the most successful entrepreneurs have stated numerous times that they avoid moving forward if they don’t strongly believe that the business idea will become a red-hot business. Following this, you should build some sort of a prototype of the product or service you will provide and conduct some marketing research.
2. Run the business idea by a small group of critics. Present your business idea to a small number of people and see how they react. Or, if you have already designed a product prototype, you could present it to your potential target customers. You should be looking for honest and straightforward feedback.
When asking your potential customers for feedback and their honest opinion regarding the prototype or test service, you need to identify whether there is a market need for what you will provide. You also need to determine whether there is a real demand for what you will provide or if only a handful of people would actually be interested in it.
Some business people suggest you to identify potential customers whom you know for a fact to be critical and skeptical. Whether you will choose random customers or friends and family who only see the empty half of the glass, you need to handpick your test group before asking them to pick your business idea apart.
3. You need to adopt a goal-oriented mindset. Profitability should be your main goal. Small business enterprises should always adopt the profitability mindset. This means that you should always begin by driving towards attaining this status. Consider the quickest way your company is able to turn a profit even though this means that you will have to slightly diverge from your main goal. Usually, when entrepreneurs and business owners decide which set of resources they are willing to risk so that the business idea turns into an outstanding company, some of the best entrepreneurial minds of our time have found that business owners should allocate 65% of the capital towards the drive to become profitable, 25% for resources that include your staff and 10% towards scale.
4. Transform a business idea that flopped, into a failure efficient business idea. If you find that the business idea didn’t become profitable in a year, you should regard it as a failure, but not classify it any kind of failure, rather an efficient one. Depending on the resources you possess and how much you are willing to invest in your company, the time frame of any business will be different. And I’m sure you’ve seen this countless times. Business owners will spend five, ten or even twenty years trying to implement their business idea, only to realize they wasted precious time and resources.
5. Consider tweaking your business idea so as to suit the test market. If the feedback you received from your potential customers isn’t what you’d hoped for, see what aspects about your prototype product or test service can be altered or tweaked so that it will meet the need of the vast majority of your future target market. If you still think you need more candid feedback you could set up an email survey, a social media page or a test website. This is a great way of testing the interest of potential customers before spending your time and resources on a product or service by tapping into online audiences.
6. Don’t hurry. While diverging a bit from your original end goal, setting some clear as day goals regarding the amount of capital, time and the staff devoted to the business, you will manage to register a high-degree of stability even though profitability will be achieved at a slower pace.