So you want to start a business.
Congratulations, and welcome to entrepreneurship!
Having a business idea is the first step in making your entrepreneurial dreams a reality. Though, you may have a flurry of questions in your head about getting started, being successful, or if your idea is any good in the first place. You may be looking for validation on whether your idea can actually become a viable business, and ultimately, make you money.
Why Validating Your Business Idea is Important
Many people develop a business idea or offer and force it to market, often skipping many essential steps in the development cycle. This leads to underwhelming launches, poor customer response, and an unwillingness to adapt, due to lack of knowledge of alternative solutions.
If you’re going to start a business, you’ll want to do it the right way. Validating your business idea involves thoughtful consideration, research, and a bit of business savvy. But, with these 7 steps, you will be well on your way to turning your idea into reality.
7 Steps to Validating You Business Idea or Offer
Step 1: Identify Your Niche and Their Problems
There are two parts to this step. The first part is identifying your niche. This means identifying exactly who you want to serve. It’s best to approach this from a perspective of identifying the most ideal options. This will allow you to create your business from a space of personal alignment. Who’s your most ideal client? What industry or niche do you feel most passionate about supporting?
Once you’ve identified the niche you want to support, you’ll want to begin exploring the niche and identifying the problems that industry or consumer faces. You’ll do this through market and customer research.
What does that mean? In simple terms, it means talking to a lot of people in that industry to find out what their most common problems are. Remember, you haven’t created the offer yet. These are exploratory conversations that will inform the design of later steps. The goal here is to gather as much information as possible about the industry you aim to support. You’ll want to spend as much time as possible in this market and customer research phase.
Step 2: Theorize a Solution
In this phase of the process, you’ll review your market and customer research and begin to theorize potential solutions for your industry or niche. This will be informed by your previous conversations, so keep good notes when doing research! You never know when that one fact may help your ideal client with a problem they currently face.
Step 3: Validate the Solution with Research
At this point, you have a nuanced understanding of who you want to support and their biggest problems. With this awareness, you’ll have theorized solutions. At this point, you’ll want to start to talk with your industry contacts to validate the solution as well as begin the process of researching your solution and how you can frame this solution to best support your ideal client.
In this stage, it’s important to talk with as many people as possible about the potential product or service (with respect to your intellectual property). These conversations will highlight objections as well as showcase strengths and flaws.
If you have a product, this is often where beta testers and early adopters will be given early access for feedback.
Step 4: Create Your Offer
Once you’ve validated your solution, you’ll want to create an offer informed by your ideal client and their problems. Your offer will speak directly to the self-interest of this ideal client. Remember, if you cut corners in the earlier stages, you may not develop an offer that speaks to the needs and problems of your ideal client.
Take the time to follow the process to this point. Creating an offer without value to the market can be time-consuming and expensive.
Step 5: Test Your Offer on Your Market
In this stage, you’ll want to take your offer to the next round of beta testers, or a small segment of your market.
Encourage feedback and listen when you receive it. You’ll learn about the functionality of what you offer as well as the relative value the market places on what you offer.
This feedback will allow you to refine and focus your offer more if needed, so be grateful when you’re lucky enough to receive it!
Step 6: Analyze
Analyze, analyze, analyze! By this point, you’ll have quite a bit of the process on record, and may have data to analyze related to the performance of what you offer. Be focused and detail oriented in your analysis. You never know what key point, piece of information, or data may hold the key towards maximizing profit, efficiency, or refining your offer.
View the feedback and data you receive as an opportunity for growth.
Step 7: Adapt
In a perfect world, there’s nothing left to do for this step. However, we all know that business and life can often surprise us. As you expand your offer to your market, you’ll want to pay attention to the data and feedback you receive with a willingness to adapt and pivot based upon the information you receive.
This may not be necessary, however, many entrepreneurs and business owners become so fixated on their solution that they are unable to see beyond their personal bias. If that’s the case, that short sightedness can often lead to the downfall of a project or company.
Your willingness to adapt where appropriate will allow you to survive the lifecycle of your market.
Got a business idea but aren’t sure where to get started? Leave your questions in the comments below!