How to validate your online business idea
Anyone can start a business online, right? You come up with a brilliant idea, build your product or put together a list of products and services you want to sell, get a website up and running and voila… a great business that’s bound to succeed.
Well, if you’ve been at this for a while, you know this scenario is a rarity. In fact, most often business ideas fail within the first year.
Why? Sometimes it’s lack of money, other times it’s an inability to execute the idea. But the most common reason is that wannabe business owners skip important steps.
It’s understandable. Starting a new business online is exciting and you want to get it up and running and succeeding as quickly as possible.
But there’s one key step that you don’t want to skip, and that’s to test your online business idea.
Why is this important? Because if no one’s interested in what you have to offer or is willing to pay for your products or services, then your small business won’t last long.
So how do you validate your online business idea to make sure that there’s market demand for the problem you want to solve? And how can you find out if potential customers are excited about your idea?
In this post we’ll share a few tips and advice on how to test the waters for your new idea without spending lots of time or money.
Solving a problem vs selling a product or a service
Lots of ideas sound awesome while they’re in your head. But as you take some time to think about them and how you can turn them into a business, you may find yourself asking “What was I thinking?”.
So the first step to validating your online business idea is to answer a few questions about it:
- Who is your customer? If you say “everyone,” you are already setting yourself up for a tough time. Be specific. Where do they live? How old are they? How much do they earn? What are their wants, needs, and problems? This guide on buyer personas explains how to research and define the ideal customer you’re trying to reach.
- What problems are you trying to solve?So many people think about the business or product first instead of the problem they want to fix for their customers. Here’s the thing: your customers aren’t buying a product or a service but a fix to their problems. For example, if you’re selling running shoes, your customers don’t pay for the shoes but to fix a sedentary, unhealthy lifestyle. So write down the problems you’re looking to solve so you can then check whether customers also see them as problems. And more importantly, whether customers think they are problems worth solving.
- How does your business, product or service solve their problems?Once you write down the key problems, you can move forward with the product or service as it relates to those problems. How does your offering fix those problems and improves their life? Does it help them make more money, become healthier, more attractive, more productive?
- Who are your competitors? Odds are, if you came up with this idea, someone else has as well. Run a search on Google to see who you’re up against, what they’re offering includes and how they are pricing their products or services.
Talk to your potential customers
There’s nothing more effective at validating a business idea like asking prospects if they’d pay for it.
You have two options to talk to your potential customers:
- Ask people in real life
This is also known as the “Starbucks test” and the idea is simple: go to a Starbucks or any coffee shop, find people who you think look like someone who would be your target consumer for your business concept.
Approach that person and say something like: “I’m thinking about starting a business and I’d love to know your thoughts about it. Could I buy you a coffee and tell you my business idea so you can give me some feedback?”
Try this a few times and see what kind of responses you get.
Now, the key thing here is to not just ask them if they would use your product or service but rather if they’d pay for it.
- Run a survey online
This second option is more statistically significant and bias-free, but it will cost you more money. You can use a service like SurveyMonkey Audience to create a survey and send it to the audience of your choosing.
Make sure you put together a few well-thought out and easy-to-understand questions about your idea (the pain it’s meant to solve, the ways in which it functions as the fix, and so on) so you can determine whether it might take off.
For example, here are a few questions you might consider asking:
- “Do you have this problem? How often do you face this problem?”
- “Have you tried using any other products or services to help you solve thit problem?”
- “How likely are you to buy this product or service? What convinced you to want to buy it?”
- “Would you pay £XX for this product or service?”
Build a landing page to validate your idea
If you’ve identified the problem that your business, product or service can solve, and if the people you’ve talked to responded well to your idea, then go ahead and build a landing page where you present your offer.
This can take a bit of time and effort but it’s an effective way to validate your online business idea.
Here’s what you’ll need to do:
- Create a “coming soon” page where you describe your business and compel people to sign up to your mailing list
- Advertise it to build awareness and attract as many potential customers as you can
- Analyse the results to see if your idea gains traction
- Follow up with your prospects
- Create your website or page
The great thing about landing pages is that you don’t actually need to have a product or service ready. Just make sure to inform visitors of the impending launch.
Another great thing is that with our Website Builder you can get a page or a website up and running on your launch break, even if you don’t have any technical skills. All you need to do is to choose a plan which also comes with a domain, business email, SSL certificate and free web hosting.
You’ll also have access to lots of free templates so you can choose the one that best fits your business idea.
Now, don’t focus too much on the design of the page or site. Instead, make sure that you use the right words to communicate how your business will benefit your target audience.
You can find lots of useful tips and advice on writing content that compels users to take action in these two blog posts:
- Six tips to write compelling product descriptions that sell
- How to fix these six common copywriting mistakes that can kill your sales
The idea is to entice as many prospects as possible to share their email address with you so that when you finally launch your online business, you can email them the news and entice them to buy from you.
- Advertise it
Once your website is live, the next step is to attract visitors to it.
The fastest, most effective way is to run a paid Google Ads campaign. This allows you to pay for visibility in Google’s search engine results. So when your prospects search for keywords related to your business, they’ll be able to find your business at the top of the search engine results.
If you’re not familiar with Google Ads, and don’t want to learn to run them yourself, you can use PPC Management from 123 Reg.
- Analyse the results
Once you get a decent amount of visitors, take a closer look at the results. Are people interested in your offer and signing up to your mailing list? If they are, then it’s likely your business solves a problem.
Now, if the number of sign-ups is low, don’t give up just yet. Try to make a few changes to your offer first to make it more enticing. Tweak the copy, change the images or the text on the call-to-action button. Read this post to learn how to create powerful calls to action to entice more visitors to take the action you want them to take.
If on the fourth or fifth try you still get few to no sign-ups, you might want to try a different idea.
- Follow up
Follow up with those who’ve subscribed to learn whether they’re really interested in buying from you and if there’s anything you can do to improve your offering before your launch your business online.
It’s not easy to validate a business idea. But it’s also not rocket science, which means that anyone can do it, regardless of technical skills or budget.
If you use the tips and tactics in this post and have a little patience, you should quickly find out whether you have a smashing hit or a complete flop. Best of luck!