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Test Your Business Idea Economically

by Jim Martin

By Caron Beesley

You have an idea for a new product or solution you think will be a sure-fire hit. Don’t be in too much of a hurry. To find out if your idea has traction, you need to test it. This often-overlooked step can help you refine your offering and ensure a successful introduction strategy. Before you write your business plan, assess the strength of your product. Here are some inexpensive ways to do so.

1. Find your Idea’s Fatal Flaw. SCORE offers some great tips on how to validate your idea. It may have one, two, or multiple flaws. Ask yourself: “What am I missing? What possible pitfalls am I not seeing? How might my competitors respond? What…makes me think that my business or product idea will work when…others don’t?” Once the flaws have been identified, find ways to fix them.

2. Test Outside your Network. Testing your idea on friends and family is not enough. They will always be overly optimistic. Focus instead on those whose opinions matter - your target market. Crowd source your market research. Form a focus group, either virtually or in-person. Advertise for volunteers, then provide them free test samples of your product. Or assemble a focus group in one place and have them try out your product, preferably alongside a competitor’s version, to see what results you get. If you don’t yet have a physical product, ask prospective customers what they want. What’s missing in their market? What does the competition not provide? If your solution was available, would they take advantage of it?

3. Tweak It, But Not Too Much. As you test your idea, you’ll get lots of feedback that can be overwhelming. This is especially true if you’re seeking investment or pitching a concept or prototype to a new client. You may be tempted to modify your idea until it becomes so customized to the needs of one customer that you lose the rest of the market. Instead focus on the factors that translate well across several markets or customer profiles. There’s plenty of time for custom versions of your idea once you make a profit that can support diversification.

4. Perfect your Elevator Pitch. Can you pitch your idea in 30 seconds or less? How does your product serve your customer? How does it surpass the competition? People buy outcomes, not products. You’ll need your elevator pitch for the life of your business when you’re talking to investors or customers, manning a trade show booth, or briefing a marketing agency.

5. Create a Mini Version of your Idea. Creating a full-blown version of your idea can be expensive. If you run a hair salon and want to start a massage therapy business at a new location, you could test demand by dedicating a small area of your current site to the new service on a part-time basis. If your product can be demonstrated without a final, complete version (i.e., software, music, literature, and so on) beta test it on prospective customers.

6. Run Dummy Marketing Campaigns. This is an increasingly popular and effective way to test market demand. Promote your idea for a product or service as if it’s already on the shelf. One way is by creating a landing page to promote the idea. This could be hosted on your website or on a new domain. Include sales information and key product features and applications. Include a “Buy Now” or “Learn More” button. Since you have nothing to sell yet, take the site visitor to a page that says the product isn’t available yet, but those who register will be notified first of its launch. There are several ways to promote the page. Run an email marketing campaign to existing customers. If you have the budget, invest in Facebook ads, Google Adwords or Bing Ads targeted to your location and demographics. The click through data can also provide insight into whether your idea has demand!

7. Look for Other Opportunities. When you’re testing your product, always remember it’s your money. Watch for other low cost ways of obtaining feedback. Pass out samples at a local youth sports game. Buy a stall at a local flea market. Show up wherever potential customers might gather. Spending time now is far better than losing money later. Demonstrate the creativity that led to your idea by finding creative ways to test its appeal.