Do you have a big idea? Or, better yet, THE big idea? It just might be the way to kick off your best year ever.
Maybe it’s a brand-new product or service that you’re certain your target market needs and wants. Perhaps it’s a line extension that will further enhance your present offerings. Whatever it is, in your estimation it seems to be a “can’t miss” proposition.
But, because we live in the real world, tempting as it might be to dive straight into building (or changing) your website and developing new marketing campaigns, it’s a much better idea to begin with thorough testing. After all, even those “can’t miss” ideas have been known to fail from time to time.
Viability testing is crucial. It can prevent you from spending too much money on something that won’t return your investment in time or money, despite its seeming promise. On the other hand, if it is on the right track, testing can provide an opportunity to discover any potential weaknesses or obstacles that you’ll need to overcome before you successfully go to market.
Testing also ensures that you can confidently:
- Pitch your idea to investors or lenders
- Share your vision with employees and stakeholders
- Better understand both your audience and competition
Here are some important checkpoints to ensure your concept is strong and viable:
Step 1 – The Feasibility Check:
A feasibility study allows you to examine whether your product or service is technically and financially feasible and whether a market actually exists for it. One important facet of this study is to help determine how many customers you would need to be profitable.
As an example, once you factor in equipment, supplies and labor costs, you may discover that it will take an average of 100 jobs a month to make your cleaning business a success. However, if the number of people in the area who are currently seeking your proposed service falls significantly below that, it obviously wouldn’t be feasible.
And how do you reach a decision on whether there are enough potential customers in your locale? First, clearly define your target market and the geographic area you could realistically cover. Next, research your successful competitors (if there are any) and, if possible, the type of customer base they have developed. Look for answers to critical questions: Do those competing companies appear to be growing? How are they marketing, and how frequently? Most importantly, can you make your offerings distinctive and set yourself apart from those other businesses?
Are there would-be customers who are overlooked by the competition, or those who might want something different from what they are offering? Finding that niche could be a great way to grow.
So, by the end of your feasibility study, you should:
- Know what you need to spend and earn
- Confirm what you’ll need to charge and the total customers you’ll need per week/month
- Be able to identify your target audience and where they are
- Have a good idea why your competitors have been successful
- Determine how you can differentiate yourself
Above all else, make certain that you have solid potential for continuity. Your idea may be great, but it may be unprofitable in the long run to go all in on a trendy product that might only be a hot commodity for a few months.
Search sites like Google Trends to determine whether similar products or services – if they exist – were strictly seasonal, or had gotten increased customer attention primarily during specific times of the year in the past. It could serve as an important guidepost.
Step 2 – The Reality Check:
Here’s the reality part – even if there appears to be a large potential audience for your product or service, there’s simply no guarantee that people will buy it.
You may be convinced that everyone would love a cheaper version of the pastries sold at a popular local bakery. In truth, though, when you start talking to their customers, you discover that they don’t mind paying a higher price for those goods because the product quality justifies it, and additionally, that bakery’s location and reputation is appealing. In this case, it’s safe to say your lower-priced products are unlikely to pass the “real life” market test, no matter how tasty they might be.
Market research (the “check” part) can give you more accurate insight into what customers really want and need. There are various ways to collect this information. One reliable way is by using online resources such as consumer trend reports from companies like MarketResearch and Nielsen; you can also increase your chances for success by digging deeper into these other options:
Surveys and polls: You can host surveys on social media sites and forum groups to gain insight into specific interests that people in your market may have. Bear in mind, however, that if your brand is not widely known, it may be difficult to get a truly representative sample.
Competitor information: If you find reviews and customer testimonials that your competitors receive (for example, on Yelp), pay close attention to them. The positive and negative responses may provide inspiration for additional improvements or refinements you can make to your own products and services.
Face-to-face contact: If you already have existing customers or a network of people that you can discuss your business with candidly, they may be able to further inform your ideas. If there’s room in your budget, professionally-administered focus groups can be a real plus, too.
Step 3 – The Sales Check:
Are you increasingly confident, based on what you’ve already learned? If so, it’s time for the last – and most revealing – step in testing your product or service…taking the leap and actually trying to sell it (assuming that you are sufficiently prepared). This will not only confirm, or contradict, the information you’ve garnered, but might also help you discover that there’s still a need to make some last-minute tweaks before moving on to mass marketing.
There are various ways to accomplish this goal. One available low-cost option involves selling your products or services through social media. This ensures that you can start finding customers immediately, without needing to build a website. However, it’s also possible that you may need to invest reasonable amounts in social media marketing to make this work.
You could also try to sell products through online marketplaces such as eBay, Etsy or Amazon, which will give you a pretty good idea of how much demand you can expect.
Based on customer feedback, if you’re reasonably assured that your venture can be profitable, you can then expand your reach by utilizing sales strategies that align with your marketing budget and your target audience.
Perhaps you’re not quite ready to sell actual products (or have everything pulled together that you’ll need to provide the services you envision). But, if you have an existing website, you could create a landing page in the interim. That way, customers can post their email address to show interest or receive additional information. The more emails you get, the more confident you can be about taking your idea to completion.
Regardless of how you choose to test, you’re certain to receive important information that can help you to decide how or – more importantly – if you want to proceed.
It’s easy to get excited by ideas, but if you’re going to commit the time and energy it takes to bring them to fruition, knowing in advance that they can work sets you up for greater success and a lot less stress.
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