It's a good idea to test-drive your idea for a business as soon as you can. By this time you will certainly have written it down, been through several redrafts, looked at the numbers and explained it to anyone who will listen. However, all of that remains theoretical, and doesn't completely prove or disprove whether your business idea has long-term merit.
You need to invent a way of testing what you have come up with, in a way that limits the damage as much as possible. The internet provides a brilliant way of doing this, effectively for free. In the same way that it could help you to research your market in the first place, it can provide a forum for testing whether it will work in reality. You may know the old joke about academics: it works in practice, but does it work in theory? Here we want to know whether it is going to work in practice, but without going to the expense of setting everything up before we know. Try this online.
- Identify a community who you believe will be interested in your product or service.
- Find them online.
- Explain your business proposition in the simplest terms possible.
- Include everything that enables them to comment, such as pricing, delivery time, and so on.
- Design a short questionnaire.
- Ask whether they would buy your product or service.
- If necessary, offer an incentive to make them reply.
- Choose a sample size that is large enough to be representative.
- If your business idea allows it, consider offering a trial of your product or service.
Analyze the results and make changes based on what you discover. If your business idea is physical, such as setting up a shop, try to replicate the circumstances of early trading without going to the full expense. So, instead of renting premises, hiring staff and getting involved in all the normal start-up costs, set up a stall somewhere and try selling what you can for some trial days. Ask for comment. Experiment with pricing and use what you find as a test market.
So, to summarise, start by thinking very carefully about what you want to do, and take the time to articulate precisely what your business idea is. Then do some methodical research and test your idea on others to gauge customer reaction. Sketch out an initial shape and test drive it in a way that gives you a feel for its validity without exposing yourself to heavy expense or too much delay. If the response is disappointing, face facts and make some changes before trying again.
This extract is taken from Kevin's recently published book – What You Need to Know About Starting a Business
Kevin Duncan – business adviser, marketing expert and author