Embarking on a new business venture is thrilling, but before you dive into any big investments in time and money, you need to ensure your idea can float. If you’ve been following our 28-step start-up guide, you already have a good understanding of your market and have crafted a unique offering. The next crucial step is testing. This is a lot less daunting than it seems, think of this step as conducting mini tests. As with all good tests you have a theory, you test the idea, and you evaluate the results.
The Pitfalls of Premature Investment
Traditionally, the business journey begins with a plan and a plea for funding. But this path can lead you into the murky waters of debt for a business that hasn’t been proven yet. There’s another way—testing. It’s like checking the temperature before taking a dip. This savvy approach ensures you’re not diving into the unknown.
Embracing a Test-First Philosophy
Falling in love with your ideas is easy, but love can be blind. That’s why numbers and real-world results are your new best friends—they’re the ones that tell it like it is. Before you pen that business plan, create a course or splash cash on a website, pitch your heart out and see who bites. It’s the market’s way of giving you a thumbs up or down.
The Art of Selling Before You’re Ready
Validate and fund your journey before you’ve even set sail. Let’s look at the ways you can secure those crucial first sales.
- Deposits for Future Services: Imagine you’re launching a cleaning business. Only book initial cleaning slots for clients who pay a deposit. This not only validates the demand for your expertise but also brings in early revenue to help with start-up costs.
- Pre-Selling Courses and Workshops: It’s very common in the education and training sector to pre-selling spots for an online course or workshop before it’s even been created. Create a course outline and offer early-bird pricing. This method has been a game-changer for many online educators and coaches, allowing them to gauge interest and tailor content based on the profiles of early registrants.
- Crowdfunding for Product Launches:Crowdfunding platforms are the modern-day pre-sale arenas. By setting up a campaign for your product, you’re not just asking for early purchases; you’re inviting customers to be part of the creation story. The success of many tech gadgets, from smartwatches to home automation systems, owes a great deal to the initial faith and funding of early backers on platforms like Kickstarter or Indiegogo.
- Pre-Booking for Experiences:For service-based offerings such as a new restaurant or escape room, offering the chance to book experiences ahead of opening can be a great way to generate interest and secure early revenue. It can be as simple as selling tickets to an opening night event or as elaborate as a VIP membership with exclusive benefits for the first year of operation.
- Pre-Launch Subscriptions: Subscription models aren’t just for magazines and music services. Any business that provides a recurring service can benefit from pre-launch subscriptions. For example, a local farm-to-table delivery service might offer a subscription for the first harvest of the season at a reduced rate for those who sign up and pay before the planting season begins.
- Sample Sales for Physical Products:For those with physical products, consider a sample sale of your goods before the full range is manufactured. This could involve selling a limited quantity of prototypes to gauge customer reaction and get real-world use feedback. This approach is particularly effective in the fashion industry, where the allure of exclusivity can drive early sales.
Developing a Selling Mindset
Selling might not come naturally to everyone, but it’s the pulse of your business. It’s simple: no sales, no business. Get comfortable with the ask. When someone opens their wallet, it’s the market’s way of saying, “You’ve got something here.” And that’s when you know you’re onto something viable.
Conducting your mini test
The goal here is about connecting with a select few who represent your ideal customer base.
Use Your Network: Start with your own circles. Reach out to friends, family, and colleagues who might fit your ideal customer profile or can introduce you to someone who does.
Use Targeted Social Media Groups: Find where your ideal customers are having conversations online. Local area Facebook groups and business groups can be a great place to test.
Participate in Community Events: Whether it’s a local fair, a chamber of commerce meeting, or an industry networking event, use these gatherings to share your idea with potential ideal customers or those who might have contacts that are.
Pitching
Focus on the Problem: Start your pitch with the problem you’re solving. This sets the stage for discussing your idea as a solution.
Personalise Your Approach: When speaking to potential testers, tailor your pitch to address their specific needs and how your idea can make a difference in their world.
Storytelling: People connect with personal stories, so share what inspired your idea. It makes the conversation less about a transaction and more about a shared experience.
Seek Genuine Feedback: Make it clear you’re looking for honest input, not just a sale.
Be Prepared to Listen: The pitch isn’t just about talking; it’s about listening. Pay close attention to their reactions and questions—they can offer valuable insights into how your idea is perceived.
The Evaluation Process
After you’ve put your business idea to the test, it’s time to step back and evaluate what you’ve learned. This isn’t about giving yourself a pat on the back or a hard time—it’s about objectively looking at your findings to decide your next steps. With the Business Idea Evaluation Worksheet in hand, you can methodically assess the feedback and data you’ve gathered.
Here’s how to use the worksheet to evaluate each aspect of your business idea:
Customer Response: Start with the gut reaction—did people light up when they heard your idea, or did they need more convincing? Fill out the Interest Level and Understanding sections to capture how your pitch resonated.
Product-Market Fit: This is about ensuring your idea isn’t just great, but right for the market, at the right time.
Pricing Feedback: It all comes down to value—did your potential customers feel like they’d get their money’s worth? The Value Perception and Willingness to Pay sections will help you understand if your pricing strategy hits the mark.
Sales Conversion: This is where interest converts to action. The Closing Ratio and Follow-Through sections will reveal not just who’s interested, but who’s ready to commit.
Operational Feasibility: Can you deliver what you’re promising efficiently and effectively? The Resource Assessment and Process Efficiency sections will help you look at the logistics of bringing your idea to life.
Feedback Analysis: What’s working, what’s not, and why. Capture the standout praises and the critical feedback that can guide your refinement process.
Personal Reflection: Finally, check in with yourself. Your passion and the business’s fit into your lifestyle are critical for your long-term happiness and success.
Each of these areas is crucial for a holistic view of your business idea’s viability. By addressing them one by one, you’ll gather a complete picture that will help you decide confidently whether to proceed or pivot. Remember, evaluation is not a one-off event but a continuous process that will steer your business toward success.
Don’t just start a business—launch one that’s backed by data and tested.
Evaluation Worksheet
This complimentary resource for Duport customers is tailored to guide you through a comprehensive evaluation of your business idea, ensuring every aspect is scrutinised.
It’s user-friendly, actionable, and crafted to eliminate uncertainty in your business decision-making process.
Get Started with Duport—empower your business with the tools and support to thrive!
