Think you have a great idea for a new product or business and are ready to dive into entrepreneurship? Step on the brakes. Although you can never know with 100% certainty whether your business idea will be successful, it’s important to make sure there is a demand and market for your product or service before you invest time and money into its development.
Evaluating the potential of your business idea doesn’t have to be expensive. Here are 6 low-cost ways to test your idea’s chance of success.
- Ask Questions and Analyze the Competition
You’ll need to have a solid plan for your business venture to measure its demand. Before diving any deeper, ask yourself some key questions and refine your strategy based on any issues identified in your answers. What problem does my product or business solve? Who are my potential customers and what do they want? How big is the current market for my product or service? What resources do I have to bring my idea to life?
You should also ask yourself - who is the competition and what are they doing? Analyzing the competition will help you determine what makes your idea unique, what’s working for similar businesses, and what you can do better. Use this research as an opportunity to find your unique selling proposition — what will make your business stand out from the crowd.
- Use Market Research Apps and Surveys
Conducting market research used to mean big bucks and a lot of resources. Now, app-based market research tools make gathering insights quick and cost-effective with the ability to offer fast feedback from a broad database of customers. You can also use affordable software tools such as SurveyMonkey to create in-depth surveys that will help you understand the market and consumer preferences. SurveyMonkey offers over 100 expert templates so you don’t have to worry about properly designing your survey and you have the option of sending it out via email, mobile, chat, web and social media.
- Tap Into Your Network
Do any of your friends, family members or business contacts fall within your target market? Develop a list of questions and interview each of them to get valuable insight about your potential customers’ wants, needs and preferences. Be sure not to ask any leading questions and be as straightforward as possible.
The downside of friends and family is that they will likely be a little biased in their responses, so it’s also worthwhile to survey a group of “friends of friends”. You can send them a quick questionnaire to complete via email to simplify the process.
- Show Off Your Product
Create an inexpensive product prototype and get it in front of potential customers. Seek opportunities to have a presence at trade and craft shows, local fairs, and other events in your area that have a built-in audience. You can also approach local businesses that attract the right demographic to see if they would be interested in placing your product in their store on consignment. There are also websites such as eBay and Etsy that allow you to sell your product for a minimal fee.
- Try Google AdWords
By utilizing the cost-effective power of Google AdWords, you can discover demand for your business idea and get insight into how to best market your launch. Determine which keywords people would use to find the product or service you want to test. Try different variables and be broad so that you capture a wide variety of potential searchers.
Make sure the test for your ads highlights the benefit of your product or service and how it is going to help the buyer to accurately gauge interest. You should also be specific about the geographic areas you want to target to avoid skewing your results. For example, if your product will only have distribution on the East Coast, then you should limit your Google AdWords campaign accordingly.
- Use a Crowdfunding Site
Setting up a crowdfunding campaign on a website such as Kickstarter is a great way to validate your product or business idea, while also raising money! Since Kickstarter launched in 2009, 13.9 million people have pledged more than $3.39 billion to bring Kickstarter projects to life.
Everyone from new entrepreneurs to established companies are using the platform to gauge demand for new products and decrease the risk of rolling something out that there may not be interest in. If people pledge to support your idea, then you already have a database of future customers and their feedback can be used to make product tweaks and improvements.
Once you’ve tested your idea and are confident it’s something the world wants and is ready for, check out the range of business loan solutions Lakeland Bank offers. Our Customer Service Team can be reached at 866-224-1379.
