Some of us have had an entrepreneurial spark ever since we were kids. Let’s be honest, some of those ideas are fantastic, helpful, and innovative. While others are off the wall… literally.
What about today? Are you still asking the big questions? Do you still have the impulse to innovate? Your first (grown-up) business idea has the potential to change your world, but first you’ll need to make sure it’s a business idea worth pursuing.
Will My Business Idea Work?
You’ve cycled through dozens of creative ideas and finally landed on a vision for your business. Now what? Here are three steps to make sure, or validate, your idea will work after you launch it:
1. Concept. Brainstorm every possible version of your business idea. Practice writing down what some of these ideas could look like in the real world. One idea may only involve selling online, while other ideas involve opening a physical store. Some ideas may lead you to hiring employees and growing quickly, while other ideas don’t need you to hire anyone. When you have a bunch of these ideas outlined, consider what your favorites are and why. Keep the concept that you like the best, the business that you can actually see yourself running in the near future, and use that to start writing your business plan, (check 7 Steps to Start a Business in Oklahoma for tips). File the rest away so you can refer back to them if needed.
2. Market. Get to know the people who will be buying your product or service. These are the future customers of your business, your target market. Discover what they struggle with, what they talk about, what could make their lives easier, and what they wish could be different. Write all of these observations down and compare them to your concept. This may lead you to adjust some things in your business plan.
3. Test. Now that you really understand your concept and you have a detailed description of your market, it’s time to test if they go together well. You need to get your product or service into the hands of these potential customers and gather their feedback, criticism, and comments. Even if it’s just talking with someone who might be a customer over a cup of coffee, this step and their feedback will be the key in knowing if your business will work. It’s also good practice because you’ll want to continually engage your customers, gain their feedback, and make improvements constantly after you launch your business.
Wisdom From Oklahoma Business Leaders
Business owners from and around Oklahoma know all about this. Websites4Good developed a survey on How To Validate A Business Idea and asked those savvy folks to share their expertise about developing a concept iteration, researching your market, testing, and much more.
In their own words, here are five tips on how to make sure your business idea will work from Oklahoma’s own business leaders and entrepreneurs:
Tip 1: Take time to develop your idea.
Donʼt rush the process. Spend the time to iterate on every idea, because you donʼt know which nugget will lead to success. We all love our own ideas, but donʼt be afraid to kill the bad ones. - Devon Laney, CEO at 36 Degrees North
By “iterate,” Devon is saying that practice makes perfect. Rehearsing each idea will help you tell the gold “nuggets” from the fool’s gold. As he recommends, take your time with this step. Flesh out even your craziest ideas and then cut out the ones that aren’t workable for you. Cutting out the unworkable ideas may be difficult, but crossing them off your list is worth it. Each time you do that you’re narrowing down your future business plan.
Tip 2: Get to know your audience.
The best market research is talking to and observing your target customer—the people you are trying to serve. You have to know them and know what they are struggling with. Some of that can be learned online by getting involved in groups and forums where they are spending time, but nothing beats real conversations.
And don't ask if they like your product or service; most people are too nice to say no. Ask where they need help, what would make things easier or better, how they are solving the problem currently, and what they wish was different. - Jessica Kinsey, Founder/Social Impact Strategist at Prodigy & Co
Step two, after you’ve developed your concept, comes market research. Turns out that “the market” for your business is a population of real people. Jessica encourages you to actually go meet them. You can easily do this through online forums, social media platforms, and by sharing surveys. As Jessica says, though, “nothing beats real conversations.” We agree. Go to those neighborhoods, cafes, and shops. Attend local events. Be intentional about meeting people and get to know them.
However you do it, ask about the realities of their life, the struggles they battle, the problems they’re facing, and the hopes they dream. Collect these stories, compare them to your idea, and reference them often as you launch your business.
Tip 3: Narrow your target audience.
If your target market is too broad, your product or service won’t be narrow enough to meet the needs of your customers. Focus on defining who your customer really is. Where do they live? What education do they have? How old are they? What is their financial situation?
To do this, business owners will often create a “profile” of who a typical customer is. If most of the customers are women, the profile will be a woman. If most of the customers are in their twenties and thirties, then the profile will be in their late twenties. They may even name the profile, so a woman in her late twenties might be named Ashley. Then they keep going and describe “Ashley” based on the average traits of their customers: what she likes, where she lives, how much spending money she has, and so on. Now the owner doesn’t have to think about a wide range of customers or survey a large audience every time they need to make a decision—they just have to ask, “what would Ashley think about this?” - Jacqueline Isaacs, Partner at Bellwether Communications
Jacqueline reminds entrepreneurs that while the marketplace is full of real people, you are only doing business with a select group of them. Having an ideal customer in mind can prove helpful. Harness that info into a profile, a fictional person who embodies the characteristics and lifestyle of your ideal customer.
You can use this to help focus your efforts in almost every area. Write an email newsletter like this person was the only one reading it. Craft social media posts like this person was going to see it. Design your website as if this person was going to click on it. Now when someone who is similar to your profile comes across your business, they will easily connect with you because you understand them.
Tip 4: Get to know your industry
Dreaming gets things started, doing gets things going in the right direction. Speak with others in your industry. Don't ask for what they would do (although that's helpful). Ask them what mistakes they made. Ask them what they wish they didn't do. Be sure to be uniquely familiar with your market, having done the necessary research and spoken to the necessary people (this could even be reaching out over email or coffee). - John Woldum, Marketing Director at NEFF Brewing
You dreamt up ideas in phase one (concept), and you got in touch with the life experiences of potential customers and created a detailed profile of an ideal customer in the second step (market). But did you know that you can also talk to the people who are already doing what you want to do in the industry? We can call this phase 2 ½, it’s like the flip side of market research.
John recommends that every business hopeful meet with business owners in their industry which you can do by email, a phone call, a video chat, or coffee. Don’t expect your competitors to give you solutions to your problems, instead you can focus on learning about their successes, failures, and missed opportunities.
Everyone in your industry shares the same goal: to help people through a product or service. In today’s expanding market, it’s advantageous to be complementary to one another, not exactly the same. These conversations can help you learn the nuances of your market, challenges with your audience, and gaps in the market where your business can step in. Like John said, “doing gets things going in the right direction.”
Tip 5: Challenge your own idea
Test, test often, and always be willing to change. Don't be married to your ideas and methods. Just the end result and the problem you are trying to solve. - Tim Newton, Real Estate Investor at 61:4 Properties
The last step to make sure your business idea will work is to test your concept relentlessly. From our experience, this is a step that works best with a dose of humility. Tim’s advice as a real estate investor is to “always be willing to change,” but taking that advice can be tough. You may love your business plan as it currently is, but don’t let that blind you to ways that it could be better. Don’t be afraid to modify or alter your idea based on the feedback you receive from people in your market and in your industry.
Your business idea is your vision, your dream. The testing phase may reveal flaws—in fact, that is the point. Catching those flaws early, and eliminating them, will help ensure that you have a business idea that works.
Are you ready?
If you’ve gone through these steps and are ready to launch your business idea, check out our blog on How to Start a Business in Oklahoma. We are rooting for you!
What would you add?
Are you an entrepreneur who has experience validating your business idea? We’d love to hear from you about what advice you have for other people just starting out on their entrepreneurial journey.
Please take our survey here, and your expertise may be included in a future blog.