Idea Validation Then Business Plan
You have decided to start a business. That is great and I wish you every success.
Out of interest, would you be able to answer these questions when asked:
Why do you want to start a business?
Have you done a business idea validation?
Answering the first question is the most important and possibly most difficult question to answer. It requires you to assess what you want from running a business.
What Is Your 'Why?'
When people are asked this question answers they give tend to be things like:
- I want to spend more time with my family
- I want to make more money
- I can do a better job running a business that my current employer does
These answers focus on the end result of running a business. It is also the outcome you get if and only if you are lucky enough to have a successful business. It glosses over the reality of running a business some of which are:
- Not being able to switch off at the end of the day
- There is always something to do and chances of you having an employee in the beginning is slim, so it falls on you to do everything
- The never ending cycle of needing to generate enough revenue each month to cover all business costs
- Everything comes to a halt if you are sick
Even with these obstacles, a lot of people, myself included jump feet first into starting a business.
To Plan Or Not To Plan?
Planning! Some people are good at it and others aren’t.
I fall into the category of those who are good at planning. Where I fall short is when it comes to execution.
That is because, the more time I spend planning, the less energy I have left to execute the plan.
This was the case with the business plan I created when I decided to start a business. I outlined a strategy, put numbers behind it and added a timeline.
My accountant was impressed and said ‘the plan had legs’. That was great feedback. However, when I think back, all that time and energy put into creating the business plan should have been spent elsewhere. Such as in validating the idea.
In other words, rather than starting with a business plan, the starting point should have been idea validation.
In business, time is of the essence. The more time spent planning, the less time spent generating revenue.
Think about it, businesses that are able to get products to market quicker generally get more market share. Market share gets you name recognition and more revenue.
Ever wonder how this happens?
Not being bogged down in red tape that makes you jump through hurdles is one way. Another way is being able to make decisions quickly and agile enough to change direction when needed.
Steps To Validate An Idea
The idea of product validation can be daunting. It shouldn't be as the idea validation process can take different forms.
Below shows just one of many methods that can be used.
At the very early stages of an idea, you may choose to talk to friends and family about it. If they are receptive to the idea, you may take this as a sign to move to the next stage.
Listening To Your Target Market
This is where you join groups to listen, answer questions and possible ask questions relevant to your product or service. By listening to what people are saying, you may find your idea may need to be tweaked a bit so it fulfils a need.
During this phase you are collecting information and data from people who would potentially be your customers
Talking To Your Target Market
After listening, comes talking.
These conversations are more specific and involve searching for people who already have an interest in what you are offering.
Consider starting your own group and ask your members, i.e your target market, what they would like added to your product or service.
Let Them See
By this point, you would have incorporated all the information gathered from the previous steps and ready for people to see what you are selling.
You can get a handful of people testing your offer to see if there are any additional tweaks needed.
Formulate A Plan
Once some sort of idea validation has occurred, a business plan can be put together.
Note, you can keep selling your product or service while formulating your plan.
You may also revise the idea validation process used as you formulate the business plan.
Once the plan is complete, or as complete as you are going to get it, it’s time to run with it.
When starting a business, knowing your ‘Why’, i.e. Why do I want to start a business? is important. Being clear on this will help get you through the failures you are going to face while building your business.
Time spent validating your idea is much more beneficial than creating a business plan. Especially as all the planning in the world can not turn a bad business idea into a good one.
Going through the validation process, on the other hand, can turn a really bad idea into a really good one by listening and implementing what your target market want. Even if what they want is very different to what you want to offer them.
Idea validation can be done within a small group. With the ultimate validation being peoples’ willingness to pay for the product or service you offer.
Links on this post may be affiliate links, which will provide me with a small commission if you make a purchase using my link. Images were created using Visme.
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