Running a successful startup isn't rocket science, but it's also a delicate skill. It's crucial when running a successful startup is to ensure that your idea can work. After all, one of the biggest reasons why so many entrepreneurs fail is because they are working with ideas that just aren’t applicable to the real world.
Balancing the needs of your consumers and your desire to create will mean life or death for your business. And unless your products can fill a need for your audience, it doesn't matter how passionate you are about the product – it won't work.
This guide is going to help you ensure that your business idea is viable and has a chance of working in the grand scheme of things.
Can You Build It?
To start, it’s necessary to see whether you can even build the idea. It may be easy to think that you can solve a problem by implementing different ideas, but often, the real reason why this hasn’t happened to begin with is due to the fact it’s impractical.
Rather than going straight to market, you should first build your product as a concept. It doesn’t necessarily have to be the finished product, but putting something out to test before finalizing will ensure that many issues can be addressed. There’s nothing wrong with building an early-stage prototype and testing it out in action with a small group. The feedback collected from choosing this step could save you product trouble down the line.
Is it Cost-Effective?
Once you are sure that you can build your idea, you need to be sure that the idea is cost-effective. But how do you determine how cost-effective something is?
You can begin by looking at your own bank balance. How much will your idea cost to make at this current time, and do you have the resources to cover it? If not, would you be able to gather resources to pay for the costs? Being able to examine whether it's in your best interests to move forward with a costly project could play a big role in the future of this idea.
You also have to consider the price point you would have to sell an item at in order to make money. Sometimes you can have a perfectly good product, but because the manufacturing costs, it’s impossible to make a profit.
You can work out the price point by looking into your target market and getting an idea of the current price ranges for similar products.
Do People Want It?
For some people, this may be the first step. But even if it's not, this is an important step to understanding if an idea is worth moving forward on. In many cases, inventors can’t test the demand for their product without a working prototype first. Go bold and take your product out to the general public.
People often fear this step the most, opting instead to confine product testing to biased family members and friends. But examining the true market appeal of a product will better serve you when it comes to bringing quality products to life for consumers.
Can You Market It?
By now, you know that there’s some demand for your product and you can make a profit. But the determining your product's potential for marketing isn't easy. Just because there’s a demand for a product doesn’t mean that you can marketing will come smoothly.
This is where you have to do research. Look into what your competitors are doing and you need to formulate a strategy. If you have a strategy that works, you may decide that it’s worth trying out.
At this point in the process, you may discover that you're ready to warrant a limited rollout. The biggest mistake entrepreneurs make at this stage is to go all in. Going all in and hoping for the best can quickly drain your budget. It also means that you're setting yourself up for trouble down the line if your product doesn’t sell like you wanted it to you are going to find yourself in trouble.
Start small and monitor how quickly you can sell your products. As time goes on, you can start to scale your efforts with a reasonable guarantee of making that money back. Remember, scaling too fast is one of the surefire ways to fail your startup.
The Biggest Decisions
For entrepreneurs, these are the business decisions that will prove to be the most difficult. You shouldn’t risk everything on one product idea or service. Startups need to ensure that they have performed due diligence prior to investing a significant amount of money in a venture.
How will you make sure that you validate your big idea?