- 5 Leadership Traits No Entrepreneur Succeeds Without - November 7, 2021
- How to Validate Your Business Idea in 30 Days (or Less) - September 30, 2021
- How Freelancers Can Stay Afloat During Times of Crisis - August 10, 2020
Starting a business requires serious research, but it also requires you to seize opportunity. Jump in without consulting the data, and you risk boarding a sinking ship. Spend a year learning every detail of the space, and your opportunity may already be gone. As with most things in life, a balanced approach is best when it comes time to validate your business idea.
Take the following steps to validate your business idea in one month or less:
- Partner up
In 30 days, you simply can’t do all the work yourself. If you have a mentor in mind, ask him or her for help. This person might be a former employer, a thought leader you follow on social media, or a member of your alumni association. You might also consider reaching out to your local SCORE chapter to find the mentor that’s right for you.
If you’re not sure where to turn, reach out to a local Small Business Development Center. Backed by the Small Business Administration, SBDCs offer free or low-cost consulting services to help entrepreneurs turn their ideas into viable companies.
- Map your business model
Before you meet with a mentor or consultant, get a head start on mapping out your business model.
Doing so will help you understand:
- The infrastructure of your business (the resources and networks you’ll need to carry out your business activities).
- Your offering (what goods or services you’ll provide and how they’ll differ from your competitors’).
- Your customers (who they are and how you’ll reach them).
- Your finances (the cost structure and revenue streams you’ll need).
- Meet your competition
Never jump into a market before getting to know the other players. One of the best frameworks for analyzing your competition is Porter’s Five Forces.
Developed in 1979 by Harvard Business School professor, Michael E. Porter, Five Forces can help you understand the influence of competitive rivalry, the bargaining power of suppliers and consumers, and the potentially disruptive threats you might face.
- Know your consumer
Who’s your target customer, and why does he or she need your product or service?
Develop a user persona, a fictionalized character who embodies the user case for your product. If you need help filling in demographic details like market, age, earnings or employment status, consider surveying your projected target customer group.
- Prototype your idea
What’s the riskiest assumption of your product? Whether a certain component will work? Whether the design is intuitive? Take a lean startup approach to test your theory: build a “just enough” prototype, and bring it to a cohort of likely buyers.
If you’re in the tech space, spend $35 to get a Raspberry Pi, which offers desktop-level computing power for hardware development. To wireframe software, try Sketch. With a robust bank of symbols and a free trial option, Sketch lets you create interactive interfaces without writing a line of code.
- Check for hype
Test the waters, especially if you have a digital service in mind. Set up a mailing list so visitors to your site get a sneak peek at your new product. Reach out to micro-influencers in your space, especially if you’re in a niche industry. Develop blog posts around your idea, and share them on social media. If you get mixed messages, set up a focus group for an in-depth discussion with your audience to further hone your product’s messaging.
- Shop for funding
Consumers might want to buy your product, but an equally important question is whether or not investors are willing to fund it.
Equity funding is one option, but the truth is that less than one in 100 startups receives venture capital. More commonly, startups take loans from alternative lenders, crowdfunding, or even unsecured business loans. Whichever route you choose, you’ll gain at least an additional set of eyes on your product or service. Someone with a financial stake in your company is in the perfect position to help you refine and validate your idea.
Those seven steps might sound like a lot to accomplish in one month, and they are. But they also represent the fastest, safest path to startup success. And if that’s what you want, you’d better be prepared to work for it!
Originally published Sept. 12, 2019.