You wake up in the middle of the night and you've had a brilliant idea. It's the next Facebook. You're a billionaire. Time to celebrate!
Not really... ideas aren't actually worth anything, it's the execution that counts. However, executing can cost a lot of time and money, so it's important not to jump in too quickly (trust me - I've done it!). You also may have several ideas, and choosing between which multi-billion dollar concept (kidding - but fingers crossed) you're going to pursue can be tough. The steps below allow you to test the validity of a business idea in just 10 minutes, so you can throw the bad ones out and focus on the more commercially-sound winners. Here we go!
Define the problem and the solution.
Great businesses are great solutions to annoying problems. That's literally what a business is - scratching an itch for someone else, better than anyone else can. A 'problem' can come in many forms that doesn't have to be purely math based, like helping people save money (even though that's obviously a common one). It could be giving people confidence, entertaining and curing boredom, helping people find love, the list goes on. At the bottom of every sound idea is a problem that you are solving.
So - what is the problem this idea solves, and how do you solve it.
Ask yourself: Would people actually pay for this?
Your 'brilliant' idea always seems the coolest right at the start, because it's new. However, you cannot build a big, profitable and sustainable business on something cool. It has to be great. It has to be amazing. Otherwise it simply won't last. So ask yourself - would customers pay for this? If it's a one-time product, would new customers continue to buy it or would it just be a short trend that a small selection of people try before it fizzles out? If it's an ongoing service, would people continue to pay? Be honest. It will be hard to be completely transparent with yourself because it's your idea and it's always best to talk to other people especially potential customers - but save the section at the end because we've only got 10 minutes!
Define the business model.
It seems fun and motivating to watch an uplifting video that says 'ignore money and do what you love, the money will follow!'. There is some merit to this because building important things that matter to the world is admirable, and money doesn't define success or happiness. However - you can't be so ignorant to think that you can just bypass the money and commercial validity in exchange for some enthusiasm and a high five. The good news is that the initial viability of a business model doesn't take too long to figure out.
Simply question - how will this idea make money? What are the costs involved? Is the inflow of revenue greater than the outflow of expenses? If so - you're profitable! Hooray! But make sure you didn't skip the step above about being realistic. If your revenue channels are ridiculous - on paper the business model might say 'make money via ( x )' but if you can't actually make it happen - it's useless.
Define the growth model.
How can you get as many target customers to know about your business, as cheap as possible? Are you able to market and grow your business without running out of cash? Who could you partner with to get your business out there to more prospects? It's unlikely that you'll be creating an entirely new market, so you'll need to identify the other players and figure out how to work with them. Doing this obviously takes longer than a few minutes, but the main thing you want to quickly identify is if you can grow the business without going broke.
Do a lean canvas.
Ah, a lean canvas. My favourite business tool.
This is how you can plan your business fundamentals in a matter of minutes, rather than spending countless hours writing a pointless in depth business plan (you can do that later when you want investors - but hold your horses pal).
It’s called a Business Model Canvas. This takes all the most important factors of your business and simplifies them down. By doing this, you’ll see if your idea makes sense as a business, and you'll find any holes in your plan that need more attention.
Print out a large version ( just google ‘lean canvas template’) or draw it on a large piece of paper / a white board and use post it notes to fill in the gaps. Let’s quickly walk through each section at light speed. Most of these you will have quickly gone over in the above steps, now it's time to bring it all together.
- Problem: Define the problem
- Solution: Define the solution
- Customers: Who is your target market?
- Costs: What are the running costs?
- Revenues: What are the different revenue streams?
- Metrics: What defines success? Sales? Downloads? Traffic?
- Channels: How will you grow the business? Facebook? Cold calls? Partners?
- Unique Value Proposition: What makes this product awesome?
- Unfair Advantage: What can you do that your competitors can't?
So you've done all of the above - how's your idea looking? If you had several concepts, you've likely thrown a few of them away. If you have one or two that are looking quite interesting, you can continue down the path. The next thing you'll need to do is develop the idea more, and spend more time on each section of the lean canvas to brainstorm all the details. Then after that, the most important thing is to validate. VALIDATE, VALIDATE, VALIDATE. Validation is the most critical thing that matters - before you seriously invest in anything, make sure you're speaking to real customers.
If you're ready to keep going with your business idea, I seriously recommend checking out The Ultimate Startup Blueprint, which has a complete, in depth guide on everything you need to start your business. From the product to business planning, team, marketing, finance, social media and more. It even includes checklists and templates to make it incredibly easy. Check it out!
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With the quick and easy steps outlined above, you'll be able to test all of your exciting business ideas in a matter of minutes! It's also a valuable skill to learn, and will be useful for years to come. Happy testing!