Welcome > Blog > Advice > The importance of validating your business idea and creating a solid business plan
1st August, 2016
You have a business idea ……….. the inspirational ‘Eureka!’ moment.
And of course you want to get started immediately. But there are a few things you need to consider in order to validate your business idea, as well as the need to produce a supporting business plan. Ask yourself the following;
Is your business original?
Using a search engine and social media sites to search for your idea can show you whether your business is original, but remember to look beyond the first results page.
Researching your competitors is essential if you are validating your business. If there are similar products or services on the market already, having competitors is not necessarily a problem. It just means there is a demand for your product or service and by identifying your competition; it will help you to recognise what differentiates your business.
If you have a unique selling point (USP), you will be able to win and maintain a higher share in the market. You can also learn from other business’s mistakes and successes by understanding how they promote themselves and who they target. Google Trends can also be useful for validating whether you are going into a stable or growing market.
Can you validate the demand?
You can reduce the risk of selling something that nobody will buy by validating the demand for your product or service and its market. Compiling a list of potential customers will also help to reduce the risk of low traffic in your initial few months.
A way to find out if customers would be willing to pay for your product or service is to set up a free landing page. Useful sites for free landing pages are Strikingly and Launchrock. Strikingly uses no code and you do not need any design experience to build a page. Launchrock is also easy to use with a block-based builder and custom HTML blocks.
Landing pages will usually feature a short snippet about your product or service with ‘coming soon’ or ‘in development’. The key is to make your landing page attractive to capture the email addresses of visitors. You can see how many people are visiting your site by using an analytical tool such as Google Analytics, or by creating a sign-up form using sites such as Wufoo. This sign-up form will ask people to leave their email address if they would like more information on your idea or your launch. If lots of people visit the site, you will know people are interested in your idea.
Another way to validate your business is to send out surveys. By using tools such as SurveyMonkey, you can send it out to all your contacts and get it shared on social media. It is important to ask the right questions so you can gather as much information about your idea as possible. Examples could be:
• Would they buy the product or service?
• Do they like the name of the product/business?
• How much would they pay?
The answers to these questions can help shape the final launch of your idea and give an indication of how successful the idea can be in comparison to how many people are engaged.
Have you produced a business plan?
Your business plan is the document that allows you to turn your thoughts and ideas into a business. It may seem like an intimidating task but it is a valuable document outlining your business strategies and makes you think about every aspect of the business to understand it thoroughly.
As your business progresses, your time working on the business will become more limited as you spend more time in the business. Consulting your business plan can allow you to make more informed and effective decisions and ensure you are keeping on track.
Also, a business plan is vital for anyone seeking or thinking of seeking finance, now or in the future. Banks, investors and other lenders will expect to see a business plan and will not provide capital without one. It provides them with an overall understanding of the business and the likely returns. Keep you business plan active so you are able to refer back to it and keep business progression on track.
Are you asking for help?
There is nothing wrong with asking for help when you are starting a business.
There are numerous services to provide you with the support and guidance you might need. Industry experts can help you understand how to make the most of opportunities and further identify the needs your target market. A mentor is a valuable asset to anyone starting a business and this avenue shouldn’t be overlooked. A mentor can give you one-on-one support and provide you with dedicated advice and guidance.
Another great way to get your business off the ground is to attend seminars and workshops which can help you develop necessary skills and knowledge. You can get support for your start-up through the Start & Grow programme which is tailored specifically to your needs and your business idea.
Written by Tara Gillam, Head of Enterprise, Business West – delivering business support in the South West