It takes more than just an idea to create a successful and sustainable business. It involves strategic planning and thorough research, but do you know how to get started? As you walk through the initial stages of launching your startup, there are five key things to consider to validate your business idea.
Taking the time to find honest answers to these questions and pivoting accordingly can save you a lot of time and money down the road. Pro Tip: Challenge your assumptions and use strategies that are new to you!
UNDERSTAND THE PROBLEM YOU ARE SOLVING
Where is there a need and how does your product or service fill it?
Starting a business isn’t just about making money. A successful business identifies a specific problem and meets that need. To produce a product or offer a service that effectively meets the needs of consumers, you have to know what their problem is and how you are effectively solving it.
For example: As an entrepreneur center and coworking space in Lakeland, Florida, we solve problems for startups and small businesses in our community through office space, resources and free networking events.
DEFINE YOUR IDEAL CUSTOMER
To determine who your target audience is, get really specific with your research. Ask yourself these questions to dive deeper than the typical surface level demographics:
- Where do they spend their time online?
- What online platforms and social networking sites will be the most effective in reaching them?
- Where do they shop?
- Where do they work?
- How do they spend their free time?
- How are they currently solving the problem that your product/service will fix?
- Do they know that there is a problem or will you need to educate them?
- What types of issues are they passionate about?
TALK TO YOUR TARGET MARKET
Doing market research within your target demographic through online polls, focus groups, and even personal conversations will help your business get to the roots of who their target consumer is. These inform a business of what consumers want and how to produce and sell their product in a way that appeals to their target market.
Once you think you know who is in your target audience, find people that meet that criteria and have conversations with them. Talk to the people who you think are likely to buy into your product or service and listen to their feedback.
It’s important to have conversations with people in your target demographic to discover if your product is in demand and whether or not people will buy what you’re selling at the price point you’re hoping to set. Research the economic status of your target demographic in order to gauge how much they would be willing to spend. Having these conversations is just another way to conduct market research and know your consumer well.
To get to know your target audience, there are a variety of research methods you can utilize:
- Focus Groups
- Field Trials
- Personal Interviews
- Social Media Listening
DEFINE THE DIFFERENCE
How are you different from the other options on the market? Why should someone choose your product or service?
Determine who your competitors are and determine how your business is different. A competitor is likely already addressing the problem your consumer has, so how can you address it differently? What do they lack that you can bring to the table to set you apart? Is it stellar customer service? Quick response times? A higher quality product? All of these things can give you a competitive edge.
HONE YOUR MESSAGE
How will you connect with your customer in order to get sales?
People buy what they understand, so to become your target market’s first choice, it is essential to communicate what you offer in a clear and concise way that speaks directly to them.
As you craft your brand’s message answer these questions:
- What are the core values of my brand?
- What story do we want to tell?
- What attributes of my product/service are most important to my customer?
Once you have done this, you can focus on where this message should be shared. This goes back to what you learned about your customer through market research:
- Do they spend time on social media?
- Do they respond well to email marketing?
- Would they share about you through a referral campaign?
- Do they frequent certain locations that allow for community posters to be hung?
- Learn about knowing your customer and generating leads from the experts in this Headway podcast.
As you begin your start up, keep in mind that it is easier to meet an existing demand than to create one. This is why market research and strategic planning is so important.
Don’t be afraid to try different tactics to discover what works best for you, always be challenging your assumptions, and adapt your strategy when necessary. No one gets it perfect the first time. This is a process for continual improvement.
Looking for more resources on starting your own business? Read our in depth guide on How to Start A Business In Florida!
Are we missing something that has been helpful for you? Let us know in the comments!
Validating a business idea is crucial to the success of any entrepreneur or business start-up.
This blog was written by the team at Catapult Lakeland, an entrepreneur center in Lakeland Florida that exists to foster the growth of startups by providing education, resources, community and space.