Do you have a million-dollar idea in your head, just waiting to be acted upon? Or will it be a complete bust, an idea with no actual potential for return?
This question is one that stops many would-be entrepreneurs in their tracks before they even take the chance and launch their potential business ventures. Fortunately, it is possible to make a more educated guess on your idea’s likelihood of success or failure by taking the time to validate your idea before moving forward with it.
Here are 10 questions you can ask to validate your startup idea, before you commit significant time, money or other resources to its launch:
1. What problem are you solving?
If you can’t clearly state the problem your product or service solves, you probably don’t have a successful idea.
2. How have others attempted to solve this problem before, and why did their solutions succeed or fail?
There’s a lot you can learn from those who have gone before you.
3. How many specific benefits for your product or idea can you list?
The more you can think of, the more likely it is that you’re meeting a real need and can be successful.
4. Who are your potential competitors?
Having competitors isn’t a bad thing. It means a market exists. However, knowing what you’ll face if you launch is important, as an overcrowded marketplace or one where consumers have a strong affinity for the dominant brand may be more difficult to break into.
5. What unique features does my product or service have?
Before you go into business, you need to be very clear about what sets you apart from competitors.
6. Have you done a SWOT analysis?
This framework helps you to understand the strengths, weaknesses, opportunities and threats that your idea has, giving you a better idea of the overall likelihood for success.
7. Do you have access to the various resources you need to launch a business?
While you don’t need to be rich to launch a business, you will need some combination of time and money, depending on the scope of your idea. If you have no way to access everything you need, you’re better off waiting to launch your company until your situation is different.
8. What is the size of the market that will buy your product or service?
If you don’t know the size of the market, you have a lot of research ahead of you. Understanding how many people need your idea and what they’re willing to pay for it, will help you determine whether your concept is viable.
9. Do you have distributors or partners to help you scale your business?
Once you have paying customers, you’ll need to ramp up actual distribution to meet demand. Do you have access to the partners and/or money needed to do so?
10. What will it take to break even or make a profit?
Some ideas take a lot of upfront investment, while others don’t. If yours does, it’s a good idea to plan for how you’ll handle your finances and daily needs while you’re waiting for your product or service to gain traction.
It may take some time to come up with answers to all these questions, but once you have them, you should have a better idea about how viable your idea is. If it passes these tests, go for it! If not, keep thinking – your next idea may be the one that changes the world.
What do you think of these tips? Tell us in the comments!