You have an idea that you think could be a great business opportunity. You’ve run it by your friends, family and colleagues, and they all agree that this idea has merit. Now what?
Before you launch your business, you’ll want to do some research and test the market to prevent building a business around a product or service that doesn’t resonate the way you thought it would.
Follow these 10 steps to help you develop your idea into a successful company:
1. Get specific about the problem you aim to solve
First, you want to get very clear about the problem you intend to solve. Who has this problem? Why is it significant? How will you solve the problem?
Create a concise description of your product or service, much like an elevator pitch. Run it by friends and colleagues for feedback and refine it until you’re sure it communicates the essence of the value you’ll deliver.
2. Conduct competitive analysis
Next, you need to survey the landscape of competitors with similar products and services. Who are your competitors? What are their strengths and weaknesses? How can you solve the problem in a more thorough or convenient way? How will you differentiate?
3. Establish your target market
Is there a market willing to pay for your product or service at the price point you’re targeting? What is the size of the market opportunity? Who is your ideal customer?
You’ll want to be sure you have a thorough understanding of these prospective customers, including their goals and values, challenges and pain points, sources of information, objections, and role in the buying process.
It may be helpful to create a customer avatar or persona to help you better visualize the people you’ll be serving. If you aim to serve multiple market segments, you’ll create multiple avatars — one for each segment.
4. Talk to your audience
There are several ways to gain insights from people in your target market, such as:
- Survey: Create a basic questionnaire to gain insights into the thoughts of your target audience. What you learn will confirm whether or not you can solve their pain points and will give you a general idea of what they’ll be willing to pay for your product or service. You can also learn what core features would be most in-demand.
- Interviews: To go deeper and gain the ability to ask follow-up questions, interviews are beneficial. These interviews can be conducted over the phone or in focus groups.
You can also presell your product idea, where you create wireframes or a mock-up of your product and build a sales page to gain invaluable feedback from customers before you spend the time and cost to actually build it.
5. Refine your idea
Now is the time to refine your idea based on what you’ve learned thus far. Determine your unique selling proposition (USP) and how you will distinguish yourself in the market relative to the competition. Identify the features that are must-haves versus nice-to-haves. Now is also the time to decide which market segments you’ll launch with.
6. Develop an MVP (Minimum Viable Product)
Using the insights you gained from the survey and/or from preselling your idea, create an offering that includes the core functionality that your target market desires, which will help them solve the primary pain point.
7. Conduct market testing
Get your MVP in front of prospective users in your target market to gain their feedback. Does it meet their needs? Are you able to add something that will offer increased value to them? This is a key benefit of creating an MVP as you continue to integrate feedback to refine the product in a cost-effective way.
8. Create a marketing plan
Once you have your core product in progress, it’s time to craft a marketing plan. An alternative to the traditional marketing plan is a business model canvas that uses validated assumptions to create a framework of the core business needs in a format that you can continue to update and iterate. It’s an especially helpful approach when working with an MVP, since it’s easy to update as you go, and you can clearly see the impacts of changes on your business.
9. Evaluate your business needs
Startups often start very small until they have the funding to grow, so you now need to take a look at your business to make sure it can support your activities. Do you have the staff you need to handle sales and customer service? Do you have operational procedures in place? Take the time to do a thorough assessment.
10. Continually iterate
You are now ready to release your idea to the world. Congratulations!
But your job isn’t done when you launch your product or service. You should continue gathering customer feedback and measure your business results to refine your offering even further. Your goal is to continuously offer more value to your target customers.
Taking a business idea from concept to reality is an exciting endeavor for any entrepreneur. Following these steps offers a framework for success that you can repeat with any new idea to improve your chance of success.