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Julia Fourie | Life Coach Cape Town

How to Find Out if a New Business Idea is Worth Pursuing

Julia Fourie, Life Coach, Cape Town

July 02 2020

As a business owner, you need to test your business idea before wasting time or money. To validate business ideas you need to perform many small experiments.

Here are some experiments to help you better understand if it’s worth acting upon your business idea.

Does it solve a problem?

Google made search better. Amazon simplified online buying and selling. Netflix solved on-demand streaming media. Uber is making an on-demand car service better.

You need to be solving some sort of real problem that exists in the world. If you aren’t solving a problem for potential customers, then how will you get people to buy your product or service?

Saying that it doesn’t mean you can’t do it the other way around, it just means that you need to take that into account in your sales approach i.e. you have to get potential customers to become aware of this need. This is simply much harder to do and takes longer but not impossible.

Talk to your potential customers

Before settling on an idea, identify who your ideal customers are, what their income is, what their buying habits are, and how they make buying decisions. You can get this information by conducting surveys or polls online, interviewing potential customers, and searching for existing data on your demographic. Once you compile the results, you’ll have a clearer picture of your paying customer.

Is there a sizeable market for it?

Search the Internet, browse information guides and books, and look at industry reports for information on the competition and the potential size of your target market.

Without a large enough market, your idea may never get off the ground. You need to determine if a niche market actually exists for your idea, and this all starts with research.

Are you passionate enough about it?

Your business will most probably take up the bulk of your time, so you need to make sure you’re passionate about it to make it a success. It’s important that your idea is something you truly care about, not just something you’ve decided on because of chasing profit alone. When you work on something you’re passionate about, you’ll put in much more work than you otherwise wouldn’t have done if it was for profit alone.

Find people who criticize your idea

Friends and family will always give you positive feedback because they don’t want to hurt your feelings. Find people who don’t like your idea and get them to poke holes in it by finding weak points and why they think it might fail.

Not everyone is going to be your customer, but it’s better to head into a new business endeavor with open eyes and constructive criticism. Getting feedback from people who don’t like your business idea can help you figure out how you will address these issues and what your answers will be as you build your business.

Find beta testers

Once you have a beta product or service that you created based on your market research, it’s time to find some beta users who will test it first hand as a potential customer. This will help you improve the product and fix any bugs that might come up.