business idea

Many people mistakenly think that having an idea is the main indicator of business success. However, even after making a business plan and collecting start-up capital, it is possible to fail in the first few months of the company’s operation. Testing the idea before launching the business is recommended to increase the chance of success. This is the best method to avoid failure and losses. It is important to remember that the investment for launching an idea is many times more than what is spent on testing the business idea.

The Purpose of Business Testing

User acceptance testing (UAT) is a process to determine if the implemented idea will work. It is usually carried out by people who will then put the product or service into practice. Testing business ideas helps to solve the following problems:

  1. Eliminating all kinds of risks
  2. Finding and interacting with a loyal audience
  3. Studying the financial capabilities of customers
  4. Obtaining pre-orders
  5. Preparation for real sales

The main principle of every entrepreneur planning to launch a new product or service is to sell and produce it.

Eliminating Risks

When launching a new product into the market, it is necessary to study its demand. There will be minimal or no sales if there is no demand for it. An advertising campaign and landing page will be required to eliminate this risk. When visiting the site, buyers do not even realize that the product is not manufactured or is out of stock. They see the product photo, description, customer reviews, etc.

It will also be necessary to study the costs of attracting customers. If the testing of business ideas is done independently, then an advertising platform is selected, and a small budget is allocated. As you understand the processes and achieve results, it increases. Suppose there is no full understanding of how the advertising is set up. In that case, it is recommended to entrust this task to professionals to get reliable data.

Testing business ideas
Testing business ideas

Step-by-Step Algorithm for Testing a Business Idea

The plan of action applies to any product:

  1. Structuring the Commodity: Identify the commodity to be sold. If there are several and they are different, then they should be tested separately.
  2. Identify the Audience: It is important to realize that it is not the product being tested but people’s attitudes towards it. If the audience is not chosen correctly, the result will be incorrect. To select the right audience, describe it based on the following points: demographics (male, female), interests, age, and pains. To more easily orientate and identify who will be interested in the product, it is recommended to describe yourself on customer surveys, thematic forums, and groups in social networks.
  3. Preparation of the Landing Page: All blocks should be attractive and interesting to the buyer. The goal is to provide the maximum useful information and motivate customers to purchase the product. However, do not offer fuss-free subscriptions, gifts, and other bonuses that do not need to be paid, as the level of demand will be misleading. As soon as you need to pay for the product, such an audience will leave the page. If it is planned to sell complex products and services, then for each type, you need to make different landing pages.
  4. Connecting Statistics and Setting Up Goals: Google Analytics suits this task. Before launching an advertising campaign, install a counter on the page to collect information on visits and visitor behavior. Setting up goals will help track specific actions of visitors: clicks on buttons, form filling, and transitions.
  5. Running Adverts: After a small advertising campaign, it will be possible to judge the results.

Evaluating the idea’s effectiveness involves creating a business model based on conversion data for each product or service. Considering the costs of development and promotion, you can easily calculate whether it is profitable to invest in the idea.