Top 10 Ways to Test your Startup’s Idea Viability

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If you are looking to start a business, make sure your idea is viable. The idea may be as simple as opening a brick-and-mortar shop to sell ice cream during summer or as complex as developing a new tech solution or app. While you may come up with many different ideas, only viable ones will turn into success stories. Let us look at some of the ways you can test the viability of your idea:

1.Is this just something you love?

A viable business idea is a stroke of inspiration and something you are capable of producing. You should not choose something just because you are interested in it. Consider whether you have the resources, skills, connections, and experience needed to turn the idea into a successful business venture. It should be the intersection of something you love, something you have the capabilities to do it, something you get paid for and something the world wants or needs.

2. Can you relate your business idea to something in the marketplace?

Most business ideas are born from combining or refining existing ideas. Based on what is available, you can come up with something that appeals to more customers. For instance, the idea of television combined with digital services produces smart or digital TV. 

Going for ideas that are far more innovative, can require that you need to awaken the need in your consumers and that can be expensive and hard to achieve. Be aware.

3. Is your business idea solves a problem or meets a customers’ need?

Customers will spend their money on a product or service that solves a problem, satisfies their desires, or fulfills their needs. Any idea that does not address a real problem, desire, or need will have difficulties getting off the ground. Customers need to see what value they are bringing to the market.

Make a market research, interview people that could fit your demographic, build a prototype and do user testing. Ask strangers. And do not pitch your solution immediately, try to understand their problems and needs, and at the very end if they like it, ask if they would pay for it right now (usually that’s when you find out if your product is good or not).

4. Is your business idea taking advantage of an opportunity?

The timing of your idea is a key factor in determining its success. In fact, the success of a business lies in the ability to have the right idea at the right time and in the right place. For instance, the rise of the Internet provided opportunities for smart devices.

Conduct a life cycle framework, to understand in which phase of the life cycle your product/idea is at. Is it too early? Too late? Pay attention to that.

5. Have you already identified limitations or drawbacks to your business idea?

No matter how big or creative your business idea is, it will have some limitations and drawbacks. It may be a long R&D phase or easily replicable by competitors or just difficult to change once implemented. By thinking of such factors beforehand, you will be in a better position to develop solutions.

A framework that could help is the SWOT analysis. Bring all the stakeholders in one room, and do it together. The results can be surprising.

6. Can your business idea make money?

Your business should be able to generate income upon implementation. Think about how soon you will start making money, how long you can afford to wait, and for how long will the business idea sustain the profitability.

Check how much your competitors charge, check industry standards & try to understand if you could charge the same, more or less.

7. Can you afford to fund your business idea?

Before implementing a business idea, make sure you know how you will finance it. Will you take a bank loan, bootstrap it, or get financing from friends and family. Be clear of how the funds will be utilized in turning the idea into a profitable venture. 

A canvas business model could help you understand all the things needed in order for your idea to function, calculate the costs & potential income. In case you need more money, make a list of potential investors, prepare a pitch deck & see if they are interested (before starting your idea). And above all… Enjoy the Journey!