Step 5 – Test the Viability of Your Product or Service (Validate)

Business Planning Start-Up Guide

In this step, we’ll devise a test to judge your target customer’s desire to purchase your product or service. If you participate within an industry and understand the customer’s “pull” for this product, some may find this step unnecessary. That may or may not be prudent, only you can be the judge.

In this step, we’ll devise a test to quantify the customers’ need or want to reduce risk of a poorly received concept, product or service.  

Before you continue, please go to Phase III under Development of a Minimum Viable Product or Service (MVP).  The MVP may be better tested shortly after this step and before developing the business infrastructure from Phase II and III.

Lead Pages“Prove” Interest

If you complete this step, you will have “proven” a demand for your product or service.  I put proven in quotes because this only tells you that a demand or interest exists. This may reduce the risk to a failed launch, but it will not guarantee it. If you spend a lot of time devising A-B testing and really narrow your research, then you’ll reduce the risks even more.

What is A-B testing? It is systematic testing. If “A” produces X sales or interest, what happens if you change it and retest it. Test “B” then produces Y sales. Continue this until you refine “that perfect” product, design, or advertising.

Online Testing

How does one test the viability of a product or service’s demand? I suggest two methods. Some like to use LeadPages for this. It may be one of your best and easiest methods to test. It has well tested “canned” landing pages, email capture, and even the ability A-B test.

The second method is to set up a WordPress installation or web pages. This second method is more involved and may be more costly unless you have good technical abilities and a knack for design.

Once you set up a landing page, you then buy Google, Bing, Facebook, or other ads to test your product. If you can gain some interest and even capture emails from users, then you may have a winning product or service. Of course, a lot of this is first based on your marketing ability since you do not have an actual product or service to sell.

Some have set up a shopping cart to see how many visitors would press the “buy” button. If you have a lot of “purchases” then you have a pretty good indication of a product’s potential. But of course, this is a simulation. Only a real launch and a real store can prove a concept. Oh, and don’t take someones money if you don’t have something to sell. Sorry, some may think I really mean sell something.

Prototype

Another method is to sell a sample or prototype. This is by far the best method because you are selling something real. Of course, some products or services may not be suited to prototyping. 

Pre-Sale

Another way to test viability is to pre-sale. Since you’re selling something you haven’t produced this will involve more than a web site or lead pages. You may have to personally sell to others, so you’ll need a good reputation and trust established.  

This works best for existing companies that have a solid reputations, though newbied have done this successfully, too. If you cannot produce the product or service, be sure to give the folks back their money.

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