Are you thinking of starting an online business but not sure if your idea is strong? Idea validation is an important step to take before diving into your venture. You don’t want to invest time and money into a business that fails to make a profit. In this article, you’ll learn the best ways to validate your business idea to ensure that your venture becomes a success.
- Why You Should Validate Your Business Idea
- 13 Ways to Validate Your Business Idea – AliExpress Order Volume
- Ask an Entrepreneur
- Determine How You’ll Acquire Customers
- Browse Amazon’s Best Sellers
- Talk to Your Market
- Write a Guest Post on a Popular Blog
- Use Google Trends, Keyword Planner
- Create a Listing on Craigslist
- Perform Competitor Research
- Invite Someone in Your Niche for Coffee
- Host a Giveaway or Contest
- Create a Social Media Page
- Dropship Products
Why You Should Validate Your Business Idea
Over the past four years, I’ve started many online stores, and a lot of them quickly failed, mostly because I was too eager to dive in and less eager to do my research. One of my failures was from a friend recommendation. A friend had told me that barre (fitness) was a growing niche that everyone was doing now. Since the niche was growing in popularity I figured it’d be a great idea to start an online store targeting the audience. I spent a lot of time building my store. I designed my own fitness apparel (this was before Oberlo existed). And I started marketing. Had I done my research, I would know that Facebook (at the time) didn’t have barre listed as an interest. As a result, I was creating ads for similar audiences but I wasn’t finding the right customer.
Don’t invest too much time in the wrong niche. If Facebook doesn’t have your niche listed as an interest, it’s going to be an uphill battle. Eventually, Facebook did add barre as a niche but it was months after we had already failed.
There also weren’t any barre studios nearby since the niche was so small so I didn’t test the market. I had never gone to a barre class. I wasn’t an expert on the topic. I didn’t know who the right audience was. While you can create a store in any niche, it’s hard to attract the right audience if you don’t understand their interests. When it comes to testing the market, meet with people in your niche. Buy them a coffee or give them a gift card to have 15 minutes where you could pick their brain. The more you understand your audience, the better you can serve them. When validating your business idea, you’ll gain customer insights that’ll make your business a great one.
The biggest argument for idea validation is to help you avoid wasting money. If you want to build a real business that makes real money, you have to validate your business idea. When you take the time to research, you avoid making costly mistakes. Instead of finding out that your niche is so small you can’t even target it on Facebook after you’ve built the store, you try something different. Or some other eye opening lesson that helps you find the right niche for you.
13 Ways to Validate Your Business Idea – AliExpress Order Volume
A great first step in idea validation involves browsing order volume on AliExpress. If several products within your niche only have a few orders, you’re either looking at bad products or a bad niche. If you search your niche in AliExpress such as ‘running’ and search by ‘Orders’ you’ll find the most popular products purchased within the niche. Yes, it’s true that there’s more competition for those products. But it’s better to have a proven product than to end up with a dud. Aim to choose a niche where several products have thousands of orders.
Ask an Entrepreneur
Most people want to validate a business idea by asking friends and family. However, they’re not likely to give you an honest or a well-informed answer. It’s best to find an objective person who has experience building businesses when seeking advice. While not all entrepreneurs can advise on whether or not a niche is worthwhile, you might be referred to someone who has experience within the niche. Entrepreneurs are usually well networked. So if they don’t know the answer to your questions, they’ll know someone who can. Many entrepreneurs have built more than one business making them a good resource for idea validation and helping you determine the best type of business to start.
Determine How You’ll Acquire Customers
Before you validate your business idea you should try to determine how you’ll acquire customers. Will you run Facebook Ads, do influencer marketing or search engine optimization? What platforms do most of the customers within the niche use? Are they active in those communities? How will you connect with that audience, through marketing, if you have limited niche experience? What are your back-up marketing plans if your main method of marketing won’t work? When it comes to idea validation, you don’t want to base things on hypotheticals. However, you should have a strong plan in place before you move forward with the business. If you don’t know where to start with marketing, it might not be the best product to sell.
Browse Amazon’s Best Sellers
Another step to validate your business idea is to browse Amazon’s best sellers. As the biggest online store, you’re bound to find popular items that are worth selling online. When browsing a product category, you can easily find the best seller link for that niche. Under the best sellers, you’ll find the best selling products at that time. Best sellers change, so you’ll need to pivot within your niche as needed. However, Amazon offers you a good understanding of what products are worth selling right now. For example, right now under jewelry there are Buddha bracelets, sterling silver pendants, gemstone bullet necklaces, and more. Starting your store with best selling products like these can help you build your audience and grow your sales quickly.
Talk to Your Market
If you plan on starting a crossfit store, go to a crossfit gym and talk to the people in your class. What types of products do they use? What types of products do they need? What products do they like buying often? What blogs and publications do they read? How long have they been doing crossfit for? What are their interests within crossfit and outside of it? What are their core values? How much do they spend per year buying crossfit items? Talk to the people within your class to learn as much about your target audience as possible. If you can’t meet up with people in person, join Facebook groups within your niche and pay attention to what most people talk about. You can also post questions to have conversations to learn more about them as a customer.
Write a Guest Post on a Popular Blog
If you want to validate your business idea, writing a guest post on a popular blog can help you determine whether or not your business idea is viable. You can talk about the plans for your business, the product you plan to sell and more. If your store isn’t up yet, you can have an email sign-up on the homepage to collect leads. Are people eager to learn more about your business or does no one really care? If you’ve collected 100 emails from a guest post, you likely have enough interest that you should consider starting. However, if no one signs up for it, then it might not be worthwhile.
Use Google Trends, Keyword Planner
Google Trends is a great tool you can use to determine what the trends are for your niche which can help with idea validation. Not only can you see whether or not the niche has been growing or shrinking over the past 5 years, you can also see what the seasonal trends are for it. If you look at the past year for your niche, you’ll see which months have spikes. The spike tells you when peak season is. For many niches it’s Christmas, but some may be around other seasons or holidays.
You can also use Keyword Planner to determine the search volume keywords get. While it won’t tell you whether or not it’s a profitable niche, it’ll tell you if your niche gets searches. If your niche gets a high volume of searches, it’s highly probable that your niche is worth diving into. It also shows that you can build an audience through organic traffic showing its marketability.
Create a Listing on Craigslist
Create a listing on Craigslist with a product you plan to sell. Add the price you plan to sell the product at. Do people contact you wanting to buy the product? Or do you get no responses? If several people are asking you about the product you’re on track to idea validation. However, if no one responds to your posting, you might want to consider another product.
Perform Competitor Research
You can also validate your business idea with competitive research. How many followers do brands in your niche have? Do their social media pages have high levels of engagement? What are the Alexa rankings of brands in your niche? Alexa’s tool ranks websites based on their popular. The better the rank (closer to 1) the more traffic the website gets. That’s why Google, YouTube, and Facebook are ranked highest on the list. You’ll also learn how much time people spend on their websites, percentage of search traffic they get and more. By understanding how much traffic your competitors get and how much engagement they get, you can predict if they’re making money or not. However, it’s not as reliable as other idea validation tactics on this list.
Invite Someone in Your Niche for Coffee
Using the power of LinkedIn, you can easily find key people within your desired niche. Contacting someone in a marketing role at a company within your niche can give you insight into whether or not the niche is profitable. You can also learn the marketing hacks that top brands use to grow their business. Contacting someone in a junior-mid level role like marketing coordinator or marketing manager is likely the best route as they’re usually the ones doing the hands-on work while higher-ups tend to focus more on the overall strategy.
Host a Giveaway or Contest
People love freebies. If you host a giveaway or contest, using a tool like Rafflecopter, giving away your product or the product you hope to sell can be an indicator of whether or not the product is worth selling. If you have thousands of people signing up for your contest or giveaway, then the product is worth selling. However, if you can’t even convince people to win your product for free, then there’s a good chance that people won’t want to buy what you’re selling. While giving away free stuff doesn’t tell you whether or not a customer would pay for your goods. You could use the emails collected in the giveaway or contest and give a runner-up prize of a $5 gift card for people to use on your store at launch. If people like the product enough, they’d still be willing to buy it.
Create a Social Media Page
You can validate your business idea by creating a social media page and building an audience. While you can grow your followers to having 10K without having any sales, the ability to grow an audience let’s you know how popular a niche is. You’ll also have an audience that you can market to if you decide to launch. Use hashtags, attractive pictures and shoutouts to grow your following in the beginning. If you can grow your audience to 10K+ in a matter of months it likely has a good audience size that you’ll be able to market to.
You can use a dropshipping tool like Oberlo to do some market testing for your niche. Oberlo offers a free for life plan where you can build your own store, add products and process orders in one click and more. You’ll be able to choose from millions of popular products on AliExpress and Oberlo Supply. You won’t need to carry inventory or buy bulk inventory. You only pay for the goods you sell making it a low-risk way to validate your business idea. You’ll be able to market your products to find out if the niche you’ve chosen is profitable. As you’re using Oberlo for idea validation, you should consider creating a general store to test out a range of niches to find your most profit. You can read other dropshipping tips to get started.
What steps did you take to validate your business idea? Let us know in the comments below!