How to Test the Market Potential of Your Business Idea

If you’re considering starting a business, you’ve probably heard the sobering fact that half of all small businesses fail within the first five years. And while there are numerous reasons why a business might fail, it’s safe to say that a fair number of them go under because their leaders skimped on the demanding tasks of identifying, researching, and testing the viability of their business idea – and failed because they couldn’t secure the customers they assumed would come.


Before you move from the initial stages of planning and put your idea to the test, make sure to carve out time to assess the market potential of your business idea.


Don’t blindly fall in love with your first idea.


Your idea may be a good one, and it probably is. But don’t fall in love with it just yet. It’s easy for new entrepreneurs to become infatuated with their first business idea, imagining their success before they’ve even taken the time to really consider the ins and outs. This infatuation can make it hard to see potential pitfalls, and it can also influence their perspectives and strategies as they develop the idea. Before you go all in, it’s important to make sure your target market wants what you’re offering.


Talk to potential customers.


The best people to help you understand the viability of your business idea are the people who will be paying for it. Seek out potential customers from your target audience and talk to them, whether in person or through a video or phone call. Explain your idea in its entirety, and ask them if it’s something they’d be interested in.


To go a step further, you may want to consider finding a group of potential customers who are willing to share their thoughts on a regular basis, or even to help you develop your product. This can help you obtain profound insights into what your audience is really looking for and a keen understanding of their most pressing issues and needs. Even better, once development is complete, the customers who helped may feel a well-deserved sense of pride over the finished product, making them more likely to buy into the idea themselves.


Do your homework.


Take the time for research that goes beyond your potential customers. Talk to future competitors, industry vendors, your mastermind group, business coaches or mentors, lawyers, and anyone in this space who can help you fully understand what you’re getting into. As you set out with your new business, their advice and insights will be invaluable. 


This tip is especially true if you have never had a job within the industry you’re moving into. For more complicated endeavors, you might even want to push your timeline back a little and get a related job, as gaining expertise on the front end may help you increase the long-term viability of your business idea.


During this planning stage, it’s important to gather all the information you can in order to set out on the right foot. Assessing market potential is only the first step, of course: Don’t forget to test your product or service, collect feedback, and consider your marketing strategy to make your business idea a reality.

We use cookies to ensure that you receive the best experience while using our website. By continuing to view our content, you consent to the use of cookies. For more information about how we use cookies see our Privacy Policy.