You’re washing the dishes and you just had a great idea for a million dollars business! You run to your computer, starting doing your research and fast forward a few weeks and you’ve spent money in your most recent entrepreneurial adventure – WRONG! This is not how you should validate your business. You’ll be wasting a lot of money before being sure that the risk of not working is as low as possible – that should be your job as an entrepreneur, basically!
So, to avoid that you and many other new entrepreneurs make that mistake and waste precious money, I’ll be sharing today a method that will allow you to validate your business idea and make sure that you have at least a few customers to buy your product or service when you launch your business.
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What you won’t need!
You might be thinking that this is a very complex process and it will take you lots of time to validate your idea and that’s simply not true! I’ll share with you today a business idea validation that you can do over a weekend – yes, that’s right, it will only take 2 days (or less, depending on how much time you invest in it!) and will give you the answers to your questions! For this you won’t need fancy web tools, credit card, an incredible network or even an MVP – that will come after!
What you will need!
For this weekend validation process you’ll simply need a pen, a piece of paper, an internet connection in your laptop or smartphone. All the websites that I’ll share with you today will be free to use (or at least freemium) and you’ll just need to make a few phone calls to verify prices and call a few of your friends to ask for opinions.
Before validating your idea
Before we start this exercise I think it’s important to let you know that are some things that you should not be worried about, like: “my idea already exists” or “there is someone selling the same product (or similar) at a cheaper price than the price I would be able to afford.” – these kind of thoughts are not going to help you and they might make sense to you, but they are not realistic! Go to Google Maps and see how many local shops are selling mattresses in your city or how many local groceries stores you can list in your neighbourhood. Your idea is as good as the numbers tell! Worry about opinions after validating your idea, alright?
Also, I don’t believe that you should only start businesses that solve your problems. I believe that’s a valid point to prevent you from quitting when things get messy in your business (as they will eventually get). Other than that, any idea is a good starting point as long as the numbers and the validation process is followed and respected!
Validating your idea
For this exercise I’ll be giving you an idea that I had a few weeks ago but I don’t have time to execute it. This way you’ll see the whole process being documented by me and you’ll be able to idea steal my idea (go for it!) or replicate the process for your ideas (go for it as well!).
- Start by describing your idea (short answer). When you have a business idea, you know everything about it and with time, you’ll develop it in your head to such an extreme that after a while you won’t remember the initial idea anymore. To prevent that, write down a basic description of your idea. In my case, I want to create a “Yakisoba in Box” delivery service, allowing people to choose from a 2 to 3 different options of yakisoba and receive it in their doorsteps after a few minutes.
- Are you the only one liking this idea? This part is quite tricky. You know what you want to do, you think it’s a great idea but what you should be asking is: “Am I the only one thinking that?”. This is where your friends will be handy! Call a few of your friends and ask them a few questions:
- Do you like Yakisoba? What ingredients do you usually ask (beef, pork, shrimp, veggies, etc…)
- How do you feel about the food that you have delivered at your house? Do you have any comments (this is a great opportunity to see what your competitors are doing wrong!)
- How much do you pay for Yakisoba? Are you willing to pay more for a better dish? what about paying more for a faster delivery?
- The customer’s journey In this step you’ll need to understand the journey that the customer will do through your company and see what requirements you need to fulfil. In my case I know that the customer will eventually see an ad, click on it, go to my website (or similar), order a dish or two and pay online using a gateway. With this simple description I just realised that I need a few things: a way of receiving orders (communication channel with the customers), a way of receiving money and a way of delivering my food. Obviously, I’ll need a place to cook, but that’s not part of the customer’s journey!
- The business journey Now I need to understand how the business will respond to the customer’s journey. What needs does it have to fulfil? What materials do I need? Do I need to invest some money initially? How much? a great way to develop the business journey diagram is first to understand the customer journey and respond to the conclusions you come up with!
- Running the numbers You need to know your numbers! How much do you need to invest to start your new entrepreneurial adventure? How much does it cost to cook and deliver the dish #1, dish #2 and dish #3? How much is your profit margin? How many yakisobas do you have to deliver to break even your initial investment? Can you lower your starting up costs by using your own materials – specially if you’re talking about food related businesses! Excel is your greatest friend in this situation and you’ll see how easy it is to do the math. And even if you’re not good in math, you just need to follow this simple rule while you can’t hire a business partner: you need to sell it at a higher price than the cost of producing it! If it costs you $3 to cook a yakisoba and $1 to deliver it (total of $4), sell it at, for example, $10, and you’ll have doubled the initial investment for one dish only!
If you are still reading this you’re either ready to start or you’re coming back to follow the step by step. Good luck anyway! In a few days you’ll have your business validated! Don’t forget that this is just an example and you’re able to export this process to basically any idea you have! It only requires a little bit of imagination (and Youtube! eheheh).
I think it’s important for you to know of some tools that might help you getting a better understanding of your possible audience and improving your business idea:
- Google Trends;
- Reddit (this one is a SUPER tip!);
- Google Sheets (if you don’t have Excel);
- Notion ( to help you organize your ideas and research!)
If you’re reading this post and you don’t have business idea, you should read “Businesses You Can Start With $100” and see how many businesses you can start this week! If you already have a business, perhaps you need to learn about the “Infinite Growth Hack For Your Business” and scale your sales like a skyrocket!
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