You can never be 100% certain if your idea will work, but there are some good tips for testing the market.
Firstly, contact potential clients and customers to discuss the business. You might even gauge the interest in your business by offering samples of your products or services to potential customers as a pre-launch trial.
Secondly, know your business prospects by researching your competitors’ businesses.
Thirdly, perform an initial SWOT evaluation on your business:
- Strengths are attributes of your business that are part of your business setup; unique product or service, your location, your price, quality of the product or service.
- Weaknesses are attributes of your business that are part of your business setup; untested business, lack of experience, lack of customer knowledge of your product or service, customers’ existing loyalties.
- Opportunities are external market factors that will affect your business; new market, new product or service.
- Threats are external market factors that will affect your business; other businesses in your area or industry, advances in technology.
Being realistic about your prospects is the most important aspect of this evaluation. Cautious optimism should be the guiding principle. Knowing the dangers and weaknesses of your business will be a huge advantage in seeking to avoid costly errors.
