How Test a Business Idea In Less Than 2 Hours
If you are like most entrepreneurs, then you probably :
- Regularly have daily ideas for different businesses
- More often than not you don’t follow through with seeing if they are viable
- You then forget about them, until someone else launches that very same business idea!
If any of the points above sound familiar, then this post is for you. It’s going to explain exactly how you can test an idea for a new business in under 2 hours.
This guide is going to discuss the 3 steps to take in order to test a business idea using just a landing page and Pay Per Click traffic.
“If You Build It, They Will Come” might have worked for Kevin Costner in Field of Dreams, but could prove a rookie mistake for any new startup. Image Source
Test a Business Idea
The technique that is going to be discussed is called Validated Learning.
Applied in this context, Validated Learning is testing a business idea, measuring the results and learning from it.
What’s The Point?
90% of startups fail. Ouch.
One of the main reasons for this is due to there not being a demand for what is being sold.
These startups aren’t finding out before launching that someone actually wants what is on offer. Most importantly, the startups don’t know if someone will part with money in exchange for it.
Wouldn’t it make more sense to find out before a company starts buying inventory, hiring staff and building a website if there is a demand?
By validating your idea prior to launching the business, you avoid 3 things :
1.) Wasting Time
Time is something that you can’t get back. So spending months building something that nobody wants, isn’t time well spent.
This is also time that could be used working on other (more successful) projects.
2.) Wasting Money
Unless you have money to burn, startups don’t want to be spending lots of cash on a project which is going nowhere.
3.) Minimising Risk
By testing the concept with actual people, you can gauge results to see if there is a demand for what you’re selling. If there is, the risk of nobody buying will be lowered.
How Do You Test a Business Idea?
There are 3 steps to setting up a business idea test :
Step 1 – Create a Landing Page
The first step is to create a page that you can send traffic to in order to explain what your product or service does.
The goal is to create a landing page which communicates the value of the product or service.
The user isn’t going to be able to buy anything straight away, it’s a way of confirming that there is interest in what is being sold. So the landing page should also have the ability to capture users information.
The best way to do this is by using a landing page.
Landing pages are a dream come true for marketers. They’re essentially a single page website with one primary conversion goal (signup, purchase, request a callback etc).
The beauty of using them is that they’re a lot simpler to setup than a complete website.
It can also be done on a budget and most importantly, the results can be measured.
There are a few different options that you can use to set one up.
First of all you could use a specific landing page design agency to create a custom design. Alternatively, you can use a template from an online service like Unbounce or Instapage.
By using a custom design you can tailor the page to look and feel to be exactly how you would like it. However when using a template, you’re much more restricted on how the page will look. But you should still be able to customise the copy and images.
A basic landing page usually contains 3 main elements :
- Headline
- Copy
- Call To Action
Example wireframe of a landing page
Headline
The headline is what a user reads when they arrive on the page. Its primary goal is to communicate the value proposition of the product or service.
Your value proposition is your unique offering. The user should be able to understand within seconds of arriving :
- What is being sold
- What makes it special
- Why they should buy it
The value proposition is your way to directly grab the users attention and tell them why they will benefit from using the product or service.
Copy
This is the text on the page where you try to communicate to your customers what your product/service does.
This shouldn’t be a list of features like “Contains Compression Fit Support and Made with Kevlar”.
It should be benefit driven and explain how the user benefits from the features.
For instance, “Our Leggings Give Your Primary Muscles More Support Whilst Running To Enable You To You Run Faster”.
Call To Action (CTA)
Also known at HelloClicks as a BFB (Big F*****G button).
This is what the user is going to click to take your desired conversion goal.
Example call to action button
The landing page should contain a form with several fields in it for the user to complete. Part of the success of the form will be down to the CTA button, which should encourage users to click it.
That means that extra attention should be given to the actual button.
The call to action can have many different purposes :
- Buy Now
- Sign Up
- Request Callback
- Request Quote
The text on the button should mirror the next step of the user and grab the users attention.
Don’t just use Submit or Click Here for the text.
So if the user is trying to down an ebook, your CTA would read something like “Download My Free Ebook”.
Step 2 – Acquiring Traffic
At this stage the landing page is complete and can be accessed through a web browser.
Now it’s time to send traffic to the landing page in order to see if the business idea has any interest in it.
There are two main ways of doing this, either through Pay Per Click (Google Ads & Bing) or Social Media Advertising (Facebook, Twitter & LinkedIn etc).
The reason why we wouldn’t use SEO here is because it would take too long to see any results. The goal is to test ideas as quickly as possible and learn even faster.
Pay Per Click Advertising
Pay Per Click is probably the best option to begin with as the users that are using search engines are browsing with intent.
They’re typing search terms into the search box to find something that they are looking for.
Your ads will then be displayed when users are using these search terms that match with the keywords you have decided to advertise for.
If someone is searching for “red shoes” and you have decided to advertise on the search term “red shoes”, then your ad will be displayed.
The most important thing to remember when driving users to a landing page by PPC is the quality of the traffic. The users are much more likely to be interested in what you are selling as you are using keywords that are related to your business.
Try to be as specific as possible with keywords in order to see quick-wins.
Social Media Advertising
Social media advertising is very different to Pay Per Click advertising. Users are not searching for your product or service, they’re looking at their friends cat photos and posting photos of their breakfast.
It can be a lot more difficult to get this type of marketing to work and in front of the right people without any data.
This is not to say that it cannot be done, but it can be an expensive way to test a business idea. However, when done right, advertising on social media can have excellent results.
*If you’re testing an additional arm of an existing business, you may also want to try targeting newsletter subscribers.
Setting Goals
You need to create a way of determining the success of the campaign prior to launching.
For instance, if you spend £100 on advertising and receive 4 enquiries for a £150 product, you could deem the test a success.
The goals can be measured in a number of ways :
- How many leads were received.
- How many users clicked the buy now button.
- How many users signed up to be notified when the product / service is ready to launch.
Step 3 – Validating Your Results
At this point you have created your landing page and have started sending traffic to it.
Once your test is complete, you can now make an informed business decision on whether or not there is a demand for what you are selling.
The next step may be to build a prototype or create an initial batch of products for people to actually buy.
You can then contact the people who showed an interest in your initial landing page test to see if they would be willing to buy.
Example Business Test :
A new startup has decided that they would like to create a new type of vitamin that was targeted primarily at runners.
The startup would begin by creating a landing page that is primarily focused on their running supplement. It could discuss the ingredients, the benefits and the price etc.
But rather than asking people to buy it (which they can’t do as it’s still in the idea stage), instead it is explained to the user that the product isn’t available. But, they can submit their details and be notified as soon as it is and get early access.
The startup had decided that they would spend £200 on paid traffic and if they could get 5 people that were interested in the product, then it was a green light.
Fortunately the fictitious startup actually had 8 different people express an interest and this gave them the assurance that there was interest in what they were making.
From those 8 people they could reach out to them directly and ask them what they would like to see the product feature in order to guarantee that they would buy it.
The company also then had 8 people to contact when their product was ready to sell.
Summary
This is a fantastic way to validate your business idea and see if there is a demand for a new business.
This method has been publicised by several people included Noah Kagan and Tim Ferriss.
Fortunately, we’re living in an era where it does not require a huge amount of investment in order to see if a business has potential.
So what’s stopping you?
If you have an idea, that you have been putting off for fear of failure. Now’s the time to find out with minimal risk and financial investment involved, if it will work or not.
