Is Your Business Idea Any Good? Here’s How To Tell (Transcript)
Not only do entrepreneurs tend to be extremely passionate, committed, and motivated, but there's also this idea out there that success has to take a long time.
But too many entrepreneurs hear that and think it means that it will take years to make even their first dollar.
So, what do they do? They work for years… for nothing.
Please don't make that mistake.
This is a transcript of Work Less, Earn More, Episode 53. Listen to the episode here.
Gillian Perkins:
We became entrepreneurs because more than anything, we want freedom. We want to be in control of our own schedule, income and life. But unfortunately, that isn't always the reality of being a business owner. I'm Gillian Perkins, and I'm on a mission to take back entrepreneurship for what it's supposed to be. In every episode, I'll share with you how to get the most out of every hour you work so that you can work less and earn more. Let's get to it.
When it comes to building a business, there is a fine line between being patient enough and not being too patient. Let me explain what I mean. So of course, we need to have some patience when it comes to any big project that we take on, especially something as big and something that can take as much time as building a business does. It can take years to build a business to a large size, to reach our real goals for the business, to create a lot of profit or have a big impact on the world. And so if we're not in it for the long game, then we might quit before we really see the fruits of our labor and we get the results that we want.
I see a lot of people who want to become entrepreneurs, but they don't have enough patience. And so they just try one thing after another and they don't stick with any of them long enough to get to the point where they're actually seeing those results. But on the other hand, it is possible to be too patient. And here's why that is. I'm sure that you've heard some of the things I just said before. You've heard that it takes a long time to build a business, that you need to be in it for the long game. But that causes a lot of people to spend a lot of time, a lot of energy, and potentially even a lot of money building a business or trying to build a business that they don't really have any proof is a valid business.
By doing this, they're really taking quite a gamble potentially with some of their most precious irreplaceable resources like their time. So for years, they might pour hours and hours, countless hours, into this project of building a business and not ever see any results. I have talked to so many people who have worked on building their blog for five or 10 years even hoping that it would turn into a profitable venture and still not seeing those results. But because they've been told that they need to be in it for the long game, that it's going to take time, they resigned themselves to being extremely patient and waiting for this one mythical day when things will all finally start working out.
I commend these people's patience, and if you're in this situation right now, good for you for sticking with something for so long. But at the same time, I think it is absolutely a tragedy that so many people do spend so much time, many hours, many months, sometimes even so many years, on something that maybe was never even a valid idea, a valid business idea in the first place. Now of course, every idea has merit and it might be a great creative, interesting idea. But when we think about a business idea, it needs to have value as a business. That means it needs to have real value to other people who will become the customers of that business, value that they will be willing to pay for.
A business needs to provide some product or service that there is demand for. So right now, if maybe you're in a situation like this where you have been working on your business for some time, you haven't seen much of any results, maybe you've earned a little bit of money or maybe you haven't earned any at all, and you're wondering if you're building the right business. You're wondering if your business idea is any good and if you should keep pouring yourself into this business idea. And you feel like you need some proof one way or the other so that you can make a good decision. Well this episode is for you. I'm going to talk you through three different questions that you need to answer in order to figure this out.
You Won’t Have all of the Answers
And I'm going to let you know right now that it is quite possible you won't have all the answers to these questions yet. You might need to do a little bit of work to figure these answers out. Okay, so let's get into this. The first question to figure out if your business idea is any good is are you providing real tangible results? Sometimes we see businesses that don't seem to be providing any specific product or service. Maybe they have a freemium model where they are providing some free premium service. It might be something like Facebook or your favorite blog. You go there and you get value from it and you don't pay anything for it.
And the existence of these businesses creates a bit of an illusion that you can build a business and at least have an impact on the world without necessarily having to sell anything. But it is an illusion, because the truth is that every business is selling something, whether it's apparent from the outside or not. If they are a business, if they are making money, then somehow they're selling something. So for example, with Facebook, they're selling advertising space. And so you as the Facebook user aren't paying anything, but that's because advertisers are paying for your attention. If you've watched The Social Dilemma, then you know all about that. Or your favorite blog, it's actually very similar.
You're not paying to access the information on the blog, but it is a space for advertisers, and the advertisers are paying the blogger to put their ads on the site or for when someone clicks on the ad. And so that is the product. The product is advertising space, the product is your attention. So in order for your business to be a good business idea, to be a profitable business idea, to have the potential, the real potential to make real money, you need to be providing some real tangible results to your customers and be selling a specific real tangible product. So what are you selling? Do you know what you're selling? Are you really clear on it? I really mean a tangible result, something physical, okay?
It might not be something that is knock, knock, that we can touch and feel with our hands, but it needs to be something that other people are going to consider real that they'll really see the benefit and see the value of. A mistake that I see especially a lot of coaches make is where they're providing something that is… They're helping people to be better or potentially feel better, but it can be really, really difficult to show people the concrete value of that and why they should pay for that. And it means that it can be really difficult to get paying customers and to make sales and to earn a profit.
That's not to say that coaching isn't a valid business model and that you can't make money with it. You absolutely can, you just need to make sure that the way you position your offer is something that is providing that real solid value that other people are going to understand what the value is so much so that they will be willing to pay for it. So again, first question for you is what are you selling and is this something that provides a real tangible result to your customers? Okay, so let's move on and talk about question number two. And that is have real people told you that they have the problem you're solving? So if you've studied marketing at all, then I'm sure that you know that every product is solving some problem.
Why People Pay
The reason that people pay money for products, the reason people hand money to businesses is because they have some need, some problem in their life that they're trying to solve. And this is the case whether you're buying a vacuum, whether you're buying an online course, whether you're buying apples at the grocery store, whether you're buying a new pair of headphones, there's some problem that you're trying to solve. Now at first glance, it might seem like there are some products that are not solving a problem. Like for example, if you just buy something that isn't a necessity at all. Maybe you buy a new dress. Okay, is that solving a problem? And in fact, there are many different problems that that one item might be solving for you.
You might have this problem of, “I need something to wear to this particular event.” You might want to attract a partner. You might want to be socially acceptable or increase your social status. And there are many other reasons as well. But even something like that where that's definitely not a necessity, it still is solving some problem for the user, for the customer, and that's why they're willing to spend their money on it. So the question for you is have real people told you that they have the problem that you're solving? So obviously, in order to be able to answer this question, first of all, you're going to need to know what problem you're solving.
So if you don't know that off the top of your head, then you're going to need to sit down and think about that. Think about that specific product that you identified in answering the first question, and then think about what problem that is solving for your customers. If you're not quite sure how to do that, then feel free to head over to our free Facebook group and share what your product is, and we can brainstorm with you. There will be a link in the show notes for this episode if you're not already a part of that Facebook group. Okay, so have real people told you that they have the problem that you're solving? So once you've identified what this problem is, you need to talk to some real people.
And quite possibly, this has already happened in the past where either you in the past experienced this problem or, you know people, or there are people in your audience who have told you that they have this problem. Now, the mistake that a lot of people make here and why a lot of people pursue businesses, business ideas that don't have real market value, is because they have an idea of a problem that people could be facing or that they think people are facing, but it's not a problem that other people perceive themselves to be facing, or it's not a significant enough problem that other people are really willing to spend money or invest their time into solving.
So I want you to have a good think about whether real people have actually told you that they are facing this problem and interested in solving this problem. Now, depending on how many people who are your potential target customers you've talked to, you may or may not have encountered people speaking about this in the past. And if you haven't, well this is where market research is really going to come in. You need to reach out and connect with people who are your target demographic, and specifically who are interested in the result that your product creates. And you need to ask them why they're interested in this result, what problem they're trying to solve by achieving this result, what's holding them back from getting that result right now.
And figure out what the real problem is for them, because it is quite likely, in fact almost certain, that if you have identified a real tangible result, there are people out there who want that. But they might not want it for the reason that you think they want it, and that is why it is so important that you talk to these people and that you make sure you're solving a problem they actually have and you understand what the problem is and why they want to solve it. Once you've done this market research and you've been able to answer these first two questions, it'll be time to move on to question three. And that is how do those people respond when you tell them about your product?
So you have created this real tangible result you can provide. You now have found some people who say that they actually have the problem that your product will solve and that they want that result. And then you tell them about your product. You don't even have to ask them if they want to buy it, you don't have to tell them to buy it. This doesn't need to be a salesy thing. It doesn't need to try to be persuasive. In fact, it's going to be way easier for you if you don't worry about that part at all, and you can get the answer that you need without having to try to sell. You just tell them that you have this product and you see how they respond, because there are three different ways they could respond.
And they could respond by saying, “Wow, I want that. How can I buy that?” Or they could respond by saying, “Eh, I'm not really interested. Thanks for telling me about it, but no.” Or they could not respond. And that's probably the most common response that people get is no response. And when they get that response, they think that they're not getting a response, because obviously in a sense, they aren't getting a response, right? So they think that they did the step wrong of telling people about the product. Maybe they did, but a lot of the time they didn't. And really what they're learning is that people aren't interested enough in the product to ask them about it, not interested enough to want to buy it.
And there's two different reasons why this could be. Maybe you haven't really answered the first two questions, maybe you're not really providing that real tangible result, or maybe people don't really have the problem that you're trying to solve. But if those two things are the case and people still aren't responding when you tell them about the product, then that is when you know it's actually your marketing messages. So you need to figure out a different way to explain the real tangible result that your product provides and the problem that it solves. Many new entrepreneurs cannot answer this third question. How do people respond when you tell them about your product? Because they haven't told very many people at all about the product. And this is a big mistake that a lot of new entrepreneurs make.
How to Talk About Your Product
For some reason, we all feel much more comfortable investing hundreds of hours of our time, our most valuable resource, into building a business based around a product that we have no idea if there's actually demand for than we do telling other individuals about the product and listening to what they have to say about it. And that is one of the biggest problems I see with most small businesses, most people who are trying to get their businesses off the ground for the first time. So right now, if this is hitting a little bit close to home, if you're feeling a little bit worried that it's possible that you've been pouring yourself into a business idea that isn't valid and you feel like you need to figure this out, there are three things that I would recommend that you do to figure out for sure if your business idea really is valid and really is the right idea, really is a good idea, really has strong potential, and is something that has this strong potential to be successful.
So the first thing, and this actually isn't the first of the three things, but the first thing you need to understand is that the faster you can earn the first thousand dollars or so from your business, the more likely it is that you're going to be successful in the long run. And I know that this runs counter to that idea of it's going to take a long time to build your business, but it actually isn't. In fact, both these things are absolutely true. It does take a long time to build a big, substantial, successful business. It is going to take at least a few years, if not quite a number of years. But at the same time, it doesn't have to take a long time to earn the first money from your business.
You don't need to wait years to earn your first dollars and you shouldn't, because until you earn this first money from your business, you are gambling with your time. You don't have that proof that your business idea is truly going to be successful or even has the possibility of being successful. We need to put the business idea, the product idea out there into the market and see how people respond. And if people respond by choosing to buy the product, that gives us the proof we need. So the faster we can earn this first money, not only will that give us a lot of confidence that we're on the right track and even proof that we are on the right track, but it also means that we will be able to move on to actually growing the business a whole lot sooner.
And that is both because we'll be done with the first phase, but also because we'll have the information that we need in order to be able to grow the business. What does that mean? That means that all of the work that you're doing to try to grow the business before you've earned a first significant chunk of money, you are guessing at what works because you don't have that proof yet. You don't know what has worked. You can't do more of what worked. You can't iterate on what worked. You're just guessing. But once you earn that first money, then you will learn a lot of things by getting those sales. You will learn what product people want. You will learn what marketing messages successfully sell it.
You will learn who your target customer is and what they actually want out of your product. And you will learn so much about them and how to talk to them and how they talk. And you can use all of those things that you learn to build your sales processes and scale your sales processes and take your business to an extraordinary level. So don't be too patient. Don't think it's going to take years before you see your first penny from your business. I want you to commit yourself to earning your first or your next thousand dollars as quickly as possible, ideally in the next one to three months. So how do you do that? Well that's where the three things come in. First thing is you need to identify what is that clear, specific result, that real tangible result that you're providing with your product?
If you're selling multiple products, if you want to validate your business idea, really what you're doing is you're validating one product. So you need to choose just one product to work on validating. Now, that doesn't mean you need to scrap your other products, it just means you need to set them aside so you can focus on this one product. You can move on to validating other products after this, but just start with one. And so what is the result that that product creates? Once you know what the result is, then you'll be able to do your market research. You'll be able to go out there into the market and solicit responses from people who want their result. Until you know what the result is and you can name it, you aren't going to be able to identify whether or not someone is a potential target customer.
But when you know what your result is, you can ask people, “Are you interested in this result?” And if they say, “Yes,” then you can ask them more questions. Whether or not someone wants this result will be the litmus test as to whether or not this person and their thoughts and their perspective and everything about them should be considered in your market research. Once you've completed your market research, and you've talked to at least five to 10 people who actually want the result that you're providing, and you've learned a lot more about them, why they want this result, what's stopping them from getting this result, what problem they're trying to solve, and what's standing in their way and what is challenging about this situation for them, and why this result is meaningful to them, then you will be ready to create your marketing messages for your product, some really persuasive marketing messages that are backed with sales psychology principles.
And you can use these marketing messages to beta launch your product, and this is the third step of the process, beta launch your product. Let me just explain what that means in case you're unfamiliar. A beta product is a simpler version of your product. It's the initial offering. So before you have successfully launched and sold your product, you're going to make this prototype. It's going to be your first version of it. It might have a few bugs. It might not be completely built out. It's a functional version and in your opinion, it's a good, valuable version, but you know it can be even better. But you have to release the beta version because you won't know how to make it better until real users, real customers are actually using it and give you feedback on it.
So you create this beta version of the product, and then you do a beta launch. And during your beta launch, you're going to be using grassroots type tactics for your marketing. You're not going to be trying to get a whole lot of visibility and use an automated sales funnel, you are going to be doing one-to-one sales. You're going to be talking to people directly and personally, both because those are the strategies that are going to convert at the highest rates, which is essential when your audience is tiny, when you're just starting out, but also because you're going to be learning so much from talking one-on-one to these people and seeing what they have to say.
If you follow this three-step process, where first you create the offer and you figure out what the result from the offer is. Second, you do your market research. You talk to real people and figure out what they actually want and why. And then third, you beta launch the product, by the end of that process, you will know for sure if your product idea, if your business idea is valid. You will have proof one way or the other. You will have either earned your first money from your business, and I would really encourage you to set your goal at earning at least a thousand dollars in order to validate your business idea. Or else you will not have generated those sales. You will not have earned that money because it turned out that people weren't that interested in your business idea.
Now if that happens, I just want you to know you don't need to panic and you don't need to start over from scratch, because more likely than not, in fact, 99 times out of a hundred, there is validity to your business idea, it just needs a little bit of work. You need to iterate a little bit. You need to change the format of your product, change the promise of the product. You need to slightly pivot the result, or you need to position it as solving a different problem even if you're creating the exact same result. Maybe you need to offer it to a different type of person. So maybe previously you were trying to sell this product to women, but it turns out that men are actually more interested in it. So this is just a simple little example of the type of change you might need to make if you're having trouble getting sales.
You don't need to start over completely from scratch. And in fact, unless you had another business idea that you were equally as interested in, that now that you found that your first idea didn't click right away, you want to move on to the new idea, I would encourage you to stick with the current idea that you are trying to validate, that you were testing out and see what you can change to get further through the validation process. So maybe it's changing your result, maybe it's doing another round of market research, but interviewing a different type of person, like a different gender or a different age range or people in a different part of the world, or maybe it is simply redoing your beta launch by using a different marketing message.
Here's the thing though, most people aren't going to go through this process. Most people will listen to this episode and think, “That sounds like too much work,” or, “I don't really have time for that. I just need to focus on building my business. I don't have time to slow down and start over, start from square one and do this work. I need to start earning money now.” But that is what this work is about. This work is about earning those first dollars. And if you haven't yet validated your business idea, there is nothing more important that you can do right now and then stop and slow down and take the time to figure out what that clear result is. Do market research, talk to real people, figure out what they actually want, and then do a beta launch of your product and generate your first sales.
Building a Strong Foundation
Those are the absolute, most important things you need to do to both get your business off and running and build a strong foundation that you will be able to grow your business beyond. Honestly, you don't have time not to do this because if you don't, you're running the risk of wasting hundreds of hours, loss of energy, and potentially a lot of money as well on a business idea that maybe doesn't have value in the market. I believe so strongly that this process is the number one thing that new entrepreneurs need to do to set themselves up for long-term success, and that the most common mistake new entrepreneurs make is skipping this process. That for the last several months, my team and I have devoted ourselves towards building a program that will guide new entrepreneurs through this process.
And not over the long-term and not in a self-paced way, but instead in a really quick and powerful way to get the job done, get it done right, so that these new entrepreneurs can move on to building their business and actually growing their business with this proof in their back pocket so that they'll be full of confidence, so that they'll have the tools they need to craft really compelling marketing messages to build their sales systems, and to further improve their products now that real customers are actually using it. So this brand new program, it's called VALIDATE. We're going to be kicking off the first class of the program on January 18th, which as I'm recording this is right around the corner.
So if you're interested in working directly with me and my team on validating your business idea and just this entire process that I've been talking about in this episode, then be sure to head to gillianperkins.com/validate. Again, that's gillianperkins.com/validate. Of course, you'll be able to find that link in the show notes. Obviously, there isn't much time to enroll since the program is a starting very shortly here. So if you are interested in doing that, then make sure you check that link. But I want to end this by just encouraging you to go through this validation process, to make the time to make this your top priority, whether you choose to do it on your own or do it together with me and my team. I know you can get through the process, I know you can find the time, and I know that more than anything else you can do for your business, this is going to set you up for long-term success.
Thanks so much for listening to this episode of Work Less, Earn More. Now here's what I want you to do next, take a screenshot of the episode you're listening to right now and share it on Instagram Stories. And when you do, make sure you tag me @gillianzperkins so I can see that you're listening. Sharing on Stories is going to help more people find this podcast so that they too can learn how to work less, earn more and take back their lives. And if you really love the show, then head over to Apple Podcast and leave a review to give it a boost. Not only will this help the show out, but it's also going to give you the chance to win a 12 month membership to Startup Society. Each week, I'll be picking one winner. To enter, all you need to do is post a review on Apple Podcast and be sure to include your Instagram handle so we can send you a DM if you win. Okay, now let's wrap this up. I'm Gillian Perkins, and until next week stay focused and take action.
