2015-07-02 10:00:07Business DevelopmentEnglishMany new businesses fail because entrepreneurs, convinced that their idea is the next big thing, fail to test it with real consumers.|Many...https://quickbooks.intuit.com/r/us_qrc/uploads/2015/07/istock_000046165608_small.jpghttps://quickbooks.intuit.com/r/business-development/how-to-test-market-your-big-idea-on-a-small-scale/How to Test Market Your Big Idea on a Small Scale|How to Test Market Your Big Idea on a Small Scale

How to Test Market Your Big Idea on a Small Scale

3 min read

Many new businesses fail because entrepreneurs, convinced that their idea is the next big thing, fail to test it with real consumers. In fact, one recent study shows that 42 percent of new startups fail because there is no actual market need for their product or service. Luckily, you don’t have to spend a lot of money to test consumer reaction to your products. Here are some ideas for testing your product on a small scale.

The Importance of Test Marketing

If you asked the 42 percent of startup founders mentioned above before their business failed what they thought about their products, they probably would have listed all the benefits consumers would derive from them, and how their new company had the potential to change the marketplace. It’s difficult to be objective about your product when you’re in the midst of planning your new business, and you may not spot small issues with your product that can make the difference between success and failure. That’s why it’s so important to test. Because if you’re wrong, you may watch your business dream slip away, and the financial ramifications can be devastating.

Luckily, there are a few methods you can use to test market test your products that won’t cost as much as a full launch.

Survey Your Target Market

If you’re this far along in the process, you should know exactly who your target market is. Knowing whether they would buy your product is critical to your success, and you don’t have to rely on gut feelings or guesswork. Instead, create a survey, and ask potential customers what they think. Companies like Survata can help you create a custom survey they will send to your target market (which you define). You can attach photos or videos of your product, and an expert will help you create the questions. Prices range from $1 to $2.50 per respondent.

Give Away Prototypes in Exchange for Honest Feedback

If you have working prototypes of your product, you can give some away for free in exchange for honest feedback from consumers, and then use that feedback to improve the final product before you officially launch. The key to success with this approach is that you work with consumers who are a part of your target market. You can find those consumers on social media outlets, or by asking people who have helped fund your startup at sites like Kickstarter or Indiegogo. Ask them to fill out a product testing survey like this one on SurveyMonkey, or simply ask them to tell you what they do and don’t like about your product after using it for a while.

Host an Event to Gauge Consumer Reaction

Another way to test your product’s viability is to conduct a trial run and test consumers’ reactions to your product or service before opening for business. For example, if you plan to open a restaurant and want to test the public’s reaction to your menu and food, cater a small event for free in exchange for the guests’ honest feedback.

This approach isn’t limited to service businesses. An entrepreneur who has created a new pillow for sore necks could partner with a chiropractor and arrange to give his pillows to a few dozen patients who have neck pain if they agree to sleep on the pillow for a week, and then complete a survey.

Conduct a Beta Test

A beta test is a small-scale release that tests market reaction to your product. By doing a small-scale release, you will get an idea of how your full launch will go, and you’ll be able to gain information to make final tweaks to your product or service before committing fully. When you conduct a beta test, the product should be as close to the final launch product as possible, including the packaging, so consumers will experience your vision of the product. The idea behind a beta test is that consumers in your target market will use and experience your product in their own environment for an extended period of time, usually four to six weeks. The test is typically done just prior to release to work out any final bugs in the product design, and to get solid feedback about how consumers use the product. Companies like Centercode can help you plan and launch a beta test on your product.

Don’t let your startup become a part of the 42 percent of business owners who likely didn’t test their products. Instead, give your business idea the best chance of success by getting consumer feedback before you launch.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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