September 12, 2011
There is no quick and easy way to know if you’ve found your golden ticket. In the words of my absolute favorite teacher at USC, Tommy Knapp (professor in the Entrepreneurship program), you’re going to have to “get dirty”.
5 Important Steps to Take When Testing Your “Big Idea”:
Step #1: Make a clear and thorough evaluation of who you believe the customer will be, where they will purchase, etc (so you can be sure you’re talking with the right people)
Step #2: Get out there and talk to strangers: shop owners, potential customers, vendors, etc – anyone connected with the industry at all
Step #3: Get into the data: determine the NAICS industry code for your potential business, what are the trends, margins, etc in that industry. Look at Hoover’s, IBISWorld, etc…
Step #4: Google the topic and look through news articles that come up to see what’s happening now. You can also set a google alert for the topic. Just google, “google alert”, and you can start using the service for free. For example, if you are an ice cream vendor in New York, you may set alerts for “New York ice cream”, “New York frozen yogurt”, “ice cream industry”, etc. You’ll be amazed how much info you’ll find this way.
Step #5: Spend time determining what kind of competition exists. If you are thinking “there is no competition”, you’re wrong. Consider any alternative to using your product (including substitutes or choosing to use nothing at all).
Stay tuned for “5 Common Mistakes Made by Entrepreneurs”…