If you’re an aspiring entrepreneur holding down a day job, you’re probably itching for the right time to become your own boss. But starting a business can be risky, and you’ll need all the cash runway you can get as you build your business to turn a profit.
When starting a business, are you more successful if you keep or quit your day job? A 14-year study showed that entrepreneurs who kept their day jobs failed 33% less often than those who jumped right into self-employment. Is this a wise move? Ask Phil Knight, who “spent five years selling his athletic shoes before leaving his full-time job in accounting. The company he started? Nike.”
Validating your business idea and acquiring paying customers are crucial steps that rarely happen overnight. Here are five ways aspiring business owners can test their idea while they hold down a job.
1. Have honest conversations with ideal customers
Who are your ideal customers? Your target audience (i.e., potential customers) are people you need to pitch your idea to which requires actual conversations.
Online survey results can give your business idea an inflated sense of usefulness as people who have no plans to buy your product or service respond with niceties. Meanwhile, asking your parents, friends, or colleagues may produce misleading results as they try to support you rather than share honest feedback.
Your best bet is to find people who are most likely to benefit from your product or service and talk to them about their needs. Find them in real life and candidly ask them about their problems, listen to how they talk about those problems and find out where they go for solutions.
A lack of market need is by far the number one reason startups fail, according to CB Insights. Entrepreneurs can easily misread the need for their product based on responses from people who don’t need their offering at all.
2. Launch a sales landing page
The ultimate validation of your idea is qualified interest, leads, and sales. All the theory in the world can’t beat cash-in-hand.
Create a landing page to gauge market interest prior to launch or for customers to purchase your product or service. Gathering leads prior, and post-launch will give you actionable data.
With little to no technical experience, you can design and launch a landing page, and drive traffic to it (by sharing it on social media, Q&A sites like Quora, and places where your ideal customer’s hangout online, etc.).
Landing page metrics can help you assess potential interest as well and capture customer information (e.g., email addresses) for future marketing efforts.
3. Create an online marketing and advertising campaign
It’s relatively easy and inexpensive to set up online marketing and advertising campaigns.
Decide which online channels you’ll use to drive traffic to your landing page. For example, a low-cost social media campaign on relevant platforms where your ideal customer’s hangout could help you gauge interest (via click-throughs and key engagement metrics).
Another example includes content marketing tactics like content creation, distribution, guest blogging, article submissions, sponsored posts, etc. If your key metrics are strong, it’s a good sign that people are interested in what you’re selling.
4. Discuss your concept with experts
Getting feedback from established business owners, industry decision-makers, fellow entrepreneurs, and other people whose opinion you trust—other than your parents and friends—can give you much-needed perspective on the viability of your idea.
As you’re developing your product roadmap or fine-tuning your service offering, post questions and spark conversations on Q&A sites like Quora, targeted Group pages on LinkedIn, Facebook, etc. and other relevant forums to gain valuable feedback. You don’t have to listen to all of it, but you may read or hear something important that you hadn’t considered otherwise.
5. Build your MVP
Your MVP, or minimum viable product, is the simplest form of your idea you can sell to customers. It may not be the original version of the product or service you envisioned—and that version may still be yet to come—but it’s proof of concept.
By offering an MVP for sale, you’ll establish baseline costs to produce, ship and sell a version of your offering. Then you can calculate your return on investment and see what it takes to break even and drive profitability.
Keep in mind, your MVP should not be half-baked, unfinished, or otherwise not representative of what you plan to sell. Nothing will tell you more about customer interest in your business than if people are actually willing to buy it, use it, and tell their friends about it –– that’s the most important validation of all.
Eric Goldschein is a staff writer at Fundera, a marketplace for small business financial solutions such as business loans. He covers entrepreneurship, small business trends, finance, and marketing.