How To Test Your Online Business Idea – Before You Spend Your Savings!

test-your-business-idea

About The Author: David Robinson founded his full-service digital marketing firm Red Evolution in 2003. Today, he has a global client base and a team of dedicated and highly qualified experts. Red Evolution are also accredited Hubspot and Google Ads professionals.

Starting an online business is exciting. It’s also challenging – not least because, in all likelihood, you’ll be investing some (or all) of your hard-earned savings or redundancy pay in the endeavour.

Because of this, it’s a good idea to do some preliminary work to establish the likely success of your new online venture and avoid common mistakes. 

Thankfully, doing so is both straightforward and easy. In this article, I’ll explore how you can avoid the usual mistakes people make, and ensure your new business idea is successful. We’ll look at market research, the importance of understanding who your customer is before jumping in feet first, and some free online tools to help you get started.

Avoid These Obvious Mistakes

In all the years I’ve been involved with helping businesses thrive online, several mistakes keep getting repeated.

Mistake #1: Website First

The first and most common error people make is creating a website before doing anything else. Although your new business is going to need a website, it doesn’t need one straight away. It only requires a website once you’ve established a need for the business behind it.

People often create a website first, then investigate their market – only to find that either nobody wants what they are offering, or the space is saturated or very competitive. So park your desire to build a website until you’ve established there’s a need for what you’re planning to offer, and, importantly, you have the resources to compete with those already offering it. Start with market research.

Mistake #2: Lack of market research

The second common mistake is assuming that you know the market for your product or service. It’s not always as simple as it seems, and there are many ways of working out what people want these days. 

Most new businesses miss this exercise until they hire an agency to promote their new website, only to be told they need to invest way more than the cost of the initial website – and they can’t afford to do it. For that reason, it’s actually got potential to be a new business killer!

Know Your Market, Know Your Customer

One way to get a feel for your target audience is by performing basic online research using Google. You can do this yourself by following these simple steps: 

1. Type in a search term you think a potential customer might use and see what Google shows you.

2. Pick a website from the search results that looks good and grab its domain name (this is usually the bit after ‘www’). Head over to an SEO tool site like SEMrush. Put the domain name into the box in the middle of the screen, select your country from the dropdown and hit “Start Now” (You’ll need to create a free trial account to get the data you need).

The important data you’ll get by doing this will show you the search terms the site you picked ranks for, and the number of times each search term is used every month.

In no time at all, you’ll have a list of the search terms your ideal customers are typing into Google – along with an idea of how hard it’s going to be to position your new website on page 1.

TOP TIP: You can repeat this exercise using different domain names until you’ve developed a comprehensive picture of your market. You’ll also have a much better idea of how hard or easy it will be to get your website into the search results pages.

Review The Sites Already Winning Business Online

Now that you’ve got your search data (like the keywords you know people are using) it’s time to do some research around content. Specifically, what type of content is currently winning the attention of the people you want to sell to? Is it blog posts, videos, podcasts, webinars? 

In all likelihood, the pages appearing in search results are informative, helpful and educational content. 

For your business to succeed online, it needs to do the same. You need to create a content strategy based on your potential customers’ needs.

TOP TIP: Marcus Sheridan captured the process beautifully in his book ‘They Ask, You Answer‘, and I’d highly recommend reading it!

In A Rush To Get Website Traffic? Simply Buy It. 

To grab free traffic from Google, you have to become a recognised authority in your business area by providing the content your customers are looking for. It’s a significant undertaking with no shortcuts – although of course it’s worth the effort .

In the meantime, if the idea of creating content and slowly building traffic to your website from Google doesn’t appeal, there is an alternative: Google Ads and similar services from Bing, Linkedin, Facebook and many others.

In simple terms: you pay to appear in search results and news feeds, and secure new customers by buying their attention. It can be a compelling way to grow your new business – but it’s best to know in advance what that’s going to cost.

SEMrush provides an estimate of the cost of a click in Google Ads. You can find this in the data you previously gathered (in the column of data called CPC or Cost Per Click). Using this data, you can quickly work out what you’ll need to spend to get people to your website using this tool.

TOP TIP: Make sure you use a reasonable conversion rate. Not all the people who click your advert will buy from you. In fact, conversion rates from people clicking through from organic or paid search can be very low. For example: in professional services, perhaps only 2%-3% of visitors will reach out and enquire.

Be Realistic. It’s Hard, But Worth It!

Starting a business is a fantastic thing to do. If it succeeds, you’ll be one of only a few people who achieve this. But avoid getting sucked into the shiny stuff and frittering away your pot of startup cash until you’ve done some basic research – and considered the thorny issue of finding customers.

Arm yourself with data and head into your endeavour with eyes wide open. Good luck! You’ve got this!

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