Litmus Test Your Business Idea

magazine_money_logo_coverThink you have a money-making concept? Well, so does every other entrepreneur, yet small business failures increased 40% between 2007 and 2010, says Dun & Bradstreet. In this dicey climate, how can you tell if an idea you’re toying with could take off? Eventually you’ll have to funnel hard numbers through a business plan, but before you get there, use these online tools to test the waters.

-CHECK DEMAND. Plug a few relevant terms (say, “pet boutique” and “Fairfax”) into Google’s keyword tool, via adwords.google.com, to see how many people are searching the topic. “Google Search is a definite barometer for what people want,” says Howie Jacobson, author of Google AdWords for Dummies. Another way to gauge interest: Create a single web page to announce your business and invite people to sign up to be contacted when you launch, says Rich Sloan of StartupNation.com.

-ASK YOUR AUDIENCE. Reach out to a handful of people in your target market to get their opinions. Zoomerang.com allows you to poll as many as 100 people on up to 12 questions for free; for a fee Zoomerang will create a panel of respondents. You can also use a crowd-sourcing site like ideascale.com to solicit open-ended feedback, says Sloan.

-RUN THE NUMBERS. The startup calculator at homebiztools.com/startup.htm helps you do back-of-envelope math for one, three, and six months of operation. It includes 25 cost categories, divided into one-time and recurring expenses. Even if you can’t fill in all the blanks, you’ll get a general idea of the overhead hurdle you’ll face.

Etelka Lehoczky, 2011

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