How To Validate Your Business Idea With Crowdfunding

crowdfunding

Continuation from yesterday……(The Secret Behind Validating Your Business Ideas)

Ask Your Friends or Associates If They Would Buy Your Product or Service Today.

Typically, most people ask for opinions. They tend ask their friends and associates if this might be a good idea. Do not fall into this trap. Understand one profound truth. About 95% of people you associate with will tell you that your product or service idea is the best thing since sliced bread. The truth is, they don’t want to hurt your feelings or tell you what they really think about your product. One way around this issue is to offer your product for sale as a “Pre-Order” to your family, friends and associates.

As soon as the money enters the picture you will, for the first time, get an honest feedback. If people begin to buy or pre-order, you must assume that you have a legitimate product idea on the table. Yet, if people begin to give a million different excuses, you must learn to read between the lines. What they are really telling you is…..”Your product or idea suck and we want nothing to do with it”. If that is the case you must go back to the drawing board and rethink your entire idea and approach.

Example: Create a one page flyer outlining what you Pet Smart Phone will look like and what it will do. Outline all of the benefits and selling points for the potential buyers. Include a picture of a finished product and a price. Approach everyone within your circle of influence, pass on the flyer and ask them to think about the idea for a day. Approach them the following day and ask for their feedback. If the feedback is good, ask them for a pre-order. If they are not ready to commit, your idea is not that good.

Build A Crowdfunding Campaign.

If the “Friend Test” above is successful it is time to find out what others think. The best way to do that is thought a quick crowdfunding campaign. If you are not familiar, crowdfunding is the practice of funding a project or venture by raising monetary contribution from a large number of people, typically via the Internet. In our case you would build a crowdfunding campaign for your Pet Smart Phone by outlining what you are planning to do, what the end product will look like, the benefits for pet owners and how much money you are looking for. In return, you would offer the completed product when ready. Essentially, you are taking pre-orders and using the money to build your product or service. To be delivered to your backers at a future date.

An important note: Do not attempt this step until you are ready and fully committed to going forward with your idea. Raising money from outsiders and not delivering on your promise or deciding not to go forward thereafter is not only unethical, it is borderline criminal.

There are a number of websites where you can build your crowdfunding campaign with ease. The two of the most popular sites are Kickstarter.com and Indiegogo.com . There are many others in almost every category imaginable. Simply Google crowdfunding to find the right website for your project. And while it is free to post your project, the sites offering the service will charge you a percentage of the money raised.

Once you have selected the site that best fits your needs, post your product or service idea on it. Outlining the product, the benefits and when you will deliver on your promise. Then use social media to promote your crowdfunding attempt and see what develops. If people believe it is a great idea they will start pre-ordering. The best part is, no one knows how successful your campaign might become. There have been numerous instances where entrepreneurs have tried to raise a few thousand dollars to get their projects started, only to raise a few million instead. All because others thought it was such a great idea as well. Who knows, your brilliant idea might be the next runaway hit.

To Be Continued Tomorrow…..(Why Am I Seeing This On A Financial Website?)