Give some thought to these issues before launching your million dollar idea.
This story is published in partnership with Entrepreneur. This story originally appeared at Entrepreneur.com
Sujan Patel, ENTREPRENEUR
Do you have a million-dollar idea in your head, just waiting to be acted upon? Or will it be a complete bust — an idea with no actual potential for return?
This question is one that stops many would-be entrepreneurs in their tracks before they even take the chance and launch their potential business ventures. Fortunately, it is possible to make a more educated guess on your idea’s likelihood of success or failure by taking the time to validate your idea before moving forward with it.
Here are 20 questions you can ask to validate your startup idea — before you commit significant time, money or other resources to its launch:
1. What problem are you solving?
If you can’t clearly state the problem your product or service solves, you probably don’t have a successful idea.
2. How have others attempted to solve this problem before, and why did their solutions succeed or fail?
There’s a lot you can learn from those who have gone before you.
3. How many specific benefits for your product or idea can you list?
The more you can think of, the more likely it is that you’re meeting a real need and can be successful.
4. Can you state, in clear language, the key features of your product or service?
Not being able to easily describe the key features of your idea is a warning sign that the idea isn’t well thought out yet.
5. Does your idea already exist in the same way you were going to create it?
If a similar solution exists, how will yours be different? If you don’t have any clear differentiating benefits or features, you likely need a new idea.
6. Who are your potential competitors?
Having competitors isn’t a bad thing — it means a market exists. However, knowing what you’ll face if you launch is important, as an overcrowded marketplace or one where consumers have a strong affinity for the dominant brand may be more difficult to break into.
7. What key features does my product or service have that others will have a hard time copying?
Before you go into business, you need to be very clear about what sets you apart from competitors.
8. Have you done a SWOT analysis?
This framework helps you to understand the strengths, weaknesses, opportunities and threats that your idea has, giving you a better idea of the overall likelihood for success.
9. Do you have access to the various resources you need to launch a business?
While you don’t need to be rich to launch a business, you will need some combination of time and money, depending on the scope of your idea. If you have no way to access everything you need, you’re better off waiting to launch your company until your situation is different.
10. Do you have a mentor or industry advisor that you can call on?
Certainly, you can go it alone if you have to, but when you start a new business, having the advice of others in a similar business space can prevent unnecessary expenditures or missteps.
11. Can you name somebody who would benefit from your product or service?
This is the beginning of market research — who do you actually know that would use your idea? A general demographic isn’t enough, so take the time to hone in your target buyer personas.
12. What is the size of the market that will buy your product or service?
If you don’t know the size of the market, you have a lot of research ahead of you. Understanding how many people need your idea — and what they’re willing to pay for it — will help you determine whether your concept is viable.
13. Have you reached out to potential customers for feedback?
Getting feedback before investing further money can help you avoid creating a product or service that nobody really wants.
14. Can you set up a landing page and encourage interested people to sign up for more information?
This can be an easy and inexpensive way to test interest in a product or service. If a lot of people are interested, it’s a great sign that you’re on the right track!
15. What would it take to build a minimum viable product to test the market?
One mistake many entrepreneurs make is thinking that they have to launch a finished concept right away. Consider starting small, gauging interest and iterating as you go.
16. Can you get paying customers from your target market to pre-order based on a blueprint or mockup?
Pre-orders are a solid sign of customer commitment. Someone saying they’re interested is one thing, but seeing people actually pony up their credit card information is a much stronger sign of potential success.
17. Can you produce the actual product yourself, or do you have a partner who can?
As you might expect, before launch, you need to know who’s actually going to produce the first set of products or services, as well as whether they can do so within your budget.
18. Do you have distributors or partners to help you scale your business?
Once you have paying customers, you’ll need to ramp up actual distribution to meet demand. Do you have access to the partners and/or money needed to do so?
19. What will it take to break even or make a profit?
Some ideas take a lot of upfront investment, while others don’t. If yours does, it’s a good idea to plan for how you’ll handle your finances and daily needs while you’re waiting for your product or service to gain traction.
20. How can investors in your idea make a profit?
If you want others to come alongside your business and help you grow, you’ll have to know how they can benefit.
It may take some time to come up with answers to all these questions, but once you have them, you should have a better idea about how viable your idea is. If it passes these tests, go for it! If not, keep thinking — your next idea may be the one that changes the world.