This is a guest post from Kevin Kaiser of Startup Biz Blog.
So, how much time have you spent writing your business proposal? Are you reading this article because you’re trying to kill time on the internet rather than trying to find investors, or are you hitting dead ends when you do put yourself out there and get your proposals in to investors or banks?
Here’s an idea. Test your business model first. Before you go through the stress of convincing other people that they should spend money on your idea, it might not be a bad idea to do a little research and make sure that the data actually supports your business idea. Investors, after all, seem to like a little independent information as do most of us when we’re making a large financial contribution to anything (source: Bottom Line Concepts).
But wait. Don’t spend thousands of dollars on those traditional market surveys or test groups or whatever we used in those dark, pre-internet days. Thanks to that seemingly ever-present search engine favorite, you can now conduct your very own market research from the comfort of your home, office, or internet café. Google AdWords can be your best friend when you launch an online business, and making good use of it can save you time, effort, and plenty of hassle.
Using AdWords is incredibly simple and, compared to many market research schemes, cheap. Just set up a web page for your business. It doesn’t have to be fancy or impressive (yet), but it does need to get your point across and sell your product or service effectively. Set up your AdWords campaign (the whole thing will only cost you about $500) and pay close attention to the analysis that the program provides you. You may even make a few customers out of the deal and learn a bit more about what your target audience needs and wants in a product.
If in the process of all your research, you suddenly discover that you have competitors, never fear. In fact, many experts and investors use competitors as an earmark of a good business concept, not a flawed one. The presence of competitors, they say, indicates a higher probability that there is a market for the goods or services associated with your idea, and competitors have a way of keeping business owners streamlined, effective, and motivated. Always a good combination where large sums of money are concerned.
If you think this ‘sounds like a good idea, but this won’t really work’ you need to think again. I’ve used this concept myself many times. And lucky I did as well. It helped save me from pursing lost causes and also showed me that I would be able to pull off starting a web-based surety bond business.
Doing a bit of legwork and research before you start looking for money is definitely the best possible situation for both you and your investors. Forcing yourself to empirically examine your future competitors and market conditions will give you a more realistic picture of what you can expect when you get out there into the real world. And investors will be impressed with your forward thinking and initiative. Plus, that business plan you’ve been putting off will sound stronger, have more polish, and stand out from the crowd which is critical in today’s competitive market.
Kevin Kaiser is the author of Startup Biz Blog, and has been working with online startups exclusively for the last two years. When he’s not working, you can normally find him reading or cutting the grass. If you enjoyed this article you should consider subscribing to his blog.