This term relates to the process of determining which business ideas offer valuable opportunities and are worth pursuing. As such, evaluating ideas and opportunities gives entrepreneurs a better chance of achieving commercial success.
It’s relatively easy to evaluate your ideas and opportunities, in five easy steps:
Create a simple list of assumptions about your business, such as its goal, the problems it solves, who its target audience is, and why it’s a viable business.
Interact with people in your target audience to validate your assumptions. Is your problem-solving idea really needed? What current options do they have to solve them already? Re-evaluate your concept to align with what you’ve learned.
If possible, create a prototype to gauge prospects’ reactions. Then gather user feedback to inform future development.
Research competitors’ prices and ask prospects if they would be willing to pay your projected rate. Weigh the price with the cost of production to determine if the business idea is a viable opportunity or not.
Develop a minimum viable product (MVP) with only the essential features to gather hands-on feedback and identify growth opportunities.