How To Test Your Business Idea for Less Than $100

i-want-this-bad

The classic entrepreneurial mistake is building a product that you think serves a market need without ever doing any testing, pre-selling or the market research necessary to be success. We set-up blogs, websites, e-commerce stores, or build products and then it’s like okay now do people even want this? Nothing is more demoralizing than spending your money and time building something only to find out no one wants it.

Failure is an unavoidable part of the learning process for online hustlers, but testing your idea or concept can save you a ton of resources. I use this method to validate whether buyers intent exists for the product, keyword or niche I plan on entering.

Protip: Not all keywords were created equally.

You may generate thousands of visits from one keyword, but the conversion rate will be low. Unless you’re running a blog or affiliate site with a decent CPM  campaign (cost per thousand impressions), your goal is to drive conversions not traffic. This is why it’s critical to determine the buyers intent behind keywords and establish whether your idea is viable for the niche market.

Remember that this is just the very beginning step for building a profitable online business and The 1,000 Day Rule still applies. Using this method will save you a lot of time.

Step 1.) Buy a domain

The domain name should include a keyword related to your niche and be two words. You can get away with three word domains, but I wouldn’t use anything higher than that. You want to stick with top level domains like .com or .net or you can come up with a cute name like considerhiring.me (the coolest domain name I own).

The keyword rich domain does not have to be the final name for your product. We’re only testing to see if people are interested in buying our idea. You can type the main keyword into lean domain search and it will spit out a bunch of available domain names for you. Alternatively you can search for your niche using a tool like Long Tail Pro and it can identify available exact match domains. Don’t waste too much time on this part. Domains aren’t as important as the product.

Example:

I am creating an information product that will teach people how to bench 225 lbs. It will be a workout guide, strength training tips and videos.

The domain that I purchased using Namecheap is Bench225.com.

Step 2.) Install WordPress / The Launch Effect

If you don’t know how to install WordPress already, just refer to this five minute guide. If you’re using fatcow and adding an additional domain, it’s critical that you create a subdomain (add domain -> pointers -> subdirectory) or else you’ll install wordpress over an existing site and ruin whatever you had previously built.

The Launch Effect is a free wordpress theme (with a premium option) that allows you to create a beautiful landing page with ease. When you set up your landing page, you want to try a few variations of text that you think may motivate people to make a purchase. Since we don’t actually have anything to buy at this point, you want them to submit their email address.

We’re pre-selling a non existing product. Our conversions are measured each time someone drops their email address. Of course your offering may not be as compelling as the real thing, but it’s a good test to see whether people are actually interested in buying.

To find an image to use as the background of your site, I recommend searching on Foter.

Here’s what Bench225 looks like.

Bench225.com hosted on Fatcow, with WordPress + The Launch Effect

Bench225.com hosted on Fatcow, with WordPress + The Launch Effect

Optional: You can link the Launch Effect to your Aweber email marketing software for a drip campaign or auto responder series. Remaining in communication with potential customers will dramatically increase your sales when your product goes live.

Step 3.) Advertise on Google & Facebook

Pay per click advertising is a solid way to drive targeted traffic to your website, to test buyers intent. You can setup an account on Google Adwords (introduction & overview) and begin bidding on keywords related to your business. My recommendation is to bid for a mid-level spot. It’s not worth wasting money for the top ranking and can alert competitors to what you’re doing.

A lot of marketers are shifting their budgets away from Google and onto Facebook in 2013. It will be more expensive to advertise on Facebook because you’re driving traffic to a URL and not branded page, but I recommend spending $40-$50 there as well as Google. Depending on the niche that you’re entering, you may have better results from Facebook than Google or vice versa. Online business is all about testing and then optimizing the results.

To Do:

We often obsess over the image and text, but as Plenty of Fish has proven you can generally throw all of your assumptions out of the window. Just try something and if it’s not working, switch it up.

Step 4.) Make a Decision

After you run this campaign for two weeks or so, you want to compile all of the data and make the decision whether you move forward with your original idea, pivot to something else or scrap it entirely. You should be able to calculate what the average cost per user is and click through rates on your advertisements. This gives you a good set of data to estimate or build a marketing budget for when you actually launch.

If you spend all of this money on advertising and brought a thousand or more people to the website with only a handful of signups, well it’s possible that your offer or product just isn’t compelling. This isn’t necessarily a sign that you should quit, but if you can’t convince someone to give up their email address, you probably won’t be able to get them to make a purchase.

If you run this test campaign and you’ve got more signups than you thought and people are ready to click buy now, well then you have to get back to work :).

This post was originally featured in The Cartel, a mastermind networking group for online entrepreneurs and hustlers.