How to Determine Market Viability for a Product or Service

Business is about making money. Even if you’re a genius and saint, you can’t stay in business unless you make a profit. Profitability is a lot more predictable than most people realize, but failure can still result if you don’t execute consistently on your business plan--or a hundred other factors that manifest unexpectedly. Here are some steps to take before you decide to make a go of a business idea.

Instructions

1. Compare your offer to a 3-legged stool, which cannot support weight unless all three legs are equal in length and spacing. One leg is the offer itself, which includes price and demand. A top quality offer at a competitive price is still a low fail if the other legs are not balanced. The second leg is the customer list. If you don’t know who wants your product or service, then you have nothing. The third leg is the process, language and messaging used to convey the value of the offer to the list.

2. Determine the mass appeal of your product or service. If only a very select few can benefit from it, then your offer may be too limited to generate enough revenue to justify the investment of taking it into the marketplace. Identifying a specific demographic target is a strategic necessity, but there is a certain volume required to break even and a much larger volume required for long-term profitability.

3. Measure the uniqueness of your offer against all competitors or whoever shares your market niche. The more unique your offer is the more likely it will gain share against your competitors.

4. Assess the exclusivity of your offer. If your potential customers can get your product or service somewhere else, then you will be forced to find another factor to differentiate your offer from the competition. If your offer cannot be found anywhere else, your business will benefit invariably.

5. Test the perceived value of your offer. In order to be successful in business, you must be able to sell your product or service at a price point that is commensurate with what people are willing and able to pay. Ironically, you can under price an offer as well as overprice it.