The best way to test an idea is to go to the market place and seek out actual prospects for the idea. Then, try to get them to sign a non-binding Letter of Intent that should you bring this idea to the market place they would be interested in buying it. In the process, you will find out all sorts of information, including the fact that you may be the fifth person that’s been to see your prospect with the same idea in the past six months. However, make sure that the letter is on their corporate letterhead. If they are willing to provide you with such a letter then this is a pretty good indication of your idea’s market potential. If not, maybe it isn’t such a good idea.
For example, a typical letter, which has been used many times in all kinds of sales situations with great success, might go as follows:
Please consider this non-binding letter of intent as an expression of our interest in your idea for ( x ) should you bring it to market. Under no circumstances is this a commitment on our part to buy ( x ), but rather just an indication of our possible interest.
These letters of intent will be enormously valuable in raising money for your new venture. Of course, some new Internet-based entrepreneurs test the market by getting orders for new applications before they build them, which is even better. This is really testing the marketplace.
Tips for a Potential Entrepreneur
- Force yourself into new job opportunities. From success comes confidence and confidence is key.
- Take a sales training course. You’ll be amazed how little you know about selling.
- Look for unfulfilled opportunities. Most companies can’t provide all the products or services their customers want, particularly, technology companies.
- Be cautious about going into business with friends and family. Business can put stress on any relationship.
- Don’t give away the equity store to attract people before you found your company. It will be very expensive and you’ll regret it later on if your company becomes successful.
- Risk is often a state of mind because most people are afraid of change. The question to ask is if this new venture fails will I be able to get a job easier than I if I stayed in my current job? The answer will usually be yes.
- Don’t be afraid of failing. This is easier said than done but the truth is that most entrepreneurs fail but many also try again, or again, until they succeed.
- As an entrepreneur you will have all the problems you had before but the good news is that you won’t have to explain, or justify, any of your decisions to anyone.