On This Page

Vector of a pencil overlapping with a wrench. Represents the need to go out and test your business idea and verify that it works.

How to Validate Your Business Idea

Kody Wirth | Oct 29, 2023

You have an idea. You’re excited by its potential and eager to make it a business. 

But don’t pour your money into it just yet. 

You must answer this crucial question—will people buy your product/service?

Not sure? Then you need to validate if there’s a market for your idea.

What does it mean to validate your business idea?

Idea validation is testing the need for your product/service in the market. 

It should tell you if people are likely to purchase and if your idea can be profitable.

Validating your idea mitigates early risks. You gain insights into potential challenges and market receptivity before investing significant time or resources. You’ll avoid making a product that lacks market fit. 

And if there is a fit—use the process to refine your idea to better meet customer needs. 

5 steps to validate your business idea

Determine if your startup idea works by following these simple steps.

Card Icon

1. Expand on your idea

Learn More

You need to formalize your idea. Take it from a passing thought or scribbles on a napkin to an outline of how it works as a business. And you can use a one-page business plan to do it.

Learn More
Card Icon

2. Determine if you have a good idea

Learn More

Not every business idea is a winner. It may look good on paper but lacks qualities that allow your new business to grow. Learn how to identify those traits and determine if your idea is actually good.

Learn More
Card Icon

3. Conduct customer research

Learn More

You can’t just assume that people will like your idea. Sure, you should have data to support that theory. To be certain, you need to get out and talk to people. Here are six ways to do that.

Learn More
Card Icon

4. Test your product or service

Learn More

Conversations with your target audience should do two things—verify your idea works and provide valuable feedback on the product or service. Now, you just need to test it with actual users.

Learn More
Card Icon

5. Review and apply customer feedback

Learn More

It’s not enough to collect feedback, you need to use it. While we can’t tell you exactly how, try following a framework of categorizing the feedback, sharing it with your team, and requesting a follow-up.

Learn More
Card Icon

Bonus: Five things to do if you have an eCommerce idea

Learn More

Following the above process will help you validate an eCommerce product or service. But there are more specific steps you can take to fully vet your idea online.

Learn More

How to prepare a product or service for testing

What does it take to test a product or service idea with paying customers? Let’s introduce you to the concept of minimum viable product (MVP) and how to build products for testing.

Card Icon

MVP vs. minimum lovable product (MLP)

Learn More

The MVP is your bare-bones attempt to turn an idea into a business. But you can’t stop there. You need to go further and turn it into something your customers love.

Learn More
Card Icon

Tools to help design your product

Learn More

Are you unfamiliar with building products? Check out our books, courses, and tools to help you go from product concept to a testable MVP.

Learn More

What to do after validating a business idea

Your idea solves a real-world problem, works as a business, and interests potential customers. You appear to have market validation—so what now? 

Card Icon

Protect your business idea

Learn More

You don’t own your idea. So, how do you keep it safe? Learn what legal protections are available and how to start discussing your idea without giving it away.

Learn More
Card Icon

You have an idea but no funding—now what?

Learn More

You need capital to turn your idea into a business. While there are other necessary steps in the startup process, these four will fast-track you to pursue funding.

Learn More
Card Icon

How to move on if your business idea fails

Learn More

Following the idea validation process does not guarantee success. So, what do you do if your idea fails? Get back to basics and solve a problem.

Learn More

Dig deeper with market research

Validating your business idea will set you up for success or help you avoid something destined for failure. 

By the end, you will know far more about your business, the market you’re entering, and, most importantly—your customers.

But your research shouldn’t stop at validation. You need to dig deeper and fully define who your customers are, what they want, how they work, and your relationship with them. 

Click here for the next step in your startup journey—conducting market research.

Business idea validation tools and resources

Simplify the idea validation process with these templates and tools.

Business idea validation checklist

Want to find out if your business idea is a winner? Work through this checklist to test it.

Download Tool

One-page business plan template

Document your research, explore the specifics of your idea, and outline how it could work as a business.

Download Template

Explore your business idea with LivePlan

With a library of real-world sample business plans, industry benchmarks, and step-by-step guidance—you can quickly determine if your business idea works.

Learn More

How to validate your business idea FAQ

Expand on your idea: Formalize your concept from a passing thought to a detailed outline of how it works as a business.
Determine if you have a good idea: Identify the qualities that allow your business to grow and assess if your idea possesses them.
Conduct customer research: Engage with potential customers to understand their needs and gauge their interest in your product or service.
Test your product or service: Use feedback from your target audience to refine your product or service and test it with actual users.

Idea validation might involve conducting surveys, creating a minimum viable product (MVP) to test, or running a crowdfunding campaign to demonstrate traction. The goal is to gather evidence that your business idea is viable and that a potential market has interest.

Idea validation is crucial as it mitigates early risks. It provides insights into potential challenges and market receptivity before investing significant time or resources. You’ll avoid creating a product that lacks market fit and be able to refine your idea to better meet customer needs.

You should validate a business idea before investing significant time, money, and resources. This usually happens after you’ve developed a clear business concept but before you fully launch your product or service.

A business idea is worth it if it solves a real-world problem, has a potential market, and can generate sustainable profits. The idea validation process, which includes market research, customer feedback, and product testing, can help determine this.

Methods of idea validation include market research, competitor analysis, customer interviews or surveys, the creation of an MVP, and running small-scale tests or pilot programs.

To quickly validate an idea, use a research method that brings in a large amount of data with the least effort. Online surveys, social media outreach, or even pre-orders, for example. While speed is important, thorough validation is crucial for long-term success. Be prepared to follow up with in-depth interviews or some other form of hands-on testing.