4 Important Tests for Any Startup Idea

Before you invest too heavily in a startup idea, it's important to test its viability.

We've all had ideas for startups--probably dozens of them--but that doesn't mean all of them are worth pursuing. What seems like a good idea in your head may not be feasible, or even possible, and just because it's feasible doesn't mean it will be profitable.

Before you get carried away with an idea, it's important to put it through these tests to evaluate its true potential:

1. Competitive research. First, take a look to see if anyone else has already taken your idea. Run a quick Google search and see if there are any businesses with your model in place. If there are too many competitors, there won't be room for your business to emerge as is. If there are too few, your idea may be too novel or niche.
2. Potential profitability. You'll also want to sketch out the potential profitability of your business idea. Learn how much it would take to start your business from scratch--a ballpark estimate is fine here--then learn how much it costs to produce your goods, and how much you could feasibly charge to see if you could break a profit consistently.
3. Consumer interest. It doesn't matter if your hypothetical model is profitable if consumer's aren't buying what you're selling. Conduct market research, especially in the form of interviews or surveys, to determine how interested your target demographics would be in your solution.
4. Experienced insight. Finally, talk to an experienced entrepreneur--it could be a mentor or a peer--and see what their thoughts are. They may be able to provide you with the critical insight you need to make your idea better or spot a crucial flaw.

Just because an idea fails these tests doesn't mean you have to scrap it entirely--it just means it requires further improvement before it can be acted upon. Some of the greatest business ideas of all time have emerged from poor ideas that were refined to become something better. These tests merely provide guidance in that regard.