Sounds too good to be true, right? You might be surprised! Author Tim Ferris walks us through 4 simple steps that every budding business owners can use to come up with a potential money-making machine!
Step 1: Figure out what your idea will be. Do some research and find out what people are interested in and what they will spend money on. This is the step where you write down any and all ideas that come to mind. You might want to search popular forums on the Internet, such as Ebay, LinkedIn, Craigslist, Kijiji, etc. Think of things you do on a regular basis; what would make these things easier in the long run? Be realistic.
Step 2: Find your customers. What is your "buyer persona" or target market? After you've identified an idea, the next natural step would be to find your customers. Make sure you research the market trends. Will your market be seeing significant changes in the next while? Sites such as Google Trends, Google Insights and Facebook ads will help you in this process.
Step 3: Calculate the value of your customers. Once you’ve found your idea and potential customers, you’ll need to calculate the value of those customers. The formula to do this is as follows:
1. Find out how much it costs, on average, to buy your proposed product. This will be your base cost.
2. Next, indicate what your recurring costs of your product would amount to.
3. Research the life expectancy of the product. This is the number of times customers have to pay those recurring costs.
Step 4: Validate your idea. Here comes the testing portion. Will people actually buy your product? Two ways to do this: Drive traffic to a basic sales page. Email 10 people you know who would want your would-be product, and then ask them to send payment via Paypal. This will teach you the overall response to your product.
If by the end of the above steps, you’re still feeling confident, you might just have a great idea on your hands. You’ve done your research and you know that there will be a market for it. Now you can get started on actually building the product and selling. Good luck!