This is the second part of the 3-series article about reasons to reveal your business idea. See Part 1.
Once you got to know the first reason to share your business idea and stop hiding it with the fear of it being stolen, let me convince you more to do so. There are next arguments on the case.
2. IT HELPS YOU TEST YOUR SALES PITCH
The second reason why it is helpful to bring your business idea to public and not keep it in secrecy is related to testing your sales pitch.
What’s a sales pitch? It is a concise and accurate set of sentences that you will use to present your business.
And why is it important to test it? To answer that question, we will need to look at two major points.
You prepare to meet investors
Sooner or later, if you’re building a business that will require external capital to grow, you will need to search for investors.
When you finally get to meet them, you will most likely have 3 minutes to expose and sell them your idea.
Also, usually you won’t receive the funding from the first investor you engage with. It will require multiple meetings and trials, and from one meeting to another you should understand where you can improve and perfect your sales pitch.
So what I’ve noticed is that the sooner you start working on your sales pitch, the better.
Yes, it will also help you earning your first customers. But most of all you will get used to present your business so you can benefit from any random occasion that can result in a great business opportunity.
It sucks to talk to someone important and notice the time passing by without being able to show the great things you’re doing. I have been through that plenty of times.
If you don’t have a polished pitch describing your business, you’ll end up missing some of the most relevant facts like a solid business case that could be killer.
And that can lead to missing some outstanding opportunities.
You learn the perception of your business
Whenever you present your business to someone, his or her body language, such as eyes movement, positioning, and apparent interest will tell you a lot about how good your product or service is.
After you try different verbal approaches to defining your concept (which will definitely happen before you have a standard sales pitch), you will start seeing what are the ones that work better for your target market.
So what should you do? Note down the reactions!
And even if you do not use them right now, make sure you remember to use them later on when you’re developing a marketing copy.
You test the demand for your product
A third benefit of intentionally communicating your solution lies in the possibility to check the product and observe how customers interact with it.
Typically, this is easier in the cases of equipment or hardware, because you have something physical to show to people, but it can also work with services.
In fact, in both cases, by presenting your offer to a potential future customer, you will gain incredible insights on how the customer sees and values the product.
Side note: when testing a product, it doesn’t matter if it is a service, a solution or a physical product, you should test a Minimum Viable Product (MVP).
You might already know what an MVP is. When presenting to a customer, make sure you have the core features to show to your client.
By core elements I mean to replicate the exact same core experience the customer will have in the future. You don’t need the product to be perfect. All you need is a very basic product that responds to the primary need of that customer. Neither more nor less.
When presenting the MVP you want to look at the potential customer’s reaction and spontaneity. What do his eyes say? Does he seem fascinated by the product or not that much?
But most of all, whenever he tells you that the product is outstanding and that he loves it, you will want to perform the ultimate test:
Ask if he would like to buy NOW.
This perception shift will tell you if the person is authentic or just friendly. If he truly loves your product, he will quickly pay in advance. When that isn’t the case, the potential customer would say something like:
“Well, yeah… I can see a market out there for the product; I think I’m just not the right person, but I’m sure a lot of guys would be interested.”
I’d like to tell you another story here.
Back in 2014, I was at a Healthcare Management Conference in which an Executive Director of the largest private healthcare group in Portugal was speaking.
He told us a story of when his corporation developed a new service to provide caregiving to elderly people.
They’ve performed thousands of tests, hired this large market research agency and invested millions in the development of the service.
Why? Because everywhere they went, people were encouraging them to move forward, telling them that it was a brilliant idea to have a business around premium caregiving centers for elderly people.
Now, it doesn’t matter if today that business exists and has a market (I honestly don’t know), what is important is that back in those days, this company went ahead with the project, only to verify that no one would put their elderly relatives in a premium caregiving center.
It is the same as saying that no one would pay for it.
So they went back to their customers and asked them why weren’t they moving their parents into this caregiving center. And all of them suddenly said:
“Well, it is a fabulous idea, I’m sure it is! Just not for me, I want my father to stay at home.”
Well, this is kind of interesting: you see, people that can afford a premium caregiving center can also afford to have a personal assistant helping their parents in their own homes.
The company just didn’t understand that there is a huge gap between asking people if they like the product and, in fact, asking them to pay immediately. If only they had done that earlier…
Fortunately, we have the privilege of learning from others’ mistakes, so let us at least make different ones.
I hope you are more and more convinced to stop keeping your business ideas secret! Nevertheless, I have one more ace up my sleeve. I will reveal it in the last part of the article that will be published soon.