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4 Simple Steps to Minimize Failure For Your Next Business Idea

Photography: Martin Kingsley

So you’ve got an incredible idea for a new business, and can’t wait to roll up your sleeves and get to work. However, before you pour dollars and hours into creating your product, it’s a good idea to see if people are actually willing to buy what you have to offer.

Why not just conduct a survey, I hear you ask. Well, I’ve learned that survey data can’t be relied upon at all. During a business implementation class in university, one of our assignments was to conduct a survey and see if our product had sufficient demand. We surveyed our fellow students and asked if they would be interested in buying our Japanese fried cakes, which we planned to offer in campus for a week.

8 out of 10 of our respondents said yes. We based our sales projections on this figure, and projected a 250% return on investment. When we actually sold our product however, we hardly broke even. If it wasn’t for some very persuasive sales tactics and risking annoying our friends, we would’ve reported back a huge loss to our professor and received a relatively low grade for the implementation part of the assignment.

You see, most people are polite and hate saying no. How do you circumvent this? Instead of asking people if they would buy, the most reliable indicator is to actually ask them to buy right there on the spot even if you don’t have the product available yet.

This method is called dry testing, and we’ll be using this method with Google AdWords to check if there’s potential in our business idea. Before we begin, decide how much money you’re willing to put in to test your product. A reasonable budget is $500; but ideally, $1000 would do the trick.

It might seem like a lot, but think about how much money and time you’ll save in the long run. No need to pay programmers to code your website, or a designer to design you a logo, or a copywriter to create your salesletter — you can do it all on your own and test the raw potential of your business all by yourself.

Step 1: Analyze your competition. Duration: 1 day

Detailed market research really is a whole other post by itself and is beyond the scope of this article, but for basic purposes use SEOBook.com’s keyword suggestion tool to look for top searches. Find several key phrases that people are searching for, then head over to Ask.com and use their “expand your search” and “narrow your search” tools to find what else people are typing in. You can also use Google’s Keyword Tool for more suggestions.

Take the top 3-5 phrases and take a look at the ads that show up on Google’s Sponsored Links. Read their salesletters and note down the good parts, and figure out how you could improve on their offers.

•    Can you offer more credibility with your product?
•    Can you provide a better offer than they do?
•    What about your pricing? (Don’t slash your prices to undercut the competition; instead, figure out how you can provide more value for the same price by giving bonuses and such)

Now is a great time to start building your swipe file as well.

Step 2: Set up the website for your product or service. Duration: 1-2 days

Start writing your salesletter by using the bits and pieces you like from your competitors. Rewrite it so you’re not outright plagiarizing their work. Your salesletter should be about 300-700 words long and must be able to:

•    Attract your customer’s attention
•    Gain their Interest
•    Build their Desire for the product
•    Inspire them into Action

At this stage, you don’t need to hire a copywriter just yet. This four step process, AIDA for short, is a fundamental copywriter’s formula for a good salesletter and should do for now.

Set up your website so it flows like this:

If you have Dreamweaver, go ahead and use it to create your sales page; if not, a tool such as Weebly should do the trick. Get a “Buy Now” button by doing a Google image search and link it to a page with a form that asks for the buyer’s name and email address.

No need to pay for Aweber or GetResponse just yet. Instead, sign up for an account at CampaignMonitor and use their code for a form. You only pay when you use their service to send emails, so you can use them to capture leads and export the email addresses once you need them. Formspring and WuFoo are also a great alternatives for those who need more fields in addition to the name and email address.

But instead of taking their payment details, take them to a page that says your product has been sold out and that they’ll be notified by email once it’s available. If you’re selling an info-product, you can say that the 1st edition is off the market and you are now working on the 2nd edition. Install Google Analytics and set up goal conversions on your “sold out” page. This will allow you to see how much people “bought” your product.

Doing the above requires some technical skills, but readers of Geekpreneur don’t really have much of a problem with that, do they? 😉

Step 3: Set up your AdWords account and test your product. Duration: Less than 1 day

Once you’ve signed up for Google AdWords and put in your credit card information, set up a new campaign and create two ads to test. Write your ads so that it highlights your differentiators. Write a compelling headline, use the first 35 characters to highlight the main benefit for your customer and the second 35 characters to state your offer.

Use keywords that have high commercial intent (to determine this, use Microsoft’s AdLabs tool). It’s ideal to aim for the first or second position with your ads; however, if your keyword is the slightest bit competitive expect to pay at least a dollar per click for positions 1-3. This could get very expensive, and since we don’t know what type of ads work just yet, we’ll save this for when we’ve actually gathered enough data.

For our test purposes, set your maximum CPC at $1.00. You’ll only pay approximately half of that — that way, your $500 budget will get you around 1,000 visitors which should be sufficient data during this test period.

Step 4: Test, tweak, and then test some more. Duration: 5-7 days

Take your overall budget and spread that out over 5 days to determine your campaign’s daily budget. At the end of each day, look at your click-through rate for each of the ads. If one ad seems to be pulling much better than the other, delete the less-effective ad and use the one that gets more clicks. If you created a different campaign for search network and campaign network, switch all your ads to the one that pulls better.

If your product doesn’t seem like it’s bringing in “sales” (you’ll know through Google Analytics), don’t give up yet. Here’s the process of the things you should test before determining your test a failure:

It might be that your ad is irrelevant to your product. If it’s not the ad, then maybe the salesletter is the problem and you might have to test a different offer. Maybe have a better guarantee (“we’ll refund your money and pay you an extra $50 if you don’t like it” is a great guarantee) or include more bonuses. And if it’s not the offer, maybe you need to sell a different product altogether.

It’s only once you’ve gone through your ads, your offers, and your products will you be able to determine whether that particular market will bite. If the market is the problem, then maybe your business idea isn’t all that great and you need to move on to the next one.


The entire process takes about a week, but can be done in as little as 5 days if you know what you’re doing. Carefully monitoring the results will give you all sorts of useful data — the type of headline that works, what type of offer brings in the most customers, and you can even test the title of your product through this method.

You will also get an idea of your cost-per-conversion, or how much it’ll cost you before someone decides to purchase. This should help you identify a reasonable price for your product.

And there we go. Much more can be written about this method but this should do for now. Have you tried a similar method before? What sort of results did you get? Can you share your tips with the Geekpreneur audience? Discuss and comment below!


  1. Yannis Says:

    AIDA, Powerful and effective...test the water, before diving in...this process takes away part of the not knowing.

  2. Andrei Says:

    Found your post through StumbleUpon. Although I almost never leave feedback, but I was compelled to do it this time.
    I really like this post and I like your approach of testing a product or an idea for minimum investment. Thanks.

  3. Nate Moller Says:

    I will be blogging about this: I teach clients all the time who are looking to start an online business. This seems like a quick way to eliminate a lot of the crappy ideas that people come up with 🙂

    Thanks again. I'm glad I found this article though SU too.

  4. Dave Says:

    Great post, thanks. I generally assist people with web design basics etc. I often receive questions about Adsense/Adwords and I'll be passing on your link as a way to assist them. Have a great weekend and thanks again.

    P.S. I also found this on SU

  5. Xander Says:

    Thank you Carlo and thank you StumbleUpon.

    Great post!

  6. Ron Meledandri - Sentra Business Solutions Says:

    Your post makes some very good points - especially about the reliability of surveys. However, I just wouldn't cast surveys aside as a useless tools. They do have their place if the correct questions are asked. Many times surveys ask what people would like to buy as opposed to what they can (afford/need)to buy. The same is true for effort. Ask me if I want to be a great golfer and I will say "yes!" Ask me if I am willing to practice golf 8 hours a day as Tiger does and the answer is "No." A survey needs to be complete in order to be reliable. Frank Luntz gives some excellent examples in his book "Words That Work." The same question using different words brings totally different responses.

  7. Online Surveys for Business Start-ups Says:

    Hi Carlo, Hi everyone,

    Quite old post here but still relevant to be commented. Good info here but I don't agree as well regarding the survey point.
    And you actually say it well, it is hard to get some relevant feedback from people you know.
    The agency would provide you with access to a precise and qualitative panel, ensuring you of a sample of your target market. Unless you already have your own database, it will be hard to reach such a relevant and representative panel through forums, family and friends.

    Online Quantitative Market Research (surveys) are important but many entrepreneurs don’t do it – not least because of the supposed cost. Trust me, it is become really affordable, even for business start-ups!

  8. eric Says:

    Thanks again. I'm glad I found this article though SU too.

  9. Scott Owens of SME Research Says:

    RE. the comment above regarding market research - I agreee, the market has really changed with the advent of online surveying, which has really levelled the playing field for small start-up businesses. You can now conduct effective and affordable market research for very little and get your business off to a flying start.

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