Before you put the outline of your business plan together, take the time to refine and test the idea. At the end of this stage, consider if you can progress with the idea. If it has no realistic chance of success, you should drop the idea before too much time and money is invested.

1. Understand The Market

   The first thing you need to establish is whether there is a market for the products or services you plan to supply. Size up the need by exploring the following areas:

   Customer	Who needs it and why? What is the profile of a typical customer? How many potential customers are there? How much money are these customers spending? What are your potential customers’ top 3 key requirements? What are their concerns?
   Product/Service	What benefits does this product/service bring to the customer? How is it superior and/or unique to similar products/services?
   Price	What price would customers be willing to pay? Will this selling price enable you to make a profit after taking into account all your costs? How does demand and supply change with price?
   Place	How will these customers buy your product? Is it through a physical shop, an online platform? Or home delivery?
   Promotion	How will they find out about your product/service? How will they be enticed to buy your product/service?

2. Understand Your Competition

   Understanding the competitive landscape and critically assessing the competition is crucial to estimating your potential market share as well as setting realistic, achievable targets.

   • Who are existing and potential competitors?
   • What are their strengths and weaknesses?
   • How well-resourced are they?
   • How quickly can they adapt to change?
   • What kind of substitute products/services do they offer?
3. Test Your Idea

   The best way of testing a product/service is to go directly to the customer you are targeting. You can approach family, friends and entrepreneur outreach groups.

   • Get into the mindset of your customers. Ask them questions to learn more about them as potential consumers of your product or service.
   • Develop a prototype, mock up or sales presentation. Share it with a group of potential users, gather any feedback, refine your idea and test again.

   Not only will this help you to understand the demand for your product/service, it will also help to refine your offering or create new ideas, and eventually a better product/service.

   • Entrepreneurs Outreach Groups on the ACE website
   • More Enterprise Networks on the ACE website
4. Protect Your Idea

   Protect your intellectual property – this could be your brand, product, creative work or a new technology. You cannot protect an idea in its own right but you can protect the work you do to realise the idea through a patent, trademark, copyright or registered design.

   Learn more about protecting your assets and intellectual property.