What are the best tools for analyzing your business idea?

The best way to analyze business ideas is to understand your market, customers, and the problem you’re solving . Here are some great tools that can help you to gain this understanding quickly and inexpensively:

• Google keyword tool (or any other keyword research tool)
  Use it to research keywords, look for things your target customers would type when trying to solve their problem. This will help you to estimate the amount of interest people have in your solution.
• Instapage (or anything else you can use to build a landing page)
  Use it to quickly create a landing page, which is by far the best way to quickly test your idea. Describe your niche, address the target customer, explain the problem you’re solving, and your solution. Add a signup/buy form, to measure the interest.
• Facebook Ads
  Facebook ads are by far the best tool that allows you to quickly put your idea in front of your audience, because they allow you to target very specific people. Think about your perfect customer — gender, age, location, interests. Or just target the people who have followed your closest competitor. Create an ad briefly explaining your offer, and point it to the landing page.
• Google Analytics (or any other analytics software)
  Use analytics to track the incoming traffic and conversions. That will tell you how many people were interested in buying your product or service. In combination with Facebook Ads, you can immediately get a rough idea of your conversion rate and customer acquisition cost.
• Optimizely (or any other split testing software)
  Use it to A/B test several versions of your landing page to see which one works best.

Evaluating your business idea

These tools, used together, can enable you to find out if your idea is viable in less than a day. Here’s what you do:

1. Come up with a good product pitch. Title, tagline, etc.
2. Create a landing page that conveys your idea well, and has a good call to action.
3. Use ads to send your perfect target audience to this page.
4. Use analytics to find out your conversion rate.

Your Customer Acquisition Cost (CAC) is how much money you’ve paid Facebook for a lead multiplied by how many of these leads have decided to buy your offer.

Your Customer’s Lifetime Value(LTV) is how much money, on average, you expect to make from each customer. For example, it can be a price of your product/service.

If your CAC is less than the LTV — that means you will make more money than it costs to acquire customers, aka — you have a solid viable business idea.

Do you have questions about building and growing an online business? Send them to advice@startuplab.io, and I will answer the best ones in my future posts!