Validating your idea in 8 steps

Once you have a concept, you need to validate it through market research. This helps you:

• Understand your market landscape
• Identify your customers
• Analyse your strengths, weaknesses, opportunities, and threats (SWOT)
• Define your unique value
• Assess risks and success factors
• Identify key stakeholders
• Study competitors to set a pricing strategy

These steps will help you position your business effectively while staying true to your mission.

1. Assessing the market landscape

To understand the size of your potential market, use the TAM, SAM, SOM model:

• TAM (Total Addressable Market) – The largest possible market for your product (e.g. the global furniture market).
• SAM (Serviceable Available Market) – The portion of TAM that you can realistically serve (e.g. the furniture market in Kenya).
• SOM (Serviceable Obtainable Market) – The percentage of SAM your business expects to capture (e.g. high-end, traditional furniture in Lamu, Nairobi, and Mombasa).

This method helps set realistic goals and investment priorities.

2. Customer profiles

Customer profiles (personas) represent your ideal buyers. Creating these helps design better products and marketing strategies.

Personas are built using surveys, interviews, and market research, considering:

• Age and profession
• Buying habits and interests
• Motivations for purchasing sustainable products

For example, “Eco-conscious Emily” could be a young professional looking for sustainable, high-quality products.

3. Value proposition and unique selling point (USP)

• Value proposition – What problem does your product solve?
• USP – What makes it better or different from competitors?

Example:

• Value proposition: “High-quality furniture that protects nature.”
• USP: “Made from 100% locally sourced recycled plastic.”

Clear messaging helps attract customers and stand out in the market.

4. SWOT analysis

A SWOT analysis helps identify internal and external factors affecting your business:

• Strengths – What you do well (e.g. skilled team, unique products).
• Weaknesses – Areas for improvement (e.g. limited equipment).
• Opportunities – Market trends that can help (e.g. rising demand for sustainable products).
• Threats – External risks (e.g. competition, government regulations).

Understanding these factors helps you make better decisions.

5. PESTLE analysis

A PESTLE analysis examines external factors that impact your business:

• Political – Government policies and regulations (e.g. plastic bans).
• Economic – Market conditions (e.g. cost of recycled plastic vs. new plastic).
• Social – Consumer trends (e.g. growing demand for eco-friendly products).
• Technological – New innovations (e.g. better recycling techniques).
• Legal – Compliance requirements (e.g. tax laws, licensing).
• Environmental – Potential challenges (e.g. pollution risks).

By evaluating these areas, you can adjust your strategy to manage risks and opportunities.

6. Stakeholder analysis

A stakeholder analysis identifies people and groups that affect or are affected by your business, such as:

• Local government and tax offices – May require licensing and records.
• Plastic collectors – Supply raw materials.
• Environmental organisations – Could support or promote your work.
• Customers – Drive demand for your products.

Understanding stakeholder interest and influence helps you focus on those most critical to your success.

7. Competitor analysis

A competitor analysis helps you understand your competition and find ways to stand out.

Consider:

• What products and services do competitors offer?
• How do they price and market their products?
• Where do they excel or struggle?

For example, if competitors sell low-quality recycled plastic products, your opportunity might be to offer higher-quality, durable alternatives.

8. Feasibility analysis

A feasibility analysis determines if your business idea is practical and financially sustainable. It includes:

• Market feasibility – Is there enough demand for your product?
• Technical feasibility – Do you have the skills and equipment needed?
• Financial feasibility – Can the business cover costs and grow profitably?

This step saves time and money by testing whether your idea is realistic before you invest too much into it.

By following these 8 steps, you can validate your business idea, reduce risks, and set a strong foundation for success.