Test, Test and Test your idea to learn if it is good enough to become a business. Here is where the rubber meets the road. Testing should cost next to nothing and has to continue for a limited period time.
Based on your research you know who is the customer and what is the product. At this point the product has to be physically available for sale. The next step is to find out how big is the demand. There is always a difference between promises, expectations and real sales.
Allow a limited time period to test sell your product and idea
Three to six months of selling and promoting your product will offer you an inside knowledge if there is a future for it or not. After the limited time test analyze the results. For example if your clients are only friends and relatives, it may not be a good idea to proceed. It is very helpful if you set targets for weekly and monthly sales volume. If there are considerable sales that allow you to make a profit you have a viable idea. Proceed and make it a business. If not, abandon this idea and look for a new one.
Have a limited budget for the test
There must be a limit to how much you are willing to spend and not a penny more. For example, if the budget is $10,000 and the money runs out in a couple of months the project has to be canceled. If not it becomes a black hole for money with no end in sight. Miracle will not happen!
Keep all expenses to a minimum
At the test stage major expense like rent, labor, recurring spending has to be under strict control. Avoid renting an office or commercial space. Work from home, your garage, coffee shops etc. Make an effort to do all the work yourself or enlist free help from family and friends. Be extremely careful about recurring expenses such as weekly, monthly or quarterly fees for services. Public libraries and the Internet offer many information resources free of charge.
During the test stage you still do no know if your product will sale to a wider market. Business registration, legal form or licenses and fees could wait. You should worry only if you deal with hazardous materials or something that endangers people. At this point you still do not a have business. It is only a test! Once, you find out that you have a viable product you are in business. Then you have to fulfill all government requirements to become a legitimate business.
It is important to make a profit
To this point all expenses have to be been kept to a minimum. If the test is successful and the idea becomes a business you will need to spend more in order to grow. That is why the business has produce enough profit to help finance the expansion. If you cannot generate enough profit during the test stage you have to abandon the idea explore new products or services. Starting a business is emotional undertaking. Often we want to believe that things will become better when they are not. Hoping for a miracle is never a part of normal business activities.