How to Validate Your Business Idea on Craiglist

Making money on Craigslist. Yes it does take hustle, but as I tell folks here on my blog, it ONLY takes two other things to be in business:

Learn to use Craigslist to test market your business idea. Build a buyer's list using Craigslist!

Learn to use Craigslist to test market your business idea. Build a buyer’s list using Craigslist!

1) access to a thing (or thingS) of value and
2) a way to communicate to people that value that thing.

And Craigslist can provide you with both.

Genius..!

Now after having a single TRANSACTION… you find out how to lather, rinse repeat… and now you have a bona fide business.

Selling a Product on Craigslist

My teenage son really appreciates paintball.

Recently, he was able to pick up a screamin’ deal on a paintball gun on eBay.

But then a friend offered to buy it from him for more than we he had in it and an idea struck me.

“Son, list that gun for sale on Craigslist.”

“DAAAaaaad… I can’t. I promised it to my friend Christian.”

Use Craigslist to See if Your Business Idea is a Winner

Use Craigslist to See if Your Business Idea is a Winner

Sigh. Explaining the deep intricacies of small business validation to a teen seems like a daunting task. But since you’re a follower of my blog (RIGHT? 😉 ) I’ll spell it out for you.

I didn’t want Pierce to actually SELL his gun to a stranger. I just wanted him to LIST it for sale.

Why? Well, to see if there was a potential there for a small business! They call it “validation” when you actually make a sale or two at a profit. After validating a business idea with a few transactions, you can then make the steps you took to make those few sales into a system. Then you have a business.

Now back to the paintball gun. Pierce didn’t want me to sell it out from under his friend. But that was never the plan; I simply wanted him to list it. Then when the calls came in… if indeed they did… he could very honestly say, “Sorry but that gun is sold. But I know where to get more like it for cheap. WHAT KINDS OF PAINTBALL GUNS DO YOU LIKE? WOULD YOU LIKE FOR ME TO KEEP YOU IN MIND WHEN I SEE ONE OF THOSE?”

Heh-heh. Sorry to yell at you. I just wanted to make sure you saw those two key sentences.

I learned this trick while working a real estate investor that was a GENIUS at marketing. Richard would intentionally allow a newspaper ad for a home to go on for two or three weeks AFTER he sold it. In Colorado Springs, that’s saying something because the local paper gets confiscatory prices for little-bitty ads. One day I asked him about all the money he was “wasting” not only on ads, but on me, his telephone assistant to field all the calls that were coming in on a home that was already sold.

“I’m not wasting money Kurt,” he said. “I’m doing market research.”

Then I remembered my phone script: “No, I’m sorry that home is sold. What kind of home are you looking for? What area of town?”

Richard didn’t want me gathering that information just to sell another home in his inventory as I had previously thought. He wanted to know so that’s where he would focus his future buying efforts.

Last I looked, Richard had a database of literally hundreds of people looking for a specific kind of home. Then he would put out his feelers for and find that kind of home, BUY it, and THEN he would have me start making calls.

Okay, side trip into real estate. Now back to Craigslist.

Whatever you are selling… paintball guns, cars, washer/dryers… Step One is to place an ad. Even if you don’t really have something for sale (yet)!

Step TWO is to take calls and gather as much information from your prospective buyers as they are comfortable divulging.

“Thanks for calling about my widget for sale. DO you have other widgets? Do you collect them? Should I call you if I get another widget at a comparable price? What kind of widgets do you like?”

You get the idea.

A Marketer’s Most Valuable Asset

 Hey, if you’re not careful… by following the steps above  you might end up pulling together a buyer’s list… one of the most valuable

A Buyer's List is YOUR Key to Lasting Business Success.

A Buyer’s List is YOUR Key to Lasting Business Success.

assets you can possibly have as a marketer.

So many folks go about marketing the wrong way: first they make a product, or buy one… WASTING capital by acquiring unnecessary inventory and incurring expenses for storage… and THEN they go about trying to sell it.

That’s bass-ackwards! Getting all the trappings of a small business (business cards, a website, logo) is just “playing business”. Making sales is what business is all about.  So it makes sense to make the sales first, then fill in all the blanks later.

It may seem a bit surreal to make sales when you don’t even have something to sell. But as I’ve said here before, Just Because You don’t Own Something Doesn’t Mean You Can’t Sell It.

The best way to find an opportunity is to hang up a shingle… which you can do for FREE by the way on Craigslist… and see what comes back.

Keep a record of everyone that calls you, and for what. See if you can find a few products in great demand that you may also find cheaply.

Selling a Service on Craigslist

Here’s a podcast by a fella that figured this out; he discovered a Craigslist arbitrage niche. Literally overnight he established a business that pays him full-time profits. By buying used washers and dryers for cheap and selling them for a bit more, LaJuan Stoxstill-Diggs helped folks on BOTH sides of the equation.

The sellers might be moving, or getting a newer piece of equipment, and are faced with the problem of how to get rid of their appliance.

The buyers might be a new couple starting out, or a college student needing an affordable alternative to a brand new washer/dryer.

Along comes LaJuan and solves BOTH of their problems… and pocketing a nice profit.

Folks have even offered HIM money on the acquisition side… “How much do you charge to haul this dryer away?”

NICE.

Check out LaJuan’s story on my twitter pal George Meszaros’ site! This podcast is just an illustration of how ridiculously easy it is to put together a small business without any starting capital:

http://www.successharbor.com/how-to-hustle-and-turn-craigslist-into-a-business-with-lajuan-stoxstill-diggs

The Shoestring Steps, 2) Find out the W’s and 5) Now Write Everything Down are hard at work here.

 Validation: The Key to Establishing Your Small Business

Before I ever heard this technique called, “validation”, I was using it to test markets… before putting all my eggs into a basket with holes in it.

For example, waaaay before Craigslist I used The Thrifty Nickel, a newspaper filled with nothing but classified ads. The Thrifty Nickel made piles of money for me as a 19-year old… but more importantly it SAVED me money when I used it to determine if an idea was NOT in great demand. My lawn aeration biz was a screamin’ item; my apartment referral service and gift bag delivery ideas not so much.

“Validation” simply means this: BEFORE overcommitting to all the bells and whistles and trappings that normally go with running a business, try and make a few sales.  Duh. If people call to inquire, or better yet place an order, you’ve got a winner.

Sidgl Custom Computer Bags by Ben Trissel... check Facebook and now Etsy

Sidgl Custom Computer Bags by Ben Trissel… check Facebook and now Etsy

Social media is wonderful for this; a childhood friend of mine recently set up a facebook fan page on my advice to sell his custom handmade computer bags. He’s off to the races having orders come in faster than he can fill them.

But get this: before he read my book he HAD been saying, “I need to maybe get a loan… or use my savings… to buy a bunch of leather and get a machine and make a whole buncha bags…”

WHOA! Hold up there, Ben. Here’s an important question to settle first: Do your bags suck? Will anyone actually fork over enough money to buy them… and (this is kinda important) at a profit?”

Look, as a prospective small business owner you WILL have problems. Which problem would you rather have:

  1. Sitting on a huge pile of “frozen money”… inventory that you can’t even seem to give away, or
  2. Sitting on a huge pile of orders… being barely (or just NOT) able to keep up with all the orders coming in?

Sign me up for door #2, please 😉

Beyond Craigslist: Other Social Media Selling

Craigslist's Tips against getting scammed- We get it, C-list. Go local or go home.

Craigslist’s Tips against getting scammed- We get it, C-list. Go local or go home.

Craigslist is good for validating and selling both products and services. The problem with it is that most folks trust local sellers, and with good reason. In their safety guide, Craigslist warns users off of buying stuff that’s not from your own ‘hood.

But there are other ways to test your biz opp for free.

Getting the word out by way of Twitter and Facebook makes sense, especially for services and information products.

You could use Etsy or eBay for physical products.

Same goes for Fiverr for services.

When you use social media to test your business idea, it makes sense to go to the ones where you already have a network. But don’t stop there. In my recent post, Validate Your Business Idea with the 3 Most Overlooked Social Media Sites I pointed out that not all social media is advertiser-unfriendly. In fact, visitors to Fiverr, eBay, and Amazon expect to be marketed to and they’re often in the mood to buy! If you don’t think of these sites as social media, check out that post and see if you agree.

Action Steps for Validating Your Business Idea

If you intend to offer your goods or services locally, Craigslist is a good start. But don’t overlook Yext, Yelp, Google+ Local, Thumbtack, and the plethora of other free and fee-based local directory ads. If your product or service is info-product, service-oriented and global in nature, try Fiverr and Amazon. But don’t overlook using LeadPages and Facebook to target customers to a squeeze page.

Here’s how to go about validating your business idea:
(translation.. here’s how you can know if you have a WINNER!)…

  1. Solve your OWN problem first.
  2. Write a short description of your solution that’s about your customer, not you.
  3. Post that baby on anything that sits still, with a way to get in contact with you.
  4. Ask every question you can think of your prospective buyers
  5. Maybe sell ’em something! See IF and WHAT people will actually pay for your solution.
  6. Do some math. See if you can get your product at a lower price, or deliver it with less time commitment.
  7. Lather, rinse, repeat. Sell one used exercise bike on Craigslist, that’s a business transaction. But set up a system to find multiple buyers and deliver multiple exercise bikes (Craigslist or no), and that’s a real live business.

I’ll go over all seven of these steps in future posts… or maybe an information product (wink, wink) in the near future. But for starters let’s look at step ONE: Solve your OWN problem first.

Free Traffic Generation Strategies

Ana Hoffman’s Traffic Generation Cafe: Tips and Tricks equal HUGE amounts of traffic to your website!

My friend Ana Hoffman founded the extremely popular site, Traffic Generation Cafe by solving her own problem: she had another website that needed traffic. What she found out… and continued finding out… about how to generate free web traffic to a blog became the basis for a blog as well!

Ana’s tips and tricks for generating free traffic have led to her site having an estimated value of over a million dollars in about four years. I personally happen to think that’s undervaluing the help she has made available to bloggers and content marketers, but hey.

Check her out for yourself.

My point is this: validation is important before you invest four years of your life into something. Ana knew she had a winner early on… or she would be blogging about something else.

So validate your OWN business idea before you go getting fancy.

Okay, Steppers! Do me a favor: if you do go ahead and try using that seven-step system above to validate your business idea of Craigslist, or other free sites… and you get some valuable market intelligence that helps you make some real ca$h… rather than sending me half of your profits 😉 just leave me a comment below. Thanks!

Keep Stepping,

Kurt

Comments

  1. Thanks for ones marvelous posting! I seriously enjoyed reading it, you might be a great author.I will ensure that I bookmark your blog and will come back in the foreseeable future. I want to encourage you to ultimately continue your great writing, have a nice morning!

  2. When selling our services on Craigslist, we realized we were lost on the page and getting few leads. The new rules — 1 ad per category per 48 hrs per acct — made our ad invisible to hundreds of others. We started using CL AutoPilot about 7 months ago and have seen a dramatic increase in conversions. We run about 6 ads/day (through 3 accounts) that are loaded in Autopilot, so our ad stays at or near the top of the page throughout the day.

  3. Your friend’s real estate advertisements are dangerously close to bait-and-switch. The FTC doesn’t look kindly on those kind of tactics.

    • Kurt Frankenberg
      Twitter:
      says:

      Bait and switch? Not so. Richard was in the business of selling certain types of homes to certain types of customers. He never lied and he never advised me too. He only allowed a listing to run in the local newspaper for its full, discounted run (X amount for 4 weeks, for example) instead of taking it down the moment it sold or was rented. The phone calls we received afterwards often turned into other sales… in other words, folks that responded to the ad in the first place because they were looking for a particular kind of home in a particular price range in a particular part of town got their needs met! Not bait and switch all, but rather getting the most mileage out of one’s advertising and genuinely trying to serve one’s customers.

      Keep Stepping,

      Kurt

      • Jesse says:

        I misunderstood the article as stating that the ad was placed after it had sold, not that it was posted normally, but not ended early.

  4. I’ve never really tried incorporating Craigslist with my business ideas, but somehow this opened my eyes for further options and more means to maximize the internet for making my business ventures.

    • kurtf
      Twitter:
      says:

      Right on Nora!

      I don’t personally sell a huge amount of goods on Craigslist but I have used it to validate a number of business ideas. I used Craigslist to advertise my screen repair biz for example, and made about a thousand dollars worth of sales there. But the main thing it did for me was to let me know that screen repair in Colorado Springs was a viable business… NOW I use some hacks to get “Google Juice” and get calls OTHER ways for free.

      Craigslist is a great way to see if your product or service will actually sell, particularly in a local area.

      Keep Stepping,

      Kurt
      kurtf recently posted…Use Fiverr to Validate Your Small Business IdeaMy Profile

  5. terryzurcher says:

    man im learning a lot from you and ana …….. thanks kurt for shareing ur imformatiom for free it help people like me get it

  6. Hi, Kurt! So here’s a question for you: what do you do if you validate a service is in demand, say using Fiverr, then have trouble selling that service for more than 5 bucks anywhere else because people know that they can go to Fiverr for that service??? I’m facing that dilemma right now–happy to have a well-validated, in-demand service on Fiverr, but it’s a service that demands more time and attention than five bucks gives credit to. I could deliver a fast, crappy product to my buyers, but that’s not how I want to do business. To do it right takes at least 30-60 minutes, and at 4 bucks of income after Fiverr’s cut, that’s obviously not sustainable.

    I have tried selling this service (which is more realistically worth anywhere from $75-500 depending on complexity) through my own website with no luck.

    Any thoughts for those of us in this situation, facing a wealth of competition with a pricing race straight to the bottom? Thanks!

    • kurtf
      Twitter:
      says:

      GREEEAAAAAT question, Jennifer! I’ll give you four words of encouragement about Fiverr itself, then answer the second part of your Q.

      First off, let me encourage you by saying that you ALWAYS want to provide more and better service than you are being paid for. The universe is set up in such a way as to guarantee that you WILL be compensated. Do those $5 jobs like they are $500 jobs and soon the $500 jobs will come a-knockin’. 😉

      Secondly, Fiverr is not a place where I do my REAL selling; it’s where I validate businesses by seeing if somebody, ANYbody will pay SOMEthing for my service or product. I’ve disqualified a number of business ideas by hanging out a shingle on Fiverr, eBay, or Craigslist and seeing no one bite… then in some cases found out the perfect combination of words to use product/services to sell, sell, sell.. and it’s been a grand experiment making money while finding out how to make MORE.

      Third, once establshing a rep on Fiverr you may begin to offer “Gig Extras” which bumps up your income to a more respectable level, but…

      FOURTH… and perhaps most important! By getting a respectable portfolio to your name, and hopefully your Fiverr “screen name” makes you easily found by folks that look for you outside of Fiverr… you can get to a place where your body of work and reviews speak for themselves. Post every finished work and review on your website. No one needs to know that these happy consumers paid $5, or $50ish after extras. But set yourself up for glowing reviews and the next step will take care of itself.

      Jennifer, I’m prepared to give you a FREE Side Money Blueprint (normally priced at $101) if you’ll allow me to use your success story as a testament to the SS101 principles. We gotta deal?

      Keep Stepping,

      Kurt
      kurtf recently posted…How to Validate Your Business Idea on CraiglistMy Profile

      • Absolutely, Kurt! I’d love to be at the point where I could be a “success story”! 🙂

        Jennifer

        • kurtf
          Twitter:
          says:

          Okay first thing is I need you to send me a report on EVERY channel through which yo have gotten clients in the past, including referrals from families and friends. Also we need to look for patterns among WHO is using your services now and create a “customer avatar”. THEN we’ll figure out some unique, effective ways to reach more and more of those ladies and fellas. Send me your info at kurt at shoestring101 dot com. We’ll post YOUR success story here in 60 days!

          Keep Stepping,

          Kurt
          kurtf recently posted…How to Validate Your Business Idea on CraiglistMy Profile

  7. You know how much I love your idea of testing before committing, Kurt.

    For those of you reading this post, Kurt hasn’t mentioned that he’s encouraging me to make a traffic generation course, but BEFORE actually making it, test it with my readership to see what kind of information is actually in demand.

    Just because I think my readers want to know something, doesn’t mean it’s actually the case.

    Test before you invest!

    Thanks for teaching me this valuable lesson, Kurt.

    • kurtf
      Twitter:
      says:

      Ana, I plan to be your first customer for that course. I always say that it only takes two things to be in business: 1) access to a thing of value and 2) a way to get your message out to folks that value that thing! YOU have certainly cracked the code when it comes to the second part; the readership on your blog was enormous when I first “met” you by way of Kristi Hines’ introduction… but since then it has increased even more!

      I believe this is because you’ve mastered Shoestring Step THREE: Learn To Create Value. Traffic Generation Cafe is filled with timeless principles, but always has the most up-to-date ways to implement those principles. Since I’ve more than doubled my traffic using only some of your tips so far (gotta get on it and do more of them!), you can bet I’ll be first in line when your traffic generation course is ready for the public!

      Keep Stepping,
      Kurt
      kurtf recently posted…How to Validate Your Business Idea on CraiglistMy Profile

  8. I agree with you that Craigslist is a great way to test and to start a business. When you build your business on a marketplace you don’t have to worry about getting eyeballs on your ideas. The challenge becomes differentiation.
    George Meszaros recently posted…How Many Times Can You Fail Before You Kill Your BusinessMy Profile

    • kurtf
      Twitter:
      says:

      Right you are George! That’s why it’s so essential to learn “customer-speak”; good copywriting and sales savvy sets you apart. Here’s a “differentiation” story for ya: once I saw an info product on eBay…

      It was a course for marketing single family homes in a unique, turnkey kind of way and was suited to real estate investors. I had actually used the course and had stellar results; I sold thirteen homes in five months with no prior training in real estate or even a license.

      So this was a great product, being offered at a great price on eBay. Thing is, their COPY and their marketing sucked rocks.

      So get this: I took their image, some of their description, and added my own testimonial and good sales copy. Also I offered the course for sale in a different category.

      By the time the smoke cleared, I SOLD the real estate course for $420 and bought it at $240. The course arrived at my house, I changed the shipping labels, mailed it to the next fella, and presto. $180 profit for less than an hour’s work, plus a great story to tell about the value of writing good ad copy 😉

      Thanks for visiting, George! Love your blog and what it stands for.

      Keep Stepping,
      Kurt
      kurtf recently posted…How to Validate Your Business Idea on CraiglistMy Profile

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  1. […] How to Validate Your Business Idea on Craiglist – Kurt Frankenberg at shoestring101.com […]

  2. […] Frankenberg at Shoestring 101 has a couple of posts about validating your business idea on Craigslist, on Fiverr, and on the three most overlooked social sites that are right to the […]

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