Coming up with a business idea is an exciting time.

You feel a surge of motivation to start taking action and to materialize your ideas into a profitable startup.

It’s certainly a great feeling to have.

But how do you know that your idea will in fact be profitable?

You surely don’t want to invest 6 months of your time and energy creating a product only to realize that the idea isn’t going to work. You also don’t want to lose your money in the pursuit of something that was deemed to fail from the start.

That’s why you have to validate your business idea first.

Let’s look at a general and usable framework that you can rely on to validate your business ideas.

1. Hypotheses

A hypothesis is basically a set of assumptions you have about your business. This includes the customer archetype that your product or service is going to appeal to, the speed at which your business will grow, the marketing strategy that you believe is most effective, the product features that are going to solve the customer’s problems, and the pricing system that is going to work best for the business.

These are all, simply, just guesses.

You don’t in fact know if that’s what is going to happen to the business. You don’t in fact know if your customers would respond favorably to your ideas. You’re simply assuming they will. You believe they will.

So you’re pretty much starting with faith that your belief system about the business is going to match up with the needs of your customers. You also believe that the process is going to be replicable and sustainable.

But these are your beliefs (and your partner’s beliefs), but they’re not facts.

So let’s go get some facts before we make any foolish mistakes.

2. Alpha Test and Beta Test

The first step to validating your ideas is to receive feedback on your product and service.

Big and small Companies begin their testing procedure on their internal employees (and family and friends sometimes). They ask their employees to test their product or service and to give them feedback about the usability of the product, features of the product they liked, the features they didn’t like, and so on. The product at this stage, however, is only in its elementary stage. It’s not a finished product yet. And the reason for this early testing procedure is to predict the performance of the product. And alpha tests allow companies to do so for a minimal cost.

Once the company collects this data, they usually iterate or upgrade (or downgrade) the product in accordance with the early feedback they received, and test it again until the product is more in line with the feedback. They then put it to the second test; that is the Beta Test.

A Beta test is a test performed in the “real-world” on actual end-users. The company provides end-users with the product or service free charge and it asks them for feedback. They use the product and report to the company their experience of it from the features of the product, customer service, usability, etc. This test helps the company determine whether or not the product features that they prioritized has the potential to sell and what features do they need to further iterate in order to increase its sales potential.

Once the company has conducted those two tests, they can now take the calculated risk of pouring more money into the business and investing more energy into manufacturing the product on larger scale and distributing it.

This process works for everyone from small startups to large corporations. It’s certainly an excellent place to start for validating your ideas.

3. Get Out of the Building

Steve Blank, a serial entrepreneur and a Business Professor at Stanford University, advises founders (and pretty much everyone on the business team) to get out of the building and speak with potential customers.

But how do you find potential customers?

Well, you look for them and you offer them freebies.

So begin by getting the word out about your product or service. Invest your time in marketing your ideas on social media and see if it resonates with people. You can buy ads on facebook or other social media platforms and even on the radio and get as many people as possible to become aware of your product. You will get better results if you first offer them something of value before you ask them to try your product and use it.

In addition to your online presence, you have to hit the streets.

If you’re selling a product, then you have to do a lot of leg work. So pick a corner and stand there and start giving away free samples. You can also ask other business if they would like to offer your product to their customers.

At this stage you have to speak with as many people as possible to determine if potential customers share your belief-system.

4. Financial Investment

In the early stages of your product development, you must be very conservative with your cash and your credit.

There’s no guarantee that your business is going to work out, and you might end up losing all of your money. That’s a fact.

So it would be helpful for you to start with the assumption that you’re possibly wrong about the potential success of the business.

In more concrete terms, it’s recommended that you start with the assumption that your business has a %70 chance of failure. And what I mean by that is this: approach your business with an open mind and be prepared to iterate your approach and to modify your beliefs about the product. In fact, you need to be flexible until you find a business model that works. That part is going to take you some experimentation and quite a bit of trial and error, but it’s important to test your ideas before taking the dive.

But once you find what works, you have to become almost ideological about replicating the process. And replicating what works is going to help you scale up and continue growing.