#3. From Employee to Entrepreneur: Validate The Idea
- Terrand Smith
- Feb 26
- 6 min read
Updated: Apr 10
Is Your Hobby Ready To Become a Full-Time Business?
The Excitement Is Real—But So Is the Risk
When you’re finally ready to make the leap from employee to entrepreneur, one of the first things that might come to mind is: “I have an idea!” Maybe it’s something you’ve been doing on the side for years, like baking, designing, consulting, or crafting. Or maybe it’s an idea that hit you in the middle of a frustrating moment at your 9-to-5—something you know you could do better if you just had the chance.
Either way, that excitement is real. You’re finally looking at what could be yours. A business that’s built on your passion, your talents, your vision.
But here’s what I’ve learned over my 13 years of being an entrepreneur and coaching and teaching thousands on a similar journey: Just because you love doing something or are even good at it, it doesn’t automatically mean it’s a viable business. And this part? This is where a lot of entrepreneurs get stuck.
Don’t Just Follow the Passion—Validate the Potential
I’m a huge advocate for building businesses that align with your passions. Passion is fuel. It’s what keeps you going when the road gets hard (and it will). But building a business solely on passion—without checking the market—is like driving full-speed with no map.
In Prepare to Shift, the workbook I authored in 2022, I talk a lot about a proven roadmap and process of successfully shifting from a hobbyist to a successful business owner. One of the biggest distinctions? Business owners ask, “Is there a market for what I offer?” Hobbyists often don’t. Before you make the leap, this blog will outline a few tips and exercises to help evaluate if your idea has real market potential—or if it needs a few tweaks to truly thrive.
1. Financial Viability: Can This Idea Actually Make Money?
You may love your hobby or idea, but if you're planning to turn it into a business, the numbers have to work. This is not an option. Financial viability means asking:
✔️ What are people currently paying for similar products or services?
✔️ How much does it cost you to produce or deliver your offer?
✔️ Can your pricing generate a healthy profit after expenses?
This isn’t about having a perfect forecast. It’s about understanding whether there is a business model that can sustain and eventually scale your idea.
💭 Stop thinking, “If I love doing it, people will automatically pay for it.”
💭 Start thinking, “There’s value in this—but I need to make the numbers make sense.”
The Challenge
Before you move on, take a moment to sit with this shift. This is foundational for sustainable entrepreneurship. Now let’s put it to the test with a challenge that will help you assess if your idea can go the distance.
Do a basic profit analysis. Write out your potential costs—materials, time, marketing, packaging, shipping, and overhead. Then research what people are willing to pay. If the math doesn’t work out right now, don’t quit—adjust your model or pricing until it does.
Business Model Mapping. Map out a 6-month version of a sustainable business model. Identify potential revenue streams, estimate monthly income goals, and note what you'd need to sustain yourself financially. This will give you a clearer view of whether this business can grow with you—or just drain you. The Business Model Canvass is a great resource to use to get started.
2. Market Demand: Is There an Audience for This?
You may believe in your idea, but the question is—does your audience?
✔️ Who are you solving a problem for?
✔️ Are they already paying for something similar?
✔️ Do they understand the value you bring?
If people aren’t looking for what you’re offering, it doesn’t mean your idea is bad—it means your positioning or messaging may need a tweak.
💭 Stop thinking, “Because I believe in it, others will too.”
💭 Start thinking, “Let me understand what my audience actually needs and values.”
Belief is powerful, but alignment with audience needs is what drives results. Now let’s put this into action with a challenge that helps you validate demand before you commit further.
The Challenge
Talk to 5–10 potential customers. Ask what they struggle with, what they’re already using or buying, and what they wish existed. This is simple market research that can shape your offer to better meet real needs.
Then take it a step further: Create a one-paragraph pitch of your idea based on what you learn. Share it with those same people and ask for feedback. Does it resonate? Is anything unclear? Are they excited by it? This quick validation loop helps refine your concept in real-time—before you invest too much time or money.
3. Competitive Viability: Can You Stand Out in the Market?
Every business has competition. And that’s a good thing—it means there’s demand. But it also means you need to clearly define your edge.
✔️ Who else is doing what you want to do?
✔️ How are they packaging, pricing, and marketing their offer?
✔️ What will make your version different, better, or more relevant?
It doesn’t have to be revolutionary—but it has to be clear.
💭 Stop thinking, “The market is too saturated—I missed my chance.”
💭 Start thinking, “Here’s how I can offer something unique or better for my audience.”
Now that you've clarified how you can stand out, it's time to take the next step: test that uniqueness against what already exists in your market. Let’s put it into action with a focused challenge.
The Challenge
Identify three competitors in your space. Study their strengths, gaps, pricing, and messaging. What are they doing well, and where are they falling short? Then write a simple statement that defines how your business is unique—and why your audience should choose you.
Analyze your competitors' business models. Are they product- or service-based? Subscription or one-time purchase? What platforms do they use to sell and market? Use these insights to refine your own model and ensure it’s both competitive and sustainable. This exercise will help you spot opportunities and build a stronger foundation for your business.
Don’t Just Dream It—Validate It
Before you leave your steady paycheck behind, it’s essential to know if your business idea can actually work in the real world. Ignoring this step can lead to wasted time, money, and energy—and the risk of turning a passion into a pressure-filled obligation.
If you skip this stage, you may end up building something that you love… but no one’s willing to pay for. That’s a hard reality that many entrepreneurs face when they don't take time to validate their idea.
So take this step seriously. Give your idea the honest attention it deserves. Is it financially viable? Is there real market demand? Can you stand out from the competition?
If you’re ready to take this step even deeper, Prepare to Shift: The Workbook is filled with actionable exercises to help you validate and refine your idea so you can make smarter, more confident decisions.
Stay tuned for Blog #4 which will dive deeper into more tips, insights, and exercises to guide your journey from employee to entrepreneur.
Prepare To Shift: The Workbook
A few years ago, I wrote Prepare to Shift: The Workbook—a quick guide to turning your hobby or side hustle into a growing business. This workbook is built around 14 key principles: 7 MindSHIFT and 7 WorkSHIFT.
🔹 MindSHIFT focuses on the ways you need to think differently to transition into business growth.
🔹 WorkSHIFT highlights the actions you need to take to build a profitable and scalable business.
Each principle has an exercise to help you apply these shifts in real-time. Since this workbook is designed to help entrepreneurs move from stuck to scaling, you’ll see a few references to it throughout this blog series as it overlaps with key principles one needs to know before propelling a business into growth mode. It’s a quick but powerful read, so if you haven’t grabbed a copy yet, I highly recommend checking it out.
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