If you decide to develop a prototype follow these steps.  Going through thesse stages will significantly increase your chances of developing a good prototype that is ready for production.

Stage #1:

Defining initial problem & solution:  Identify the problem you’re trying to solve in detail.

Stage #2:

Planning the prototype development:   Identify the skill sets, raw materials, facilities, etc. that you will need to develop the prototype.

Stage #3:

Build the prototype:  build more than one model if you want to speed up the testing process.

Stage #4:

Test and evaluate the prototype:  perform testing and evaluation on the model to ensure that it satisfy the requirements.  You can perform an internal (Alpha) test and/or an external (Beta) test.  Internal testing is done with you and your employees to identify and remove any defects.  For some products minor defects can't be adequately identified until you get user interaction.  That's where external (Beta) testing come in.  External testing is done with a release to selected customers for testing under normal, everyday conditions so that flaws can be identifed.  Many software developers use Beta testing before fully launching their product.

Stage #5:

Redefine the problem & solution:  take what you’re learned from testing and evaluating the model and redefine the problem if necessary.