Usability testing generally occurs at the prototype stage, but can be extremely helpful any time design changes are in order. The basic concept of usability testing is very straightforward: how much difficulty do users have using a product?
A usability test consists of a list of tasks which test subjects must perform with the product. A usability test for a vacuum cleaner, for example, may consist of the assigned tasks "turn the vacuum cleaner on," "replace the bag," and "adjust the height level." Users are given the task list, the product, and whatever documentation may go with it, and they're turned loose to do their thing. That's all there is to it — even expensive and elaborate usability testing procedures are based on this foundation.
As users go through the tasks, keep careful notes as to which require use of the documentation, which prompt questions, and which are easy for the tester to manage. It is also helpful to have the testers fill out a questionnaire about their experience with the product at the conclusion of the test. This can shed light on their thought processes and reveal additional very useful information.
This kind of "directed test drive" often turns up unexpected and unforeseen hiccups in a product design and can save an enormous amount of lost revenue.
According to usabilityprofessionals.org, "The rule of thumb in many usability-aware organizations is that the cost-benefit ratio for usability is $1:$10-$100. Once a system is in development, correcting a problem costs 10 times as much as fixing the same problem in design. If the system has been released, it costs 100 times as much relative to fixing in design."
Add to this the tremendous success many companies have experienced with products and services developed for usability, in both sales and reputation, and it is easy to understand how usability can confer such a high level of competitive advantage for nearly any entrepreneurial project, no matter how large or small.
For more information about the business case for usability, please see the Commercial Advantages page at usabilitynet.org. To get started with usability, visit the Basics of Usability page, also at usabilitynet.org. For a more in depth treatment of the subject, you can't go wrong with The Design of Everyday Things by Donald Norman and Usability Engineering by Jakob Nielsen.