How to Come Up With a Business IdeaNov 30, 2022
How would you describe your ideal job? What kind of lifestyle would you want to live? How much time would you spend at home or traveling? Would you prefer working from home or in an office?
You might already have some ideas about what you'd love to do with your life, but maybe they aren't fully formed. Maybe you've got a vague sense of where you'd like to go, but you don't really know how to get there. Or perhaps you've thought about starting your own business, but you're unsure whether you'll ever be able to quit your day job.
A career change isn't always necessary to start a new chapter in your life. Sometimes, it's enough to simply take a step back and ask yourself what you enjoy doing. If you're feeling stuck, try asking yourself these questions to help you figure out what you should be doing next.
How to Come Up With a Business Idea
It's tough to come up with a good business idea. There are so many different types of businesses out there, and each type requires a unique set of skills. So, how does someone who wants to create a successful business decide what kind of business to pursue?
There are several factors that influence whether or not a person decides to open a brick-and-mortar store or sell products online. Some of the biggest ones include location, competition, and customer demand. But, there are other factors that aren't always considered. One of these is creativity.
Creativity plays a huge role in determining whether or not a person chooses to run a physical shop or sell products online. Many entrepreneurs choose to start their own business because they love creating something new and innovative. Others choose to start a business because they enjoy working independently and don't necessarily care about having a boss. Regardless of the reason, creative thinking is key to coming up with a good business plan.
Look Inward for a Business Idea
Business ideas aren't always easy to come by. Sometimes, they just pop into our heads while we're doing other things. Other times, we might brainstorm ideas over coffee or lunch with friends. Either way, it's important to look inward for inspiration rather than outward.
It's easy to get caught up in the day-to-day activities of running a business, but taking time to reflect on what you love and enjoy can lead to creative solutions. When you're thinking about your own interests, hobbies, passions, and skills, you're able to tap into a wealth of potential ideas.
For example, if you love cooking, then maybe you could create a recipe app. Or if you love photography, you could develop a photo editing service. Whatever your passion, there's probably a market for it somewhere online.
Analyze Your Own Problems
Solving your own problems is a great way to build a successful business. Not only does it save money, but it gives you a chance to learn firsthand about your customers’ needs and wants. Plus, when you solve your own problems, you’ll likely develop skills that can be applied to other areas of your life.
Do something about what bugs you
What bothers you in your daily life? Think about what you complain to your friends and family about. Are you unhappy with a current product you regularly use? Could you make it better? Remember when it comes to idea creation don't try to evaluate if you think it's possible or not. Once you've accumulated a list of ideas you can then evaluate which one has the greatest potential of being viable. A simple idea can be the foundation for a business, just putting something down on a piece of paper... or napkin is the first step.
Solve a problem
In order for a complete stranger to purchase your product or service, they have to see how you're providing them value. You've got to be solving a problem they are either currently solving themselves but they aren't satisfied with how they are doing things, or they aren't able to address the problem.
Problems can be big or small. They can be related to finances, health, relationships, etc. The point is that you need to find a solution to a problem that someone else faces. If you can do this, you'll have an easier time selling your product or service to others.
An original idea will help you stand out from the crowd. Think about what you already know. If you already have some experience in an area where you want to start a business, consider using that knowledge as a starting point. For instance, if you know how to code, then perhaps you should start a web design company. If you're familiar with marketing, then you may want to focus on selling advertising space
Use Your Current Strengths
What are you good at? What makes you unique? What do you know well? These questions will help you identify your strengths as a business owner. It's also helpful to take note of any weaknesses you may have so you can work on improving those areas.
If you're passionate about something, chances are you already have some experience with it. For example, if you love baking, then you probably already bake all the time. This means you have a lot of knowledge about baking and can share that information with others.
If you're good at math, you can start a tutoring company. If you're good at writing, you can write articles for websites like Medium.com. If you're good with computers, you can set up a website where people can pay you to fix their computer issues.
You can even combine several of these ideas together to form a new business. For example, if your hobby is baking, you might want to sell cupcakes. But instead of making just cupcakes, you can offer different flavours such as chocolate chip cookies, brownies, and more.
Look for new niches
Regardless of what type of business you decide to launch, it's always helpful to narrow down the options by choosing a niche market. Niche research allows you to learn more about the market and gain insight into whether or not it's worth pursuing.
For example, let's say you want to start a dog walking business. You could look into researching the local area to see if there's demand for pet care services. Or, you could look into other cities to see if there are similar businesses already operating. Either way, narrowing down your options will give you a clearer idea of where to begin.
Identify Underserved Needs
A key step if you're unsure about a particular niche, is by looking other players and seeing an unmet need. Here's an example. Let's look at someone that has a passion for baking; if they look in their nearby area and there are multiple bakeries all offering a similar product (custom cakes, cupcakes, brownies and some other pastries) how can they be different? When evaluating, no one is offering custom sugar cookies. This single option could be a key differentiator to help generate business, as it'll be unique to you. Not only can this serve the average mom wanting to get a few cookies for Christmas, to corporate clients wanting 50+ cookies with their company's logo to celebrate an AGM.
It's about trying to think how you can offer something unique to potential customers. There are a wide range of problems being unmet, you just have to pause and see them.
Let go of originality
You don't have to be a super hero or have a degree in business to build a profitable business. More often than not it's not the original company that outlasts the competition.
There's nothing wrong with being unique, but sometimes businesses try to be too different. When you look at successful businesses, you notice that they tend to be very similar to each other.
For example, McDonalds and Burger King both serve burgers and fries. Starbucks serves coffee. Apple sells computers. These companies are successful because they offer products or services that customers love.
So, instead of trying to be different, focus on offering products or services that customers really enjoy. Customers will always choose brands that they feel comfortable with. It's about highlighting the value you're providing customers, and making sure they are getting a good value for their dollar.
Look Toward Others for a Business Idea
If you've exhausted every possible option, then perhaps it's time to turn to others for inspiration. If you're struggling to find a business idea, ask yourself:
What do I like doing?
Do I enjoy working with my hands? Do I enjoy cooking? Do I enjoy helping people? Do I enjoy teaching?
Are there any skills I'm good at?
Can I make money from these skills?
Do I have a skill that would be useful to others?
Can I use this skill to provide a service or sell a product?
How much work does it take to get started?
Is it easy to set up?
Sometimes current industry leaders can be a spark of inspiration. Remember you don't have to be first to market in order to have a shot of success. More often it's the case that it's the 'improver' outlasts the 'first-mover.'
What Can I Improve About This?
It's easy to look at other successful companies and copy their ideas, products, and services. But while copying might seem like a quick fix, it rarely leads to success. Instead, it's much smarter to learn from the mistakes of others and apply those lessons to your own business.
Take a look at your competition and see what they're doing wrong. Then, try to figure out how you could do it differently. Once you've done that, implement the changes into your business plan. Doing so will allow you to avoid repeating the same mistakes over and over again.
One of the areas of innovation that can help set you a part from the big fish companies, is by improving the overall product. Look up the FAQs, customer forums of the big players and see if there are key features that are going unaddressed. There could be an unmet demand for key features.
While this isn't the end all be all, being adaptable and really getting a solid understanding of what the customer wants to best help them solve their problem will help you differentiate.
There could be a niche whereby people aren't able to pay for the products/services of the big players in the industry because it's too expensive. A good example of this is in the B2B space, whereby potential customers (target market) are defined by the size of the company. Take for example a B2B SaaS company that has developed a software that helps corporate businesses manage their HR department. Therefore they sell this to companies that have at least 100+ employees because they are experiencing the pain points the greatest.
Meanwhile the mom and pop shops that can't afford this product still feels the pain of payroll for their part-time staffers. This could be a niche whereby you focus on a part of the market segment that still has pain points, but there isn't a solution that's affordable.
It's important here that being a copycat business and then just pricing your products cheaper isn't a viable business strategy. It's a race to the bottom, and most of the bigger players can simply respond by lowering their price until it's unprofitable and holding out longer than you. They most likely have a greater source of capital and cash flow to outlast you. Therefore it's important to focus on key differentiators that aren't related to cost alone.
Customer experience can really make or break customer retention. If you've been a loyal customer, had a problem and when you reach out to customer support they are rude and unhelpful that could trigger you to start looking for alternatives.
By being a smaller player, every customer counts, you're able to appreciate and provide a positive experience. Business opportunities do not need to rely on brand new ideas, it could be based on improvement in terms of the product and overall experience.
Find a category lacking recent innovations
Looking at the current market, and depending on the industry you find yourself exploring it's quite common to see a fragmented space. A mixture of legacy players, some innovative SMEs focusing on a particular niche, and the small fish just getting into the space.
By analyzing the macro and micro factors of the market can help you define overall market demand, and what segment in particular would be your lowest hanging fruit to act as the initial customer base to start appealing to.
Remember you can recognize a bad idea once you start to think things through, but also look at the overall attractiveness of the market. Trying to get into the fax game? Probably not the best. Why not? Well, who's using a fax machine either then hospitals? How can you beat the current legacy players that have dominated the market share and new features aren't in the pipeline because they treat their products as a cash cow?
Talk to shoppers
Your biggest source outside your own head, opinions from friends & family and online sources is by talking directly to shoppers. When you talk to a stranger, they've got nothing to gain from talking to you - they also can be an incredibly honest source for a) what they find the most important and b) how they feel about the current players in the market.
They'll give you the 411 on how they feel about the customer service, and if there is an opening for a new player to enter the space. Keep in mind these are busy people, they're going about their daily lives - so enticing them with either a reward at the end of the interview, or keeping your questions brief are key to getting information.
Remember not to asked biased questions: 'would you buy this...' think more about open ended and you putting in the work to deduce an overall collective opinion. What does this mean? Well if you're approaching let's say 50 people on the street, you can start off with a couple of easy questions: "what do you do for a living?" "I'm doing a quick survey, what do you enjoy to do in your spare time?"
Let's take an example; I'm interested in launching a new candy. I may ask people "do you like candy?" "what's your favourite brand of candy? why?" "what candies do you hate?" These are open ended, and if you wanted to narrow it down (say we're interested in launching a chocolate product)... "what's your favourite chocolate bar?" "what do you like about it?" "how often do you pick one up?" "where do you buy it?" "if out of stock, what's your second choice?"
This exercise is helpful because you may walk away thinking you've got a brilliant idea, or get clarity in terms of customer demand and what customers are really interested in.
Evaluating Your Ideas
Ideas are a dime a dozen, the hard part is executing and building a viable business model. Your startup idea may sound credible, but when trying to make a profit from it you could come up against further obstacles that might make you reconsider.
This is why business planning is so important. You need to understand what business structures make sense for your idea: sole proprietorship? Incorporation?
It's when you start planning for the business that you start to understand different cogs in the machine that need to be put in place in order for the operations to run smoothly. Different business types require different considerations, with some overlap. What do I mean?
Let's take a marketing consulting business for example. Key considerations for getting started would include the overall startup costs associated with software, but the delivery method is quite affordable. You could have various channels: your website, a Fiverr account, Upwork etc. to have various channels potential clients can find you through. This can also be a completely online business, right from out of your home. You'll need to consider digital marketing campaigns, and spreading the word locally through associations and any groups that could help point potential clients your way. Key business planning would include the cost of your services, what makes you different from other marketing consultants? Figure out the business finances, and project what potential revenue could be in the next few years.
Bit of a shameless plug here as well but we have a couple of helpful blog posts related:
We've built a complete program geared towards idea validation, it helps give you an understanding if there is a market demand for your business and ultimately if it's worth quitting your day job over to pursue.
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