Starting and running a business is a wide field of information, experience and knowledge. It includes many topics, such as company administration, taxation, marketing, sales, accounting, law, information systems, logistics and finance. These tend to be the aspects common to almost every business. On top of this you will have aspects that are unique to your particular business, such as: engineering, technology, electronics, programming, trade skills and so on. However daunting all this may sound to a new or prospective business owner, the biggest hurdle they often face is coming up with an idea for a business.
So many entrepreneurs want to start a business, but just can’t come up with a good idea. Others claim to have tons of ideas for businesses, but don’t seem to ever really start that many, So before we start explaining how to find business ideas, lets first define what we mean by a (good) business idea.
What is a (good) business idea?
There are two main requirements that need to be met for an idea to be considered as a good business idea – at least superficially. When you investigate deeper into the idea you might discover information which tells you that it is in fact a bad idea, but at least with these three main factors we can eliminate most bad ideas. We are going to use the word product to mean both product and service. It just makes the text so much less cumbersome.
No.1 There must be potential customers who want your product.
It is not good enough that you think your business idea is a good one. You need to know of other people or companies that definitely want your product. Why would they buy from you and not someone else? Who are they buying from now? Ideally you want quite a few customers willing to buy your product. Having just one customer, even if they are a big company, is a very risky way to start and run your business. So who are these customers? Do you know their names and contact details, or are you just imagining a group of people. Before you spend time, money and effort on starting a business, make sure you know exactly who will be buying your product from you.
No. 2 The customers must have the ability and desire to pay for your product.
Once you have determined who your customers will be, can you determine if they have the ability to pay. If they can pay, then that is great and they have a good potential to become customers. If they do not have the means to pay, then they cannot become customers, even if they are desperate for your product. You will be creating a charity and not a business. That is not a good business idea.
The categories of new business ideas
Now that we understand that we will need several willing customers who are able to pay for our product, before we have the prospect of a new business idea, we can now start looking at the various categories of generating new business ideas.
When going through each category you need start thinking of people or companies who will buy your product.
Category 1. Generate business ideas based on your skills and experience
If you are already employed or have been in the past, you already have insight into that business world. You will know who the customers are, what they like to buy, what the prices are and how that particular industry works in general. What did your customers complain about? If you can find some common complaints, you might have a business idea right there. For example, if you worked for a company where there was a group of customers who always complained about slow deliveries or long lead times, you could start a conversation with them. Perhaps they would be prepared to pay a slightly higher price in order to have their product delivered quicker. That is a business opportunity.
If you are a sales rep, then you are in an excellent position to see business ideas. Any time a regular complaint comes up, you just need to come up with a way of solving that problem. If there are enough clients with that problem, you might have a few of them as customers for your future business. In addition you get to visit customers and see what they do in their businesses. Get them to talk about their business problems. Wherever someone has a problem, there is an opportunity for a business to solve that problem.
You can even go off on your own as a direct competitor to your previous employer – if you think you can do a better job.
Category 2. Generate business ideas by looking at other successful businesses.
Another way to come up with ideas is to find examples of other successful companies and do something similar to what they are doing. It is not necessary, nor is it realistic to expect to come up with original business ideas. In fact, original business ideas are extremely difficult and expensive to sell because you have to educate your customers and market your new product in far more detail. Then there is always the nagging question as to why no one else has done it yet. Perhaps there is a very good reason and that is what actually end up making it a bad business idea.
Copying big business models is not easy, because they often need high amounts of capital finance to get going. So rather look at small businesses in your area, in neighbouring areas and even on the internet in other parts of the world. If they seem to be doing well, why not try and set up something similar in your area.
Category 3. Generate business ideas by looking at problems people face in your area.
Most successful businesses stay in business because they solve customer’s problems. That is essentially what any good business does – it solves someone’s problem. So listen at your next social gathering, keep an eye on social media and ask around. What are people complaining about? What is causing them trouble? Could you possibly help them out for a fee?
- Cell phone companies solve our problems of wanting to communicate with others.
- Banks solve our problems around storing our money and paying people we owe.
- Supermarkets solve our need for a supply of food at an affordable price.
- Taxis and buses solve our transport problem – most of the time.
You get the idea I hope. People love to complain. You should find lots of ideas this way.
Category 4. Generate business ideas by solving a problem you have.
This one is similar to the previous category, but is a lot more risky. Simply because you are only a single person. So just because you have a problem with something does not necessarily mean others will have the same problem. However, it is a good place to start. You have incentive to solve the problem and if you do so successfully you should be able to turn your solution into a business.
Category 5. Do something that you love doing.
There is much debate as to whether you should turn your hobby into a business. When you have to do your hobby every day as a job, you might lose the passion for it. Others say it is worth the risk. Your biggest challenge here is finding a way to get paid for this type of business idea. Common hobbies are things like playing soccer, video games, listening to music and painting. These are very difficult to make a business out of. If however you have a hobby that is a bit more niche and not so common, then maybe there is an idea for a business of sorts.
This article will have disappointed some of you who were hoping or expecting a list of examples of business ideas. We will follow later with a post on these, but don’t get your hopes up. These types of common business ideas are not likely to make you rich. They tend to be heavily over traded with many competitors. The folks with genuine clever and profitable business ideas will not be broadcasting them for all to see. Instead they will have spotted a need in the market and then quietly gone ahead and come up with a business idea to meet that need.
Remember that your business idea does not have to be unique and amazing. Instead go for something that has been done before and you simply improve on it a bit by making something stronger, faster, lighter or easier to use.