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Starting your Own Business: Finding the Right Idea for You
How Do You Find the Perfect Business Idea?
The answer to this question is that the perfect idea probably doesn’t exist. Your aim should be to choose an idea that is practical and workable, given your skills and experience, and your long-term goals. It should also be an idea that fires your enthusiasm and something that you can really believe in!
Some new business people find it hard to settle on a single business idea because they are worried about missing out on new opportunities or narrowing their options too early on. But remember, even when you have started your business, it is possible to add new services or products, or even to begin a second or third business. You and your businesses will continue to grow and develop – so in selecting your first business idea you are not saying ‘no’ to other opportunities. However, to give your first business idea a really strong start you might need to put other ideas on hold for a while!
Inspiration for your new business may come from:
Inventing something new – some people are naturally good at finding original solutions to problems. Others come up with completely new ideas based on new technology or other developments. Sometimes people are driven to invent a solution when they are faced with a problem in their own life and realise there is no solution… yet.
copying someone else’s idea – this can be a great starting point. If an idea is working for one business there’s a good chance it could work for yours too. However, this one needs to be handled with care. If the marketplace is already overcrowded, you will need to offer something really special to earn your share of customers.
“Sandra was considering opening her own hairdressing salon – other hairdressing businesses in her small town seemed to be doing very well, and she was an experience stylist with several years professional experience under her belt. However, once she began researching her market, she realised that there were six salons in a small town of perhaps 15,000 people. It also became clear to her that although a couple of the salons were doing very well, two of the others were really struggling. This was an overcrowded and highly competitive market. If she wanted to open her salon in her home town Sandra needed to decide how her business would be different. How would she stand out from the rest and attract customers?”
Spotting a gap in the market- this often happens by accident. Perhaps you look everywhere for something you need, only to realise that no one in your area is providing it.
Developing your own skills and interests – building on your own areas of expertise can be a great starting point, not least because you probably already understand the market and the needs of your potential customers quite well. Many people dream of earning a living doing something they love, and there is no reason why they shouldn’t achieve this goal, given careful planning and hard work.
“Graham was a keen fly fisherman. He decided to start a business running fishing holidays to Iceland, a place he had visited several times himself, and where he had several useful contacts. The business was highly success and with three years he had expanded his fishing holiday business to cover Canada, Russia and Norway as well.
Graham’s business catered to a small, specialised market. This is sometimes called niche marketing.“
Business ideas may be found in the most unexpected places or in everyday situations. Ideas don’t need to be wildly inventive or original to succeed:
“Often the simplest and most obvious ideas are the best. When I first started out, I picked up a yellow pages and flicked through to find out what everyone else was doing. I reasoned that if they were already doing it, that proved there was at least a market for it!”
Charlie Stevenson.
Some exercises to get you started:
List all the skills you have.
Think about the experiences you’ve gained in your work and personal life. List the most significant.
List any other hobbies and interest you have.
Ask your friends/family for their impressions of your greatest strengths and skills. Ask them to tell you honestly what you think your weakest points are in terms of setting up your own business.
Look out for gaps in the market.
Explore other businesses, and identify those you might be able to copy. Look for ways in which you could improve on the business in question. What could you offer that they do not? How could the product/service be improved?
As noted earlier, finding the right idea means being honest about your own skills and limitations. This is just as important as all the other factors considered so far, if not more so.
Summarise your key business idea. What product or service are you going to sell? Who are your clients or customers?
Assessing Your Idea
So you have your idea… But how good is it really? Will it stand the pressure of the marketplace? Are there enough potential clients/customers to support your new business? Is the market already overcrowded? (While an overcrowded market definitely shouldn’t put you off – after all, it shows there is a lot of demand for your product or service – it is a signal to step back a little and assess the situation carefully.)
The first and most important question you should ask is:
What is special about my idea? In what way is it different from other, similar products or services already on offer?
Now work through the following questions, jotting down your answer to each one.
What is it that you will personally bring to the business in terms of relevant experience and expertise? In what way are you qualified to run this particular business?
And just as importantly, are there any skills or is there any knowledge that you need to acquire before you can run this business?
Is there a market – a need for the idea, and customers who will pay for it?
How big is the market, and how will you reach it?
Who are your main competitors?
How will you fund your business idea? (How much income do you need?)
What might go wrong?
It will also help if you keep up-to-date with the current events to help you identify new trends and new products being launched. You should think about whether your idea serves a need created by new technologies and consider whether social trends will boost or cut demand for your product.
Ultimately your business idea is only a good one of it allows you to create a successful business.
Will Your Idea Stand-Up?
It is important to assess your idea objectively in the cold light of day. By all means seek expert opinions, and ask the opinion of people you trust. But make your own assessment of the facts too. Business history is littered with examples of highly successful business ideas that no one but their inventor believed would work – one need look no further that Dyson’s bagless vacuum cleaner or Richard Bayliss’s clockwork radio. What distinguished these two inventors was absolute determination and the ability to grit their teeth and plough on, regardless of criticism and opposition.
Interestingly, in a recent follow-up to the much-acclaimed UK series Dragon’s Den, it was often the businesses the Dragons criticised most heavily and decided not to invest in that were most successful. Did the Dragon’s criticism drive the rejected entrepreneurs to prove them wrong, or does it simply show that even successful business people don’t necessarily recognise a good idea when it lands in their lap!
But that doesn’t mean you should completely ignore other people’s opinions or skimp on market research. Indeed careful planning and research will allow you to hone your original idea, creating an embryonic viable business.
Thorough market research is critical – it can tell you whether customers really are willing to buy your product or service. It can also give you a good idea of what you should be charging and reveal who your competitors are.
Carrying out the following key steps will reveal whether you have a viable idea or not. At best they will give you a solid launch pad for your business, at worst they will reveal an insurmountable hurdle that causes you to seek out alternative ideas. But if there is a major problem, it is better to identify it now than six months down the line when you have already invested time, money and emotional energy into your idea.
Investigate the marketplace thoroughly.
Identify your customers and get to know their likes and dislikes.
Identify your competitors – how many of them are there, and how successful are they. Who is the lead player? Who is second? Find out as much as you can about them – collect brochures, leaflets and any other information you can. Test out their websites and call their enquiry service or visit their shop/office if it is open to the public. Analyse their service/product honestly and objectively. What are their strengths? What are their weaknesses?
How much is it going to cost to launch your business (that is to get the first product on the shelf, to serve the first customer or to provide your service for your first client)?
Where is the money going to come from?
Include money in your plan for contingencies. Consider what might go wrong – not just financially, but in other ways too. Plan for the unexpected and think through both the best and worst-case scenarios.
Assess your businesses long-term potential.
Visualise yourself running your business.
Advice from the Business School at Learning Curve Home Study.
