What it is: A business idea is a concept or market opportunity to make money by creating and commercializing a product. In other cases, it may not be for profit purposes, but rather for social purposes as is a social enterprise, where profits are allocated to maximize social benefits instead of owner wealth.
New business ideas can emerge in all industries. In the primary sector for example, you may find opportunities to market organic vegetables to consumers around your home. You see your neighbors are interested in it. Or, you make clothes or crafts to market in the local market. Or, you might also be interested in starting a dropshipping business, where you buy goods from third parties and ship them directly to your customers.
Where do business ideas come from? What makes a business idea promising and worth working on? Let’s discuss them one by one.
The main sources of business ideas
Business ideas can come from anywhere. It may be from what you are passionate about, previous work experience, exposure from experts or business owners, or a solution to your previous problem or someone else’s problem.
- Own skills or hobbies – skills, interests, hobbies are great sources for making money and starting a business. You can monetize it, for example by building a website.
- Personal experience– bad experiences can be an inspirationto find solutions and business opportunities. If a lot of people are having a similar problem, you might be able to monetize a solution to the problem. You can also seek inspiration for new businesses from the experiences of others.
- Previous work experience – the workplace is not only about earning a salary, but also gaining new skills, experience and business opportunities. You may be able to fill in the gaps for solutions to problems your former company is facing.
- Conferences and exhibitions – for example, attending a franchise conference can be an opportunity for you to work with franchisors and open outlets in your area.
- Small budget market research – surfing the internet is a valuable resource for finding business opportunities. For example, you can learn from a business idea abroad and adopt it in the local market.
What makes a good business idea?
Generating a business idea is challenging. However, having a few ideas is not enough to start a business either . You have to choose which one is the most valuable and promises to make money. It is also a challenging job.
What makes a good business idea? Here are the criteria:
- Profitable – enough to generate revenue and outweigh the costs.
- Innovative – creating something new and never existed such as a computer at the beginning of its invention, developing a new product from an existing model such as developing a laptop, or improving an existing product such as introducing a new laptop variant.
- Solving problems – offering solutions to existing problems, which cannot be solved using existing products on the market. The product may offer a cheaper or better solution.
- Substantial demand – enabling your business to grow and achieve higher economies of scale to lower costs and increase profits.
- The market is growing – promising potential for further growth so the business can continue to generate revenue.
- Sufficient resources – you have or can accumulate sufficient resources to run and make the business successful.
- Resilience to market dynamics – you have a great opportunity to grow your business. For example, intense competition can make your business close, even before you can cover the initial capital.