Coming up with a business idea requires determination, preparation and even carving out time for meditation. More importantly, there’s no one way to find your winning concept, so you can test the numerous channels designed to get you there.
If you're keen to start a business but have no idea of what you might sell, or offer as a service, we've put together this article to offer the best techniques to come up with a business idea.
How to come up with a good business idea:
01. Brainstorm ideas
When coming up with a business idea, our mind can run in circles and we often feel like we're hitting a wall. When this happens it's probably a good idea to take a breath, and then start brainstorming.
Don't be afraid to think beyond just your own ideas when trying to come up with a business name. You can reach out to friends and family for their ideas too. Staying on top of new technology and business trends is always a great way to get inspiration for a business idea. The same goes for staying alert on social media for great ideas, either because someone else is doing it and you think you can do it better, or more uniquely. Or because someone else's idea triggers your own creativity and inspires a new idea.
02. Ask yourself, 'What’s next?'
Some of the best business ideas are those that can anticipate a trend, new technologies or change. These ideas often originate from asking “What’s next?” thus inspiring us to think outside the box and evolve as a result.
Consider the example of Medium, an online publishing platform, which launched in 2012 and remains at the forefront of blogging today. As Alexis Lloyd, VP of Product Design at Medium, said on Wix’s business podcast “Now What?”: “So if you create something now, you want it to be able to be integrated into whatever device or platform comes along down the road …. [For example] you had this idea that print media was the winning content mechanism for a very long time and people kept being convinced like, okay, we will just have to figure out which one of these things that’s emerging is going to be the next thing.” To sum up, coming up with a business idea means connecting the present and future.
03. Use your skill set
Figuring out how to come up with a business idea doesn’t have to be tricky. You can start by evaluating your own skills (and preferences, such as wanting to make money from home) and see whether they can be combined in a different field. For instance, marketing and design, chess and finance, or teaching and coding. Having a diverse range of backgrounds can double your chances of finding the right niche for your next entrepreneurship.
04. Improve an existing business
Here’s a foolproof strategy to starting a business right away: Think of a company you admire and how you can improve what it does (one common improvement is working towards businesses that run themselves). The task is to find a model of someone who has fulfilled your entrepreneurial goals and actually experienced success.
“It’s always easier when you’re starting a company to try to improve an existing idea,” said Paul B. Brown, co-author of the 2012 book Just Start. With a good example to follow, you can begin brainstorming new ideas around your idol’s winning business. After all, Hersey’s did not invent the chocolate bar, but was a pioneer in producing bite-sized pieces of chocolate, Kisses, that turned the company into one of the most popular brands of candy in the world.
05. Solve a problem
One way to come up with new business ideas is by assuming the role of a problem solver. From climate change to better internet privacy, there are numerous issues we face today which have obvious yet not simple solutions.
For instance, it takes real innovation to tackle the world’s reliance on fossil fuels, but Tesla CEO Elon Musk’s mission is to convert everyone to adopt sustainable energy sources instead. His line of Tesla electric cars produces less CO2 than fossil fuel cars, the batteries are designed to last longer and then recycled, and the entire Tesla factory workplace is better than the industry average in terms of safety and sustainability, according to the 2019 Impact Report.
Don't forget that part of coming up with a business idea is understanding what type of business or business model you will need to make it happen. Solving a problem with your idea, might make a freemium business model the best choice, or you might choose to opt for something else. Understanding how you'll solve a problem is great, how will you create the business around it to do it should be your next step.
06. Build the same, but cheaper
There are products and services whose core is unshakeable, but perhaps whose price is high for many potential customers. If you can make the equivalent high-quality product for a fraction of the price, then you’re on the way to becoming a great entrepreneur.
Helping people save money can ensure making their lives a little easier. Not everyone can afford a Nespresso machine, however coffee lovers across the globe appreciate a nice caffeine boost in the form of a tasty espresso. Today’s marketplace is filled with an array of coffee machines producing award-winning espresso drinks at affordable prices.
07. Fulfill a need
People’s physiological needs include food, water, sleep and sex. At this point on the list, you can consider how to come up with a business idea in response to meeting either of these needs.
While many existing products and services are designed to do just that, it doesn’t mean every potential way to meet a need has been thought up. Take the reusable water bottle industry as an example of the most competitive markets to enter, yet each year more companies are launching their own version of bottles. That’s because these businesses are fulfilling an ever growing hydration need.
08. Get in research mode
The exploratory research phase of coming up with a business idea doesn't happen in any particular order during the process. However, it’s essential to read and research the industry you’re attempting to break into. You can come up with a simple research plan that states the objectives of the research, such as refining initial ideas, and include the type of information you’ll need to gather like types of products or services and competitors. Be sure to consider the entire product life cycle. You'll need to create a proof of concept (POC) in order to accurately test your business idea.
Don't choose your business idea without doing extensive market research. You'll need to understand what your competitors are doing, but also you can use it to understand more about your potential customers pain points. Looking for specific ideas of how to do this? We've put together a few ways to get the information you need.
Surveys: Surveys are a common method of gathering information about a target market. They can be conducted in person, by phone, or online. They can be used to gather information about consumer preferences, demographics, and purchasing habits.
Focus Groups: Focus groups are a type of qualitative research in which a small group of people are brought together to discuss a particular topic or product. This method is often used to gather opinions and feedback about a product or service. Try not to use family and friends for these as you'll want unbiased and genuine opinions and reactions to your idea.
Online Research: Online research is a popular method of gathering information about a target market. This can include analyzing social media data, searching for industry statistics and trends, and using online tools like Google Analytics to track website traffic. You can also use popular SEO tools, like SEMrush or Ahrefs to understand more about your competitor's site, including their traffic and keywords.
Competitive Analysis: Competitive analysis involves studying the strategies, products, and services of competitors in order to understand the market and identify opportunities for growth.
Customer Interviews: Customer interviews involve speaking directly with customers to gather information about their needs and preferences. This can be done in person, over the phone, or through online surveys. You can also use social media polls to connect with them.
Observation: Observation is a research method in which researchers observe consumers in real-world settings to understand their behavior, emotions, and decision-making processes.
Experiment: Experimentation is another form of research, where changes are made in the product or service, and their impact is measured.
Trade Shows: Trade shows are events where companies in a specific industry come together to showcase their products and services. Attending trade shows is a good way to gather information about new products and trends in the industry. Similarly other industry events, including webinars and conferences are a great way to understand more about your business idea and to connect with like minded business owners.
Feedback: Don't be afraid to ask for feedback on your business idea, be it a product or service. You can start with friends or family, but also send out amongst potential customers as a free trial, or even to social media influencers. Swap promotion for genuine feedback and then use that to improve on your idea.
09. Invent a new service or product
With so many companies competing in an already crowded marketplace, at the end of the day, one is left wondering whether there’s anything new to invent?
The truth is a big part of coming up with a good business idea is identifying a need not being met. There are many creative examples of companies tapping into new market needs within the app world, where each app development staked their claim by selling a service that could “change the world.” From cheaper ride sharing to faster food delivery, Uber and Wolt are among the best mobile business ideas to date.
On the product side, take the example of SPANX founder Sara Blakely who created an original undergarment when she realized she didn’t see anything like SPANX in stores. It was her “a-ha” moment that revolutionized the underwear industry and today, SPANX can be found in nearly every female household in the U.S.
When coming up with a brand new business idea don't forget to factor in potential scalability. If demand really soars, will you be able to scale your business and production to meet it. Tied up with this is, is this an idea that can last beyond an early trend and become a must have product for potential customers over the long term too.
You will also need to check there are no legal or regulatory blockers to a specific business idea in your state or country. There may be specific laws about where such a business can be run from, or laws governing how specific products are manufactured. Do your research first before running with your idea.
How to come up with online business ideas?
Coming up with an online business idea involves many of the same steps we've already discussed. You'll just need to think more carefully about the type of idea you can run with, that can be sold and marketed online. You'll also need to decide which type of online business. For example, an eCommerce store is clearly a business idea that happens solely online. A pet walking business, on the other hand, can be marketed and booked online, but obviously the pet walking has to happen in person.
Business ideas that can be started and run completely online include creating and running online courses, online tutoring, app development and testing, virtual bookkeeping and content creation.
Business ideas that can be managed and marketed online but which still need to be executed in person include any form of service business - pet care, in-person tutoring, baby sitting, selling and renting properties, delivery services.