How to come up with a business idea, is a question I’ve been asked many times over my business career and through my volunteer mentoring. Right now, so many of us are looking for a change, for freedom, because we’re either sick and tired of the ways things are being done, or we need to think laterally about our future.
Running a small business is one of the most rewarding experiences, and I’m a firm believer that there are lots of opportunities, as long as you know where to look.
There’s no guarantee however, that your journey will be paved in gold. The business graveyard is littered with failed dreams.
So… I've put together my steps to finding your winning business idea.
Before you jump in
If starting a business is just about replacing a salary till another job comes along, then maybe it’s not for you. If you go in with the attitude, ‘it’ll be easy’, if you reckon you can work less hours and make more money, I suggest you keep sending out your CV.
Or do you believe you know it all about your industry and market, and don’t need to do any homework? Well, all I can do is wish you luck!
But if you’re serious about making your future more secure, then read on.
In my podcast, I chatted to Dommonic Nelson when he was starting his journey at Clevtec in Texas. One of the many nuggets he shared with me was that his fellow college graduates all went into high paying jobs, fancy cars, and living the high life.
But he chose the path of an entrepreneur. He doesn’t own a fancy car, but he’s in control of his future, and calling the shots. And he’s starting to see the rewards for his long hours.
What I learnt the hard way
Stop looking for a magic bullet that’s going to instantly propel you into the million-dollar celebrity stakes as promised in the hypey Social Media ads, and spend your days on the beach. It doesn’t exist. It’s good old-fashioned snake oil for the digital age.
From my experience of mentoring and reviewing thousands of ideas and business plans over the years, very few start their journey on the right foot. Most learn the hard way, and sometimes that learning means they have to give up on that particular idea and start again.
Not only have I seen others do it, but I did it as well. Yep, totally crazy. But, like most things in life, you learn from them, it makes you stronger, right? Well, yes, but it would have been so much easier to have learnt from others, and flatten out the obvious bumps in the road first.
I’ve lost count of the number of blogs I’ve read on this subject, and they all share what they believe to be the steps needed to get you off the ground. But if it was that simple why are so many still failing?
What’s your capability, your Superpower?
Knowing your strengths and passion is the best place to start, and find the right business for you. It’s challenging enough without having to learn ‘how to do it’ as well.
Like a young guy I talked to a few weeks back. He hates his day job, so his business idea is to be a graphic artist and web developer. I assumed he would know how to build websites, but once I saw his site, I realised he had no idea. I know, really? But he’s by no means the first I’ve come across.
Blend with opportunities
Since Covid, much of the business press talks about the new opportunities, that come from the disrupted and changing customer needs. We’ve all changed, there’s no going back!
What you need to do is look at those opportunities and blend them with your capability.
Ask yourself, “How could I use my Superpower to overcome that problem customers have?”
Then ask, “Is there someone I could collaborate with to make that happen?”
In that blend could be your winning business idea.
Don’t expect to come up with the idea on the spot
Give your mind time to digest the information you’ve just absorbed. It might not happen immediately - in fact it might take days, or even weeks before the concept starts to form in your head.
Go for a walk, meditate, have a shower, play a sport, pretty much anything to take your mind off trying to find the answer. It’s just the way our brain works. Then, when you least expect it, something will pop-up as a flash of inspiration.
I have a recording app on my phone, so I can capture the idea as soon as it comes to me.
Do your homework
I can’t tell you how many ideas I’ve seen where the person is so passionate that they can’t see any obstacles. Yes, you need self-confidence, but not blind spots, which can be fatal. You need to challenge your idea, and ask the tough questions…
“Do people really need this?” “Would they pay me for that service?” “Who do people currently use to solve that problem?” “How would my product/service be different?”
Ask your trusted network
I haven’t talked to anyone that thinks market research isn’t important. But almost no one does it properly.
Have a conversation, and listen more than you talk, or worse pitch! At dinner with friends recently, who couldn’t wait to share their new idea. I’m actually a target and love the first impression. But when I said something about what I’d really like and currently use, they jumped in and said, “oh no we’ll be doing x”.
There’s no right or wrong, it’s about understanding your potential customer’s needs. So opening your mind and listening is critical.
Don’t assume. That will always get you into trouble!
Can you actually make money on this?
Almost no one, unless you’re a finance wiz, likes this next step.
But let me tell you, if there aren’t enough people interested in buying your product, it’s not going to fly. If you can’t make it for a price people will pay for, it’s not going to fly.
So, understand your audience, know what they use today to solve their problem, how much they currently pay for that solution, and work back from there.
Think about how many people would be interested in buying your product. If for example you’re a mobile computer tech, online searching will uncover how many households with computers are in an area you can service. Government census stats are usually available for free.
But obviously not everyone is going to use you, so drill down. Ask “Who do they use currently?” “How much, on average, would they spend per year on repairs?”
If you still reckon it will work, then you need to work out how much it’s going to cost you to set yourself up. Along with your pricing, this all forms your strategy.
That’s not the end…
Impossible for me to download everything in my head in a simple blog post, but I hope this is a useful start.
The other thing you can do is attend my Free Masterclass for Startups, where I download a lot more in practical, bite-size action-steps. Everything you can tap into at this stage will help your understanding, and build a stronger foundation for your future.
All the best,