Starting your own business will take a lot of work: you need to draw up a business plan, find investors, get a loan and find employees. But first of all, you need to choose an idea for your business. It can be a new product, service or technique, but the most important thing is that buyers pay money for it. Choosing a good idea requires creativity and market research. If you want to become an entrepreneur, consider the following aspects when choosing a business idea
Steps
Part 1 of 3: Developing an Idea
Step 1. Think about what goods or services could improve the quality of your life
Consider your own strengths and weaknesses. After analyzing your strengths and weaknesses, think about what could improve your life. Consider your life experiences. With a little time and creativity, you can determine what products and services would be useful to you in life.
Step 2. Decide what you would like to sell
goods or services. A new business idea is always based on a product or service. However, both of these aspects require creativity. Products and services have their own advantages and disadvantages that should be considered when making a decision.
- If you want to sell products, you need to come up with something new or improve existing products, and then finance their production. This process will be costly, but your bottom line will depend on the success of the product.
- Providing services will relieve you of the need to develop and manufacture new products. But you will need more employees - it is very difficult to develop a business if the services are provided exclusively by you personally.
- Both options involve marketing and advertising, so you'll have to spend a lot of time and money anyway.
Step 3. Analyze the problems of the selected industry
Most often, new companies or inventions are created against the background of problems in a particular industry. These problems will help you write your business plan. If something does not suit you, it is possible that other entrepreneurs face the same problems, which will give you the opportunity to develop in this area. Perhaps none of the existing businesses provide repair services for lawn mowers. This is exactly the problem that you can fix if you start providing such services.
Step 4. Build on existing business ideas
Instead of finding out about the problems in a particular industry, you can point out the benefits of a particular business. Try to use these benefits to your advantage. By promoting your own ideas in a specific area, you can start a successful business in a particular field of activity.
When Google was founded, there were many other search engines. But Google had a very precise algorithm of actions and was able to improve the search system on the Internet. Google was based on an already existing idea, search engines, and was able to improve on it
Step 5. Think about the future
Successful entrepreneurs always implement innovative ideas. They don't use outdated methods or technologies, but think ahead and know what will bring them success in the future. You can achieve this by determining what the next step is in promoting a product or service. As distance learning and video conferencing becomes more popular, you can start a company that organizes online meetings. By following the latest innovations and taking a step forward, you can find a cutting edge idea that will possibly revolutionize the market.
Step 6. Conduct a preliminary purchasing power study
Although market research is usually done after choosing a business idea, you can do preliminary research to find out the needs of your customers. This will help you choose a business idea based on the needs and desires of people.
- Research the most popular search keywords on the internet. This will help you understand what Internet users are most often looking for and find an interesting business idea. Read the article on how to “find the most popular keywords”.
- You can also use services such as Google Adwords or Bing Ads to find popular keywords. These services will help you analyze search engines and find out which keywords are most often used in searches.
Step 7. Apply your skills to another area of expertise
You can also come up with a new product or service using skills acquired in any area of expertise. You can creatively apply your own skills to a completely different area of expertise. For example, Leo Fender was a radio repair specialist. He used his own knowledge of electronics and sound reinforcement to create the first electric guitar. Consider all your skills and abilities when choosing a business idea. Perhaps you have a talent capable of revolutionizing a completely different field of activity.
Step 8. Write down all your ideas
Every idea, no matter how meaningless and insignificant it may seem, has value. Write down all your ideas in a notebook. Carry a notebook with you at all times, because you do not know at what moment inspiration will light up you. This way all your ideas will be safely stored in a convenient place. Review your entries regularly and keep expanding the list.
While you can store information in a notepad, remember to transfer it to your computer. In this case, if you lose your notebook or something happens to it, you will have a fallback. Storing information on an electronic medium allows you to compile a list of ideas more accurately and efficiently
Step 9. Use creativity
At this stage, you should not evaluate your ideas too harshly. Nothing should limit you at the stage of choosing a business idea. Better get rid of unnecessary thoughts and review your notes. There are several ways to stimulate creativity that can help you come up with a business idea.
- Walk more. According to some studies, walking stimulates brain activity, especially creativity. Go for walks several times a week, especially if you can't think of anything new. Not only will this benefit your health, but it will also help you come up with more business ideas. Take a notebook with you to jot down your ideas.
- Go shopping. If you are looking for ideas, go to your local store, preferably a mall with a wide range of merchandise. Walk through the rows and pay attention to the available products. What does the store offer to its customers? What are its disadvantages? Also pay attention to what items are missing. This will help you understand which products are likely to become hot commodities.
- Talk to people in different fields of activity. If you are looking to create new software, talk to more than just computer experts. Reach out to people in other fields, especially those you don't know well. Find out how various products and services help them in life. This will help you start thinking wider and looking at things from a different angle. New ideas will spur your creativity.
- Use the keywords “how to think wider” to find new ideas to stimulate creativity.
Step 10. Take breaks
Although it is too mundane, the stories of people who have an insight while taking a bath are true. New ideas come to our brains precisely when we are not trying to come up with anything at all. Taking a step back will allow your brain to relax. During your holidays, try not to think about business or products. Just distract yourself with a movie, book, walk, or whatever you love to do. Perhaps during the break, an insight will come to you that will solve all your problems.
Step 11. Get a good night's sleep
In addition to rest, it is very important to get enough sleep to stay in shape. Get a good night's sleep to keep your brain working better. Remember to keep your pen and paper next to your bed. It is possible that insight will come to you in a dream.
Part 2 of 3: Evaluating Ideas
Step 1. Weigh your strengths and weaknesses in relation to the business plan
Even with a good idea, you may not have a realistic way to implement it. Before moving on to the next step, think about how realistic your business plan is. For example, if you are thinking of opening a good restaurant, but have never worked in a restaurant or taken a cooking class before, then your idea will be difficult to implement. Search the Internet for information on how to get rid of unrealistic goals, and you will learn how to drop hard-to-reach ideas and achieve more realistic goals.
Step 2. Find out if someone has used your idea before
If you come up with an idea, it is possible that someone else has already implemented it. Once you come up with a business idea, find out if someone else has used it before you. You don't want to spend months of work and financial investments on an idea that has already been implemented. To avoid this, find out how original your idea is.
- First, use a search engine on the Internet. Enter the service or product you came up with. You may not get an exact match, so research the sites and determine how original your business plan is.
- Also, look at the US Trademark and Patent Office for information. This is a more complex task and much more difficult to accomplish than searching on the Internet. You may even need to consult a patent lawyer to gain a better understanding of the system.
Step 3. Assess the competition
Don't panic if your idea was actually used by someone else. Many new businesses face competition at the start of their operations, but this problem can be dealt with by improving the services and products provided. So now you have to research competitiveness.
- Become a customer of your competitors. Buy a product or service to understand the work of someone else's business from your own experience. So you can analyze the advantages of competitive companies and understand how to improve the proposed product or service.
- Talk to your competitors' buyers. Conduct a formal or informal survey among your competitors' buyers. Ask them what they like about the company's services and what not, and correct any shortcomings in their own business based on the opinion of customers.
- Analyze the websites of competitors' companies. You may find there a testimonial page or blogs discussing the services provided. Read the information carefully and find out how satisfied the buyers are with the services of these companies.
Step 4. Share your ideas with family, friends and colleagues
Before researching customer needs, talk to people who can honestly voice their opinion. Share your idea with them and tell them how it will be useful in a particular field of activity. Ask them if they would buy a product or service from you, and ask them for an honest answer. In this case, you will receive a preliminary assessment of your business from trusted people. They will either appreciate the idea and provide constructive criticism, or they will honestly tell you that your idea has no future. Whatever the verdict, you need to hear it.
Step 5. Talk to potential buyers
Once you formulate an idea and tell your close friends about it, you need to find out who your customers will be. Make an effort and see if anyone wants to buy products from you.
- Conduct the survey in person. Find people who might be interested in your business. If you are developing a new type of fishing lure, go around a few sporting goods stores and talk to the people in the fishing tackle department. Provide a short description of your proposed business and ask buyers if they are interested in your offer. Don't drag out the conversation. While some people will want to continue the conversation, most of them will not like you taking so much of their time.
- Send polls by email. There are easy ways to create a survey using programs like Google Forms. Since you haven't fully developed your business yet, you may have problems sending your survey by email. To fix the situation, try sending out the survey to your personal contacts and ask someone you know to help you distribute the survey.
Step 6. Identify risks and barriers
All business plans involve financial or personal risks. You may face obstacles ranging from lack of funds to problems with a relationship with a business partner or a breakdown in personal relationships. Prepare for possible risks. Calculate ahead and determine what obstacles you might face. By identifying potential risks, you increase your chances of successfully overcoming them without harming your business. There are several challenges that aspiring entrepreneurs face, so keep the following points in mind to overcome the obstacles.
- Only work with people you trust. A bad partner or supplier can ruin your business. Avoid these kinds of problems by partnering only with reliable people.
- Always calculate your budget before developing your business further. Many aspiring entrepreneurs fail due to lack of funds. To avoid debt and bankruptcy, abandon your idea if you are short on funds.
- Get ready to change. Even if you manage to start your own business, the market environment can change at any time. Adjust to these changes to stay competitive.
- Move on even if you fail. Many aspiring businessmen fail. You must understand that this is not the end and that you can continue to develop in a different direction with better funding.
Step 7. Assess the prospects of your plan
Ultimately, you will have to make the final decision and determine if your plan is feasible. There are several things to keep in mind when evaluating your plan. Take them seriously to see if it makes sense to keep developing your business plan.
- Consider the results of your surveys and interviews. Do you have any market prospects? Be honest with yourself. You shouldn't convince yourself that your business has prospects if only a few people are interested in it. Move on in the other direction if no one has bought your idea or product.
- What is the level of competition? If you are faced with tough competition, then it will be difficult for you to be the first. Take some time and come up with a plan for solving the problem. This will give you a chance to win this fight.
- Do a cost analysis according to your plan. Even if there is a good market for your idea, you need to determine how cost-effective it is. If the costs of starting and growing a business are too high, you may need to reconsider your plans. In addition, the source of funding must be considered. Find out how much your plan will cost and how much you will make from your business. Look for information on how to do a cost analysis.
Step 8. List your ideas by importance
If you have several ideas, you should make a list of them, from the most promising to the least profitable. Analyze them according to all the previous points and find out how feasible they are. Then list each idea in order, starting with # 1, which is the best idea. This way, you can concentrate on the best business idea. The following ideas on the list can be either discarded or improved upon before attempting to implement.
Part 3 of 3: Realizing an Idea
Step 1. Choose the best idea
After carefully weighing the various options, you need to choose the best one. This will be exactly what you focus your efforts on. Once you've picked the best idea, start making it a reality.
Step 2. Determine the structure of your business
There are various business structures that you can use for your business. Each of them has its own characteristics that will affect the preparation of a business plan, as well as the legal status of your company. Some of the structure options include a sole proprietorship, a limited liability corporation, and a partnership. Go to the U. S. USA Small Business Associations to learn more about existing structures and choose the best one.
Step 3. Develop a business plan
After choosing a business idea, move on to drawing up a business plan. The business plan defines the activities of your company and the services provided, and also helps to analyze the potential costs and profits of the company. This will not only help you focus on your ideas, but it will also give investors an idea of how profitable your business will be. Find information on how to write a business plan with detailed instructions for creating the best plan.
Step 4. Find a source of funding for your business
If you do not have your own savings, you cannot implement a business idea without funding. After drawing up a business plan, submit it to investors in order to receive capital for starting a business. You have two options for raising capital: banks and private investors. Both options have their advantages and disadvantages, so you can end up using both.
- Banks. You can get a loan from the bank for several months or years depending on its type. This will cover the start-up costs and the first few months of working in the chosen field.
- Private investors. They can be friends, relatives, or other business owners interested in investing money. You need to find out if you will have to pay back the loan with interest, or if the people concerned really want to invest in the development of your company. To begin with, you can draw up a contract that will indicate the terms of the agreement. It must be certified by a notary in order to avoid problems in the future.
Advice
- Alternatively, you can choose several business ideas, even the most incredible ones, and then return to reality and eliminate the most impracticable ones.
- Don't worry if you have a few not-so-viable business ideas. You will most likely have a lot of ideas that will go nowhere, but in the end you will come up with something really worthwhile. The most important thing is persistence.