This article was written by John Rau, SCORE Orange County Business Mentor
Are you searching for business ideas and want to start a business? How do you decide what it should be? You don’t’ want to pick one just because it sounds like a fun thing to do. You want to pick one that makes economic sense.
In her article “Starting a Business: Finding Business Ideas,” Susan Ward http://sbinfocanad.about.com/od/businessideas/a/businessideash.htm) says that “Sometimes the hardest part of starting a business is coming up with an idea, whether a small business is a part-time one person operation run out of someone’s home or a multi-million dollar company with dozens of employees. You know, for instance, that you want to work in a particular field but don’t know what you might do specifically. Or maybe all you know is that you want to start a business, but you’re on the lookout for an idea that inspires you.” To help you get started, here are some sources of ideas:
· “Business Idea Center-969 businesses you can start today”
(see http://www.entrepreneur.com/businessideas/index.html)
· “How to get 752 New Business Ideas” (see http://www.innovationexcellence.com/blog/2013/04/10)
· “Master List of Over 400 Business Ideas That You Can Start From Home” (see http://www.ahbbo.com/ideas.html)
· “101 Small Business Ideas—A List of Small Business Ideas to Get You Inspired to Start a Business”
(see http://sbinformation.about.com/od/business-ideas/a/small-business-ideas.htm)
Unfortunately, one doesn’t “order business ideas from a menu” as might be suggested by the reference sources above, but the value of the above-cited lists is to give you “something to think about”. To help you narrow your search and get started, S.H. Wallick in her article entitled “Finding Ideas for a New Business” (see http://voices.yahoo.com/finding-ideas-business-10258343.html) suggests the following approach:
· Before searching for a business idea, think about what you love to do and identify what you really enjoy, since the most successful businesses are based on an entrepreneur’s passion.
· Look for an unsatisfied or underserved need in your market.
· Look for ways to improve on what is already there. Improving an existing successful product or service is potentially the fastest and surest way to build a successful business. Starting a business with brand new products or services is, however, very risky.
· Look for ways to deliver a product in a new way.
· Look for ways to take advantage of societal changes. Catching a trend at the right time could get your new business off to a strong start. For example, the advent of the Internet created a new marketplace and entrepreneurs responded with thousands of creative new businesses.
· Look for the new and unique. Maybe even invent a new product or service.
Once you have selected your “candidate” business idea, the next step is to put it to the “personal due diligence test” in the sense of evaluating the business idea from the perspective of where it fits with what you want to do and how well it matches with your strengths, experience and capabilities. A suggested 10-step question-based approach in this regard that can assist you in this evaluation is provided in the article entitled “Ten Ways to Evaluate a New Business Idea-For Dummies” (see http://www.dummies.com/how-to/content/ten-ways-to-evaluate-a-new-business-idea.html) as follows:
1. Is this business idea something you really want to do? Take a moment to think about turning your idea into a business. Is your heart in it? Is it something you really care about? Is it how you want to spend your time? If you answer all of these questions with an enthusiastic “Yes”, then read on. If not, then maybe you need to go back to “brainstorming”.
2. Is this business idea something you are capable of doing? Beyond desire, is this a venture that you are capable of doing? Do you have the resources, connections, skills, and experience to convert this idea into a success story? And, if you don’t have everything required to do the job well, do you have the knowledge and resources to assemble a team that does?
3. Does this business idea tap into your personal strengths? Your strengths and weaknesses will go to work with you every day, so take time to consider whether your idea aligns well with your personal attributes or whether it requires talents in areas where you are weak. You may need to add team members who bring the appropriate skills and background to cover your weaknesses.
4. Can you describe your business idea in 25 words or less? This is sometimes referred to as the “elevator speech” in the sense that if you need a half hour to explain it to someone, then it’s too complex! As part of your evaluation, you need to pare down your idea to its essentials and describe it as simply and concisely as you can.
5. What’s the closest thing to this business idea in the marketplace? What is you competition? Are there other products or services similar to yours in the marketplace and, if so, how do they compare with your idea?
6. Does your business idea meet a need or solve a problem? Customers spend money because they believe that what they buy can solve their problems, fulfill their needs or satisfy their desires. If your business idea doesn’t address a real problem, need or desire, then you may have difficulty presenting your product or service as the best solution to meet existing needs.
7. Does your business idea take advantage of a new opportunity? Business success often hinges on having the right idea in the right place at the right time. Are there new customer trends and preferences in the marketplace not currently being met with existing products or services? Could you be “the first to market’?
8. What appear to be the biggest drawbacks and/or limitations to your business idea? Examples would include such considerations as easy for would-be competitors to copy or counter, maybe requires changes to ingrained customer behavior to get them to accept your product or idea, time from development of your new product idea until it enters the market place is potentially too long, or maybe it will require difficult marketing challenges, to name a few. The point is that you need to put your business idea in perspective relative to the potential impacts of any drawbacks and or limitations on your future success.
9. Will this business idea make money and, if so, how fast? You need to give serious thought to the following types of questions: “How long will it take before your business idea will generate profits?”, “How long can you afford to wait”, “Who specifically will spend money for your product or service?”, and “After the sales start rolling in, can you sustain profitability over time?”
10. Would you be willing to remortgage your house to fund this business idea? The point of this question deals with whether or not you are both serious enough and have enough passion about this business idea that you would be willing, if need be, to “put the family farm at risk”. You most likely will have to take some financial risks when you launch a new business. If you’re not willing to take on that risk, then maybe you’re not cut out for the business you’re thinking about.
In summary, Frank Joseph in his article entitled “How to Find the Perfect New Business Idea” (see the November 7, 2013 issue of Start a Business) puts this question in perspective when he says that “The perfect business idea has to be not only something that a person enjoys, but it also has to be a profitable venture. If a person’s idea cannot make them money, it will not be worth investing time into.”
If it looks like your business idea has potential and you have done your homework, than you are ready for the next step which is to create a business plan. Here’s where SCORE counselors can help you.
