Endless job applications and interview callbacks may seem like the gatekeepers of employment, but that’s not necessarily the case. Entrepreneurship is an option that many people pursue, especially in our expanding freelance and small-business economy. There are pros and cons to working for yourself, and each new venture comes with its own set of challenges. Below, we’ll explore the qualities of a good business idea, how to generate great business ideas, and the pros and cons of being your own boss.
Key elements of a good business idea
There’s no limit to what kind of business you can build for yourself. While the specifics will vary, there are a few consistent key elements to all successful businesses.
Clear demand for a product or service
Supply and demand are the building blocks of all business. Every business idea should have hard and clear evidence of demand in your market or field. You can gauge market demand in a few ways. Marketing and outreach software can get your idea in front of your desired audience, or you could get in touch with them using interest surveys or open forums. The better you know your audience, the better your likelihood of success; consider the fact that 14% of startups fail by not regarding customers’ needs.
Short and long-term goals
Having a detailed plan is crucial to making any entrepreneurial endeavor successful. Your long-term plans and your short-term plans should work together to keep you on track. Setting SMART goals in the short term will set you up for success in the long term.
Room for growth
Don’t be afraid to alter part—or all—of your idea based on new information or experience. Sometimes change is necessary. It’s important to keep up with the current market and be willing to adapt to unanticipated feedback from your customer base. Being flexible and open-minded can mean the difference between having your idea remain an idea or getting it out in the world. Remember, you can always circle back after you’ve established yourself.
The right amount of motivation
Your business idea doesn’t necessarily have to be based on doing something that you love—though that helps—but it should be based on something you’re motivated to pursue. Whether you’re working to serve a cause or community that’s important to you, honing a skill set, or helping others do the same, motivation can help keep you inspired during challenging times.
How to generate business ideas
Generating business ideas is one of the most important steps for any entrepreneur. If you don't have any good ideas, it's going to be tough to get your business off the ground.
In this blog post, we will teach you how to generate business ideas that will help you achieve success. We will also provide some tips on how to make sure your idea is a viable one.
1. Ask family and friends
The first place any entrepreneur should look when coming up with new business ideas is their own network of family and friends. After all, these are the people who know you best and will be most likely to support your new venture.
By asking those closest to you for ideas, you'll not only get some great suggestions, but you'll also get an idea of what kind of business would be a good fit for your skills.
Your friends and family will also have very different perspectives than you. They have their situations they deal with every day that you may not have thought of.
2. Consider problems in your everyday life - then solve them!
The best business ideas come from solving problems that you or others face every day. If there's something in your life that frustrates you, chances are there are plenty of other people who feel the same way.
Come up with a list of different problems you face going about your day. Once you have a list of about 10 different problems, try to brainstorm 1 to 3 different solutions that don't exist yet.
By identifying these pain points and coming up with a solution, you'll be well on your way to starting a successful business.
3. Build on your hobbies
You're not going to get many business ideas for rocket engineering if you've never even built a model rocket before.
This is why it's important to look at your hobbies and interests when trying to come up with a business idea. It's much easier (and more enjoyable) to build a business around something you're passionate about.
If you love hiking, for example, you could start a hiking gear rental company or a hiking tour company. If you're into cars, you could start a car detailing business or a classic car restoration business.
Whichever option you choose, you'll end up following the journey till its end because you care more about the outcome.
4. Consider if there are tasks you could make easier
The problem many entrepreneurs run into when thinking of a new business idea is trying to create the next biggest thing. But sometimes the best business ideas are those that solve a more mundane problem.
A great way to come up with new business ideas is to think about ways you could make existing tasks easier or more efficient.
For example, let's say you're a real estate agent. You could come up with a service that helps people find their dream home by doing all the research for them.
You could also start a business that helps people stage their homes for sale or that provides virtual tours of properties.
By thinking about ways to make everyday tasks easier, you'll be able to come up with plenty of new business ideas that have the potential to be successful without all the mental effort.
5. Build on existing products or services
If you're struggling to come up with new ideas for a business, it often helps to build on products or services that already exist. You won't have the pressure of coming up with something completely new, and you can focus on improving upon what's already out there. Research similar businesses; what are they doing well? What could you improve upon?
A great way to do this is by looking at the current services or products you're already using and asking yourself the "What if?" questions. What if this service was available in my city? What if this product was cheaper/better quality/easier to use?
How to create your business
Once you’ve got an idea and know that there’s a demand for it, you can get started on making it a reality. Below are some standard starting points in getting a business up and running.
Research the market
Whatever idea you have, your product or service will be aimed at a specific group of people and/or at meeting specific needs. It’s important to research the market you plan to serve. The results of that research will be the foundation of your customer service philosophy. Decide how you’re going to serve your customers, through what channels, and what is easiest or most accessible for your client base. Market research is also important to get an accurate read on the real problems, hardships, or difficulties your prospective customers face.
Fulfill a need
Once you’ve found your market and done some research, it’s time to identify a specific need you plan to address. For example, entrepreneur Sara Blakely, the creator of Spanx, identified a need for shapewear that was discreet and comfortable. She filled that need with Spanx. After you’ve identified the needs of your market, you can start to create something concrete that can answer those needs.
Survey your customer base
Another helpful step in the creative process is to get out and directly address your potential customer base. You can do this with an email campaign, an open forum, or an online survey. This can help you market more effectively and help grow your business by building connections and uncovering further market needs. See how Mailchimp's free online survey maker compares to the competition.
Build a budget
Make sure you consider all potential costs when creating your business budget. There are a lot of resources that can help you do things for free or at a reduced cost, like website building or product page design. But there are some things you just can’t DIY. Startup business costs can include:
- Product production/manufacturing
- Store or office rental
- Promotional materials
- Storage or production space rental
- Interior design
It can be easy to underestimate the cost of starting a business if you’ve never done it before. If you’re feeling overwhelmed by the what-ifs, hire a financial adviser who can help you build and maintain a flexible budget.
Find investors if necessary
After you’ve established your budget, you can determine whether acquiring investors will be a helpful or feasible option for you. Investors can be a great resource for getting a new business financially established. However, they can also mean sacrificing some creative control. If you are going to pursue investors, you’ll want to learn how to prepare a pitch deck.
It’s important to remember that business ideas are rarely perfect from the get-go. Be open to adjusting your plan, budget, and ideas as needs arise. Try to avoid major last-minute changes, however, because they can have effects down the line.
Deadlines can be a useful tool and can help keep your goals on track. With firm deadlines, you can help yourself maintain boundaries, recognize what is plausible and implausible for you, set detail-oriented goals, and measure your success.
Pros and cons of entrepreneurship
Entrepreneurship can be rewarding, creatively fulfilling, and a great alternative to a traditional 9-to-5. However, it’s not easy to start and maintain a small business.
There are some incredible benefits for starting your own business or becoming a freelancer, including:
- Being your own boss
- Finding untapped niches in a market
- Becoming an innovator
- Reaping financial payoffs
- Being creatively fulfilled
But along with the benefits, there are some drawbacks that new and seasoned small business owners alike can experience.
- Uncertainty about the future
- Financial ups and downs
- Skewed work-life balance
- Limited support and resources
Set yourself up for success with your new business idea
Generating a business idea, completing your research, and seeing it through the creation process can be a difficult but ultimately rewarding choice. If you’re motivated, organized, and goal-oriented, then running your own business might be the right career move for you. Consider tools that can help you reach your desired business heights, like Mailchimp, and put your venture on the path to success.