Hello friends and welcome to Instanters.
Today, we'll explore steps for generating and validating business ideas that have the potential for high patronage and great business success.
Reports have shown that not all business ideas that come to
one’s mind are worth pursuing. What's more, some business ideas have a relatively
high potential for implementation than others.
So what is an excellent business idea? How do you generate a
good business idea? And once you have an idea, how do you know if it's a good
one?
Identify a problem and solve it
One of the most common ways to generate a business idea is to identify a problem that people are having and then create a solution for it. This is the basic principle behind many successful startups.
For example,
Airbnb was founded because the founders couldn't afford the high hotel prices
in San Francisco during a conference, so they rented out their living room to
other conference attendees. This led to the idea of Airbnb, a platform that
allows people to rent out their homes or apartments to travelers.
To identify a problem, think about the things that frustrate
you or the people around you daily. Ask yourself: What are some things that
people wish they had but don't? What are some common complaints people have
about existing products or services? What are your potential
customers complaining about? Once you have identified a problem, think about
how you can solve it.
Another easy but great way to discover a business idea is to observe what you spend on every day. What is that thing that takes money out of your pocket? You unavoidably have to spend on internet subscription, tuition fees for your kids or dependents, transport fare, groceries, food (meals), some cookies, vegetables, fruits, wears, household tools, and kitchen utensils, to mention but a few. How can you pick a niche or sub-niche from what you spend on and carve a purpose out to create new products or services?
Do you realize the producers of these items were once in your shoe thinking about what to offer the world around them to make life easier? Yes, they went through the same challenge at one point in the past.
But the difference between you and them is that they identified a problem, offered a solution, and monetized the solution. That is why you think of how much you have to spend whenever you needed such items.
They basically offered a solution to your problem and take
some cash in return. Begin to look at how you can fashion out a product or
service that proffers a solution to a problem and take some cash returns.
Therefore, successful businesses are borne out of deep consumer insights. If you can look deeply into what consumers of that proposed product or service will want solutions for, then you can tailor your product or service to meet that need.
A common problem with new entrepreneurs is that they are looking for what to sell rather than what to solve. Without a solution coming out of that product or service,
there is a lower chance of sales and success. The bottom
line to making a successful business will therefore be to look for what to
solve before looking for what to sell.
Use your skills and expertise
Another way to generate a business idea is to use your skills and expertise. If you have a particular talent or skill set, think about how you can turn that into a profitable business.
For example, if you are a
skilled photographer, you could start a photography business. Under this niche,
there are several ways to turn your skill into a business. You can generate
epic pictures of mountains, cars, trees, landscapes, buildings, etc. You can
sell such images on several platforms online and make good business from that.
If you are a graphic designer, you could start a design agency. If you are a
programmer, you could start a software company or you can train new students in
coding skills. If you are multi-lingual, oh my God, you can turn that to an enterprise also through offering online teaching and courses or a translation agency.
When using your skills and expertise to generate a business idea, it's important to consider the market demand for your product or service. A major problem is to have a particular skill but not utilize it by monetizing it.
What skills do you possess? Who needs your skills and expertise? Is there a demand for your particular
skill set? Are there other businesses in your industry that are successful? Do
you have a unique selling proposition that sets you apart from the competition?
In this digital world where we found ourselves luckily, there has never been a skill that cannot be monetized. Long ago, movie producers, television stations, and channels often require a video editor, a graphic designer, and related skilled workers.
Right now, freelancing has made
offering such services possible and proliferated without a need for affiliation
to TV channels and organizations. Thanks to YouTube which made learning such
skills accessible at no cost. If you are wondering how to turn your skills into
a means of living, you have all resources and tools around you.
Tap into your passions and interests
Another way to generate a business idea is to tap into your
passions and interests. What you are good at could, again, be transformed into
what you earn your daily living from. What are you passionate about? What are
your hobbies? What do you enjoy doing seamlessly? What do you like to do in
your free time? By turning your passions and interests into a business, you can
create a business that you love and that aligns with your values
Once you identify a passion you can monetize, you need to make the next step happen. When tapping into your passions and interests, it's important to research the market demand for your product or service. Are there other businesses in your industry that are successful? Is there a demand for your particular product or service? Are there any gaps in the market that you can fill?
Utilize opportunities
Opportunities are situations that help us get things done with lesser efforts and resources than are normally required. With access to the internet and mobile technologies, the opportunities available are innumerable. Leverage on the power of the internet and social media if you want to reach more audience. A lot of skills, passion, and knowledge could have rotten if not for the internet revolution.
Conduct market research
Now your planned business idea looks testable. But do you have a large enough audience for your product or service? Is your solution going to attract wide acceptance from your planned audience? You should be able to answer this question in a short while. Market research is about understanding and profiling your potential consumers.
If you take
ample time to understand your audience, you can meet their expectations. The characteristics
of your potential consumers in terms of size, demographics, consumption pattern,
spending behaviour, and your relative location to your potential customers,
which in turn determines your sphere of influence, are the crux of any new business.
Identifying a good problem is one thing. Being aware of the audience’s need and willingness to buy your product and service is another thing. From the outside, it almost always seems to look like your new product or service will be demanded viably.
But production and sales do not always go
as planned. What you see is not usually what is happening. How do you then
reassure your enterprise of good sales? That is where market research comes in.
Once you have generated a business idea, it's important to validate it by conducting market research. This will help you determine if there is a demand for your product or service, who your target audience is, and what your competition looks like. A lot of times business failure occurs not just because of what you did not see coming – the unpredictable events – but also because of what you chose to ignore.
Further, it is more likely your potential customers are
existing customers of another business enterprise. If you don’t conduct your
market research and identify gaps in the existing product or service delivery trends
in your niche that you need to fill, even if your idea is genuine, other competitors may still define
the industry, leaving you with no other choice than failure.
To conduct market research, start by identifying your target
audience. Who are the people who would be interested in your product or
service? Once you have identified your target audience, survey them to get
their feedback on your business idea. Ask them if they would use your product
or service, how much they would be willing to pay for it, and what features
they would like to see.
In addition to surveying your target audience, research your
competition. Who are your competitors? What are their strengths and weaknesses?
What do their customers like and dislike about their products or services? Use
this information to identify gaps in the market that you can fill.
Create a minimum viable product
Once you have conducted market research and validated your
business idea, it's time to create something called a minimum viable product
(MVP). An MVP is a basic version of your product or service that you can use to
test the marketability and get feedback from your potential customers.
The goal of an MVP is to create a product or service that solves a
problem for your target audience in the most basic form. By being basic, we
mean creating a prototype and showing it to potential customers, asking
questions such as how much they may be willing to pay, and pitching your
product’s or service’s uniqueness in the process. This allows you to test your
idea without investing too much time or money into a full-fledged product or
service.
To create
an MVP, start by identifying the core features of your product or service. What
are the absolute must-haves? What are the likely product or service expectations
of your potential consumers? Once you have identified these features, build a
simple version of your product or service that includes only these features.
For
example, if you are creating a new software program, your MVP might include
only the core functionality and a basic user interface. You may need to test the software with users and get feedback on how it works or if one or two
things need to be changed. When you tactically run such tests on your product
or service, you are saving a lot of resources that could go down the drain if
the product or service is not welcome at the moment of introduction to
potential customers.
Thus,
always test a proposed product or service with a handful of your target
audience. This can be done through user testing or by offering a limited
version of your product or service for free. Use the feedback you receive to
refine your idea and improve your product or service.
Consider your
business model
Assuming
you can identify a good problem to solve, with a promising target audience, the
next thing to do is to plan your income stream(s). This is the stage where you
plug in everything you have put together up to this stage into a more objective
picture. Now you are thinking of your budget, product or service production and
delivery costs, and monetary returns.
As you
are developing your business idea, it's important to consider your business
model. How will you make money? Will you charge a one-time fee or a
subscription fee, or will you generate revenue through advertising? What are
the costs associated with your business, and how will you cover these costs? Will
you create the same product or service across different target customer
categories? Are you planning to market your product or service by a third-party
agency or by yourself?
Consider
the pricing strategy you will use for your product or service. Is it priced
competitively compared to similar products or services in the market? Will it
be affordable for your target audience?
Seek advice
Finally,
seek advice from others as you develop your business idea. This can include
mentors, business coaches, and other entrepreneurs. Ask for their feedback on
your idea and listen to their suggestions. They may be able to offer insights
or solutions that you hadn't considered.
Networking
events and industry conferences can also be great places to meet other entrepreneurs
and get feedback on your idea. You can also join online communities and forums
where you can connect with other entrepreneurs and get their feedback.
To round
up, generating and validating a good business idea is critical to the success
of your business. By identifying a problem and creating a solution for it,
using your skills and expertise, tapping into your passions and interests,
conducting market research, creating an MVP, considering your business model,
and seeking advice from others, you can develop an excellent business idea that
has the potential for viability and profitability. Remember, the most important
thing is to keep testing and refining your idea until you find a product or
service that meets the needs of your target audience.
Good luck!
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