If you want to generate business ideas you should think about learning how to:
- Understand the main sources of ideas for new business start-ups
- Understand and explain how entrepreneurs identify and attempt to exploit a market niche
In order to generate a new business idea, an entrepreneur might base his/her decision on his/her own experience. This means on a product or service he/she is familiar with either through a previous job or through a hobby or interest.
But there is another way. The realisation that there is an unmet need after a brain storming session where possible ideas are considered.
Which approach is best? I would suggest, both are good. Combined, I mean.
Let´s see pros and cons.
First about knowing a product or service.
Pros.
1- You would have a good knowledge of the features of the product.
2- You may have a passion or interest for that line of work, so your drive might help you to succeed.
3- Maybe you have good contacts on that established market.
4- Do you have a good reputation in that industry? You can use that.
Cons.
a- Maybe there´s no room for another competitor.
b- What if you are the ONLY human being sharing that passion in your market?
c- Out of love for your idea you could be overestimating the size of the potential market
d- You may know the market and the product/service, but you may not possess the other skills needed for successful entrepreneurship.
Second is spotting a gap in the market.
Pros.
1- Focusing on the customer´s needs might improve your chances of success.
2- The benefits of being first in the market.
3- Little or no competition in the early stages when your business is more vulnerable.
4- New ideas are easier to sell sometimes?
Cons.
a- Mistakes. Having little or no expertise in the product/service/market will be challenging.
b- Is the gap only in your mind? How real is it? Has someone tried to exploit it before and discovered that it can´t be done?
c- Competition may enter quickly and capture market share. Your "first mover advantage" may not last long enough.
How can you identify opportunities?
Use business directories and local maps to locate existing competition and identify gaps in the provision.
Use local and national demographic data to establish potential market features.
Do some research on the ground such as questionnaires or interviews.
What other things have helped you to generate good viable business ideas? Please share your comments.
