Are you struggling to find profitable business ideas?
If this is you, then don’t panic, because in this article we’ll be going through the ideation process.
At first, I thought ideation was just a fancy marketing word for ‘having ideas’. It turns out the word is older than I thought – apparently originating in the early 19th century as a combination word, of “idea” and “creation”.
The objective of ideation is to think creatively about your skills, experience and business goals and from this, develop a large number of ideas. You can then filter these down into the most practical business ideas to pursue.
How to come up with a business idea
First off – it’s important to remember that you don’t have to come up with the most original business idea in the world. Instead, look at ideas that play to your skills. Ideally, you should also choose something that you are interested in, and already have the core skills to get into the business without intensive training.
The idea that you choose may be something that already exists. But that’s ok, there are always things you can do to make your business stand out from your competitors.
We’ll be going through topics like market research and product requirements in the coming weeks. But today, I’m going to focus on the ideation process to help you structure your search for ideas. I’ve split this process up into the following steps:
- Look at your own skills and experience
- Look at common startup ideas that are simple to start
- Look at problems that you can solve – are there any gaps in the market that you can fill?
Finally, we’ll look at how to assess if your business idea is a good one.
Step 1) Look at your own skills and experience
Many people struggle to list their skills and experience. Some things just don’t seem relevant, but it’s worth listing everything. You probably have more to offer than you think.
You might not know it, but throughout your life and career you’ve developed a lot of skills and absorbed a wealth of knowledge. Even if you are early in your career, I’ll bet there are things you know that are actually quite specialist.
If this is the very first step in your career then don’t worry, focus on what you are already good at from hobbies, your education and personal activities.
Many of the skills you have will be relevant and could be applied to a potential business. It’s worth writing them all down as this will help you to determine the type of business that you want to start.
I’ll show you what I mean! I’m still pretty early in my career – but I’ve learned a thing or two.
Project management, copywriting, web design, and digital illustrations are just a few of my skills.
Now let’s look at my hobbies. Outside of work I’m interested in role-playing games, concert photography, and creative writing.
It’s also worth making a separate list of things that you have less experience in. This will highlight the skills that you may need to focus on improving when setting up your business.
Although I don’t have a financial background I found that Brixx allowed me to create forecasts without much knowledge on the subject.
If there’s a skill you need to learn for your business in order to succeed, there’s probably an app out there that makes it easy.
You can find out more about Brixx software by signing up for a Free 7 Day Trial.
Turning your skills into a business idea
Let’s look at how I can take my skills and use them to generate a business idea. When doing this, try and generate as many ideas as possible. Write down all the possible options, even the bad ones.
Here are a couple of examples from my own experience:
- I could start a freelance copywriting service
- I could form a content marketing company
- I could pursue my passion for music journalism
- I could offer my services as a proof-reader
- I could start a bid writing business
- I could start a social media management company
- I could offer a logo design service
- I could start an online course to teach others my skills
- I could become a freelance UI designer
- I could illustrate books
- I could sell T-shirts featuring my designs
- I could become a freelance artist
Write down every business idea you can think of related to each of your skills. It doesn’t matter whether these ideas are good or bad, jot them down. What you’re after at this stage is inspiration – and a great way to find this is to explore the kinds of businesses that are related to your existing skills and knowledge.
Step 2) Identify common startup business ideas
Another way to find ideas is to look at what works for other entrepreneurs by exploring the common businesses that people are starting in your area of interest.
This exercise is a good indicator of what the easiest businesses to start are because so many people are already doing it. Here are some examples of businesses that you can start for under £10k.
If you like the look of any of these businesses the next step is to match up these common business ideas to the skills that you have previously listed. This will help you to determine if any of these businesses are a good fit for you.
Step 3) Is there a gap in the market?
Businesses exist to solve people’s problems.
So, what problems could your business solve? Is there a gap in the market?
Write a list about people’s day to day frustrations and the ways you could solve these problems.
As previously mentioned, you don’t have to have a groundbreaking idea, your business just has to solve issues that customers are facing on a day-to-day basis.
How to determine if your ideas are good business ideas
Hopefully, by now, you have generated several business ideas that you like the look of. You may be thinking that now would be a good time to start on your business plan, right? Well, writing a business plan takes a lot of time and effort and because of this, it’s recommended that you spend some time exploring whether your business idea is feasible.
There are two ways to evaluate your ideas:
- Seeking feedback on your ideas
- Researching whether the business will be profitable
If there are people that you trust won’t steal your ideas (yes, this can happen!) then I would recommend bouncing your ideas off them.
Gaining feedback from other people provides you with the opportunity to look at your business from a different perspective which may validate your idea.
You’ll need to develop a thick skin – as not all the feedback that you receive on your idea will be positive.
Even if this is the case, don’t be put off.
Not everyone is going to like your idea, and negative feedback is still useful (even if it’s not constructive), but remember that you should be the only one to decide if you take on this business venture.
Is your business idea profitable?
This is the ultimate question. A business has to make money in order to survive. The answer to this question will determine the fate of your business idea – whether you work on it part-time, full-time, or don’t work on it at all.
You should consider:
- How much you’ll be charging for your products or services?
- How many sales you could physically make in a month (and what limits this?)
- How much will the business cost to run?
- How much do you need the business to pay you as a salary/dividend for you to lead the life you want to lead?
You don’t have to decide your pricing model right now (more on this in Week 4’s articles), but it’s good to think about price ranges as this will have an impact on the way you market yourself.
Start getting some ideas together about what your business will sell, and who it might be selling to. Are you going to be selling luxury goods such as lavish decorations or designer handbags? Or, are you going to be selling low-priced items like coffee or household supplies?
When you start to get some solid figures around your expected business costs and pricing you’ll be able to determine how much you have to sell to make a profit.
Total up the amount you expect to spend in an average month on business expenses, and then total up the revenue you forecast you can make in a month. The business’ revenue minus its expenses equal profit. Don’t forget, you need to pay yourself somewhere in this equation, as well as making the business viable on its own.
Deciding which business to start
Investing your time and money into a business is a big decision! This makes finding the right idea for you really important.
It’s worth not only looking at whether your business ideas are financially feasible, but also at whether they offer the right balance of risks and rewards for you as an entrepreneur. If you haven’t read it already, head over to this week’s other topic ‘What are the risks and rewards of starting your own business?’.
Ideally, you should come out of this week’s articles with a shortlist of a few ideas to take forward to the next stage – some detailed market research! We’ll be covering this topic in-depth, next week.