Coming up with a business idea requires determination, preparation and plenty of testing. More importantly, there’s no one way to find your winning business concept, so you'll need to test and research a number of the best ways to help you find the right one.
If you're keen to start a business but have no idea of what you might sell, or offer as a service, we've put together this article to offer the best techniques to come up with a business idea.
How to come up with a good business idea: 9 ways
01. Brainstorm ideas
When coming up with a business idea, our mind can run in circles and we often feel like we're hitting a wall. When this happens, it's probably a good idea to take a breath and then start brainstorming.
Don't be afraid to think beyond just your own ideas when coming up with a business. You can reach out to friends and family for their ideas too. Stay on top of new technology and business trends to glean inspiration. The same goes for staying alert on social media for great ideas, either because someone else is doing it and you think you can do it better—or because someone else's idea triggers your own creativity and inspires a new idea.
02. Ask yourself, 'What’s next?'
Some of the best business ideas are those that can anticipate a trend, new technologies or change. These ideas often originate from asking “What’s next?,” thus inspiring us to think outside the box and evolve as a result.
Consider the example of Medium, an online publishing platform, which launched in 2012 and remains at the forefront of blogging today. As Alexis Lloyd, VP of product design at Medium, said on Wix’s business podcast "Now What?": “So if you create something now, you want it to be able to be integrated into whatever device or platform comes along down the road…[For example] you had this idea that print media was the winning content mechanism for a very long time and people kept being convinced like, okay, we will just have to figure out which one of these things that are emerging is going to be the next thing.” To sum up, coming up with a business idea means connecting the present with the future.
03. Use your skillset
A business idea might come naturally when you start by evaluating your own skills. For example, if you're crafty, you can decide to sell crafts online. Of, perhaps you can combine your skills with another field that you're interested in. Think: marketing and design, chess and finance or teaching and coding.
Developing a wide range of skill sets can increase your chances of finding the right niche for your next entrepreneurship. You may also want to invest time into learning how to make money with AI to see how you can couple your strengths with the power of modern tech.
04. Improve an existing business
When starting a business, think of a company or entrepreneur you admire and how you can improve upon their idea (e.g., can you find a way for businesses to run themselves?).
“It’s always easier when you’re starting a company to try to improve an existing idea,” says Paul B. Brown, co-author of the 2012 book Just Start. After all, Hersey did not invent the chocolate bar but was a pioneer in producing bite-sized pieces of chocolate, Hershey Kisses, that turned the company into one of the most popular candy brands in the world.
05. Solve a problem
Another way to come up with new business ideas is by assuming the role of a problem solver. From climate change to better internet privacy, there are numerous issues we face today that are obvious—but lack an obvious or simple solution.
For instance, to tackle the world’s reliance on fossil fuels, Tesla CEO Elon Musk aims to direct everyone toward sustainable energy sources instead. Tesla cars are designed to produce less CO2 than fossil fuel cars; the batteries are designed to last longer and then recycled; and the entire Tesla factory workplace is better than the industry average in terms of safety and sustainability, according to the 2019 Impact Report.
Don't forget that part of coming up with a business idea is understanding what type of business model you will need to make it happen. Solving a problem with your idea might make a freemium business model the best choice, or you might choose to opt for something else. Understanding how you'll solve a problem is great, but you'll need to decide how to create the business around it.
06. Build the same, but cheaper
There are some products and services whose core is unshakeable, but the price is too high for most consumers. If you can offer a high-quality alternative for a lower price, then you’re on the way to becoming a great entrepreneur. This is even better if you hit upon the best businesses to start with little money.
For instance, not everyone can afford a Nespresso machine. However, coffee lovers across the globe appreciate a nice caffeine boost in the form of a tasty espresso. Today’s marketplace is filled with an array of coffee machines producing award-winning espresso drinks at more affordable prices.
07. Fulfill a need
People’s physiological needs include food, water, sleep and sex. At this point on the list, you can consider business ideas in response to meeting any of these needs.
While many existing products and services are designed to do just that, it doesn’t mean every potential way to meet a need has been discovered. Take the reusable water bottle industry as an example of the most competitive markets to enter, yet each year, more companies are launching their own versions of bottles. That’s because these businesses are fulfilling an ever-growing hydration need.
08. Get in research mode
The exploratory research phase of coming up with a business idea doesn't happen in any particular order during the process. However, it’s essential to read and research the industry you’re attempting to break into. You can come up with a simple research plan that states the objectives of the research and lists the type of information you’ll need to gather. Be sure to consider the entire product life cycle; very early on, you'll need to create a proof of concept (POC) to accurately test your business idea.
You can start your research or test ideas in a variety of ways:
Surveys: Surveys are a common method of gathering information about a target market. They can be conducted in person, by phone or online. They can be used to gather information about consumer preferences, demographics and/or purchasing habits.
Focus groups: Focus groups are a type of qualitative research in which a small group of people are brought together to discuss a particular topic or product. This method is often used to gather opinions and feedback about a product or service. Try not to use family and friends for these as you'll want unbiased and genuine opinions and reactions to your idea.
Online research: Online research is a popular method of gathering information about a target market. This can include analyzing social media data, searching for industry statistics and trends and using online tools like Google Analytics to track website traffic. You can also use popular SEO tools, like Semrush or Ahrefs to understand more about your competitor's site, including their traffic and keywords.
Competitive analysis: Competitive analysis involves studying the strategies, products and services of competitors to understand the market and identify growth opportunities.
Customer interviews: Customer interviews involve speaking directly with customers to gather information about their needs and preferences. This can be done in person, over the phone or through online surveys. You can also use social media polls to connect with them.
Observation: Observation is a research method in which researchers observe consumers in real-world settings to understand their behavior, emotions and decision-making processes.
Experiment: Experimentation is another form of research, where changes are made in the product or service, and their impact is measured.
Trade shows: Trade shows are events where companies in a specific industry come together to showcase their products and services. Attending trade shows is a good way to gather information about new products and trends in the industry. Similarly, other industry events, including webinars and conferences, are a great way to understand more about your business idea and to connect with like-minded business owners.
Feedback: Don't be afraid to ask for feedback on your business idea, be it a product or service. You can start with friends or family, but also send out amongst potential customers as a free trial, or even to social media influencers. Swap promotion for genuine feedback and then use that to improve on your idea.
09. Invent a new service or product
With so many companies competing in an already crowded marketplace, at the end of the day, you might be left wondering whether there’s anything new to invent.
The truth is that a big part of coming up with a good business idea is identifying a need not being met. There are many creative examples of companies tapping into new market needs within the app world, where each app development staked its claim by selling a service that could “change the world.” From cheaper ride sharing to faster food delivery, Uber and Wolt are among the best mobile business ideas to date.
On the product side, take the example of SPANX founder Sara Blakely who created an original undergarment when she realized she didn’t see anything like SPANX in stores. It was her “aha” moment that revolutionized the underwear industry and today, SPANX can be found in nearly every female household in the U.S.
When coming up with a brand new business idea don't forget to factor in potential scalability. If demand really soars, will you be able to scale your business and production to meet it? Is this an idea that can last beyond an early trend and become a must-have product for potential customers over the long term too?
You will also need to check there are no legal or regulatory blockers to a specific business idea in your state or country. There may be specific laws about where such a business can exist or how specific products are manufactured.
How do you come up with online business ideas?
Coming up with an online business idea involves many of the same steps we've already discussed. You'll just need to think more carefully about the type of idea you can run with that can be sold and marketed online. You'll also need to decide which type of online business.
For example, an eCommerce store is clearly a business idea that happens solely online (explore these eCommerce business ideas to get a better idea of your options in that domain). A pet-walking business, on the other hand, can be marketed and booked online, but obviously, pet-walking has to happen in person.
You can additionally take your preferences into account, such as wanting to make money from home. Business ideas that can be started and run completely online include creating and running online courses, online tutoring, app development and testing, virtual bookkeeping and content creation.
How do you come up with a profitable business idea?
When choosing a business idea, it's important to consider time to profitability. How long will it take you to go from a new business to a profitable business? Some ideas, based on resources, might have a faster route to profitability than others. You'll need to start by calculating the potential profitability of your business idea. Consider the costs of production, marketing and other expenses against the potential market size and price customers are willing to pay.
If faster time to profitability is important to you, scan the market to understand the needs and problems of your potential customers. Look for a gap that your product or service can fill. This will help ensure your business idea has a ready market. If you're in a small town, for instance, perhaps consider a service or idea that doesn't currently exist and which there's growing demand for.
On the other hand, understanding what your business competitors are doing and then using it to improve on what they're doing with your idea, might be a faster way to get to profitability than starting from scratch.
If you're leading with profitability over passion for a specific business idea, consider creating a minimum viable product (MVP) and testing it in the market. The feedback can help refine your idea and make it more market-ready.
For a business to be truly profitable in the long run, it usually needs to be scalable. Consider whether your idea has the potential to reach a large market and whether it can be efficiently expanded as demand grows. In theory, any business idea is scalable, as long as you're able to increase production or service provision in line with demand.