There's no doubt that successful businesses start with brilliant ideas. After all, in today's fiercely competitive environment, innovation is the ammunition entrepreneurs need to stand out in the crowd.
Many newcomers to the business world may assume that starting a new business is necessarily linked to an invention. And although this may play an important part in some pioneering companies, most business concepts are in fact all about tweaking existing ideas—or finding new ways to do old things.
For example, a company selling a Web-based customer service monitoring tool is simply improving on the long-accepted premise that successful businesses have to keep an eye on their customers' needs.
However, finding the right niche, based on what you do best and the potential market situation, demands both careful planning and research. Even the best products may not necessarily find buyers because markets change and customers are fickle.
There are no clear recipes for starting a new business, but here are a few guidelines that can help you get going in the right direction.
Look for windows of opportunity
Astute observation is your best ally when looking for unique ideas. Start by assessing exactly what you do well. It's a much safer bet to venture into familiar territory where you can use your existing strengths. For example, if you work in the pharmaceutical industry then you could branch out into health care.
Here are some helpful hints:
- Do what you're passionate about. Enthusiasm ignites the interest of lenders. Choose ideas that enable you to act now. You need to move swiftly before your idea fizzles.
- Be specific about your business goals. For example, you want to reach this specific market with a specific product.
- Look around you for windows of opportunity such as taking over a family business.
- Start a business doing something that your existing company isn't doing.
- Keep your eye on the franchise market.
- Read business publications and stay informed of growth areas. For example, the rapidly changing health sector, fueled by the explosion of biotechnology, provides endless business opportunities.
Find your market niche
The potential success of a product or service involves a myriad of factors, including the design, features, potential profit margin and sales volume projections.
Apart from patenting inventions, you can assess these possibilities for product development.
- New product lines that are absolutely new to the market and enable you to create your own niche, revolutionize or create markets.
- Product revisions/replacements that enable you to build on your existing product line.
- Repositioned products, that uncover new applications for your products or new customers for current products.
- Products that copy those produced by others, but where there is a market for many competing versions.
Use the following quick checklist when defining your market niche.
- What are the needs of your prospective customers? Ask yourself: How will your business meet those needs? Identify unmet needs.
- What are your customer's desires? A market need could also be a deficiency, for example, a product that lacks post-sales service.
- What problems does your product or service solve? Does it make your customer's life simpler?
It’s important to define your ideal customers clearly.
- Who exactly are my target customers?
- Why do my customers buy?
- How do my customers define value?
- What makes my product or service superior to that of my competitors?
- Why do my prospective customers buy from my competitors?
- How can I offset that perception and get my competitors’ customers to buy from me?
Present your idea with a strong business plan
Take your creative thinking and put it on paper. A business plan is your tool to sell your idea to lenders, investors and existing shareholders. Lack of clarity, poor information, and the absence of a strategic orientation are the main deficiencies in most business plans.
Make sure you allow time to put a plan together with all the appropriate details, such as positioning, market analysis and financials. Projects developed with the help of an expert in the target market get the best reception.
Get yourself a mentor
Getting a business off the ground is not an easy task. Many projects never amount to much because they are not taken seriously, or because they lack adequate follow-up or support.
You will increase your chances of success considerably by seeking advice from someone with business experience, often called a mentor. These business leaders provide management advice, suggest sources of financing, and frequently offer their young protégés internship opportunities to hone leadership qualities in the field.
Futurpreneur Canada and many chambers of commerce have mentoring programs designed to facilitate contacts between business leaders and budding entrepreneurs. Local economic development centres and some business leaders' associations offer similar programs.