Creating an Awesome Business Idea
Starting A New Business: The Ultimate Guide
Chapter 2: Creating an Awesome Business Idea
Table of Contents
Creating An Awesome Business Idea
Let’s just get it out of the way. Most businesses fail. In fact, it’s estimated that 70% of businesses fail within the first 10 years.
The stats don’t get any prettier when you look at it for shorter time spans either. 20% of small businesses fail in the first year, 50% go belly up after five years.
Why are we explaining this? It’s certainly not to put you off. It is intended to get you thinking about how the quality of your business idea is an important factor in whether or not your business is one of the 3 in 10 that has any form of longevity.
There are recognised factors in why a business may fail, ranging from:
- not having a sufficient focus on customer service
- cash flow issues
- the absence of the right people in the right positions
- the business plan being insufficient for the vision of the owners
- not enough innovation
- a lack of flexibility for the business model (very common) through to owners making themselves a single point of failure, ending in the business being unable to scale
However, even if you have the best business plan, and the capital to employ the best staff and provide the best service, if your value proposition is lousy, then you are destined for the 7 in 10 club.
Where business ideas come from, varies. You might be fortunate enough to have a lightbulb moment that gives you a clear idea as to what business to start, but in the absence of that, there are some tried and tested methodologies you can use:
What Makes You Mad?
The world is made better by people solving problems that other folk didn’t recognise existed. The past was rubbish, but don’t worry, not just your past and my past, everyone’s past.
My children frequently ask me what it was really like before Spotify. You don’t know how lame things used to be until you have to spell it out in granular detail. -If there was a song you liked, you hope it came on the radio. If you were quick you could put a blank cassette (look it up) in the tape recorder (look that up) and record it playing on the radio. If you were super lucky, the DJ wouldn’t talk too much over the start and end of the song. They always did. And if you wanted to play that single any time you liked, well that was a case of hoping someone would drive you to the nearest town on a Saturday so you could buy it from Woolworths or Our Price (again, look it up.) And if the single you just spent all your money on got scratched the following day and wouldn’t play? Tough, that’s just how it is.
Now, if my smart speaker plays the wrong song when I call it out from any sedentary position of my choosing, I get mad.
The point is that innovation happens when people stop to think about the world as a series of problems that need solving.
So tap into your hidden, passive, daily rage about what doesn’t work for you. Something that you currently take for granted as being the status quo, and think about how you can make it better.
You don’t need to be the next multi-national, billion pound unicorn to do this and you probably don’t have the seed capital anyway. So look around at the smaller things – why does that delivery take so long? Why are they the only options to purchase? Why don’t they communicate that better? What makes that design so bad? Why do they use so much jargon?
Start getting mad, seeing problems and asking how it can be done better. There’s a million business ideas waiting to be brought into reality this way. And if you see something being resolved that you had already thought of…. It might make you madder.
What Are You Passionate About?
There’s an old expression that if you love what you’re doing, then it’ll never truly be work.
Think about all the things in life you do, not because there is a likely financial reward at the end of it, but because you get some deeper satisfaction from it.
You might find that it’s easier to build a lifestyle business around a hobby or a passion, than to create a substantial organisation you can exit from one day, but both are possibilities.
For instance, the keen animal lover and walker who combines these interests to open her own dog walking business.
The fitness fanatic who becomes a personal trainer and exercise coach. These are solid ideas that may deliver you an income, but won’t likely scale. So start with what you’re looking for – is it something that gives you a bit of personal freedom and a living salary? If so, then a simple lifestyle business may do the trick for you. If you’re looking for something more, then ask yourself if it scales well.
There are some cracking examples of hobbies blossoming into big business – K’Nex – the lego type construction pieces were created by a guy at a wedding who wasn’t keen on socialising and found himself building things out of napkins.
Levi Roots famously secured investment for his Jamaican sauces that he’d created out of a passion for cooking. They are now available in most UK supermarkets. Not bad for a home cooking hobby.
Further to reflecting on your specific passions is to understand how your mindset towards these passions could help you create a new business idea. If you’re into cooking, perhaps you bring creativity and a focus on food. The dog walking business taps into a willingness for above average physical activity.
Understanding the mindset you have towards your everyday passions can help you create business ideas with no money or at best, business ideas with little investment.
Solution Transfer
You’ll be more successful if you can shape your business idea towards what you really want. Remember your business is just a means to an end. Are you looking for business ideas to start from home, or business ideas to make millions? Does it need to be a business idea without investment, or can it be a business idea with 50k?
It can be helpful to point your brain towards the rules of engagement, your real life constraints and what you really want to achieve.
There are a plethora of stories of wanna-be entrepreneurs who see something on the TV, such as Deliveroo and say they had the idea first 10 years ago. Ideas are great, potential is great, but if it’s not matched by the ability and resources to deliver on them they don’t count for much. In fact, they don’t count for anything.
Now you have told your brain the realistic resources you can muster, and the desired end state of your business, start by looking at first class solutions you see elsewhere, to see if you can replicate them for yourself.
The internet is a great source for this. Think about all the crazes that sweep through teenage children, going back to the 1980’s there were yo-yo’s, fidget cubes have been a craze, loom bands were incredibly popular. These fads don’t launch globally all at the same time. If you have the capital and confidence, you can spot trends elsewhere and bring them to market before anyone else.
If you are trying to find a business idea with no money, then ask yourself when was the last time you received first class service, what made it so, and how you could incorporate it into your own offering.
The world is full of solutions that transfer perfectly into new markets and new opportunities. You don’t need to reinvent the wheel for your business idea. Standing on the shoulders of giants is a great place to start.
The SSI Formula
You already know that you need to solve problems in order to create a winning business idea. There’s a process you can use to create business ideas of the future. The best business ideas and opportunities are the ones that address peoples’ needs, make their lives easier and solve their problems.
The SSI formula is a process you can use to structure your thinking. The idea is simple enough – business ideas that solve problems can be broken down into 3 categories:
- Save
- Solve
- Improve
Remember those 3 simple words, as you can use them to improve your ability to spot unique business opportunities. You can do one of those 3 things when you are solving a problem for someone.
Think about your own experiences. Take a product you love. Like your IPhone! What do you love about it? You get to talk to your cousin in Australia? Awesome! It IMPROVES your ability to stay in touch with family members. It stores all your contact phone numbers! Brilliant! It SAVES you having to write them down. It gives you quick access to google? Smashing, it SOLVES an unlimited number of questions you want answers to on a daily basis.
You’ll find that almost every product or service you love is either saving, solving or improving something in your life.
Let’s break them down into more detail.
What can you save for people?
- Save them money
- Save them time
- Save them paperwork
What can you improve?
- Workflows
- Processes
- Speed that things get done
What can you solve?
- Problems that can’t be overcome without your business idea
- Bottlenecks in how people do things currently
You’ll find that the best business ideas are the ones that address needs by saving, solving and improving things all in one go.
Ask yourself how your business idea achieves these.
Research Your Business Idea
Once you’ve got a number of ideas for your business, you need to research them to see how viable they are. Don’t be deterred if you discover that other people are already doing something similar to your idea. Whilst it can be exciting to feel you’ve come up with a truly original idea, and that you’ve spotted a gap in the market, if no one else is already doing it, it begs the question ‘is there a market in the gap?’
Your friends and family are going to play a huge role in supporting you on your business journey. You might turn to them for moral support in order to keep you going in the difficult times. You should not turn to them for an objective view of the quality of your business idea. Why? Because they love you, don’t want to upset you, want you to succeed and ultimately are too biased to give an unvarnished opinion. E.g. My wife is editing this right now. She says it’s ok.
Data Is Your Friend
You can test all business ideas, even business ideas you can start with no money, by using search tools to assess potential search traffic and by proxy demand. Google provides keyword analysis tools that you can access at zero cost and they can provide an insight into what your potential customers might be looking for.
It’s worth pointing out though, that for most businesses, unless you have solid startup capital, it’s going to be a while before you see significant results through organic search traffic. This means you might need to focus on paid search, or having a presence for local search traffic if your business has a physical presence in a community.
Google offers other tools too, such as the ability to create surveys that get filled in by people in your target demographic. Gaining statistical feedback about what potential customers may or may not like, is an excellent way to impartially understand the level of possible demand.
Competitors Are A Great Source Of Market Research
Before you go to market with your new business, get a list together of all the potential competitors in your market.
How do they position themselves? Are they bargain basement, or the height of luxury? Is there a range of offerings on a spectrum?
Try and create a list that shows pricing, value proposition, unique selling points, social presence, routes to market and brand positioning.
You can even make a grid of competitors, broken down into the areas suggested above, include what they do and give them a rating between 1-10 for how well they do in each of these areas.
Once you’ve turned your competitor research into a data set, you’ll be well equipped to assess where the gaps are. It’s the gaps in your competitor research where unique selling points exist.
Your market research is intended to help you:
- Assess the viability of your idea
- Identify your unique selling point
- Create a buyer persona
- Set pricing and business model
If you analyse your competitors well, you’ll begin to be able to answer all 4 of the items above.
Key Takeaways
- Recognise early that lots of businesses fail. Don’t let this put you off! Instead, use it as your motivation to plan properly.
- Think about what makes you mad and use this as a way of finding business ideas.
- See the world as a series of problems that need solving.
- Tap into what you are passionate about and see if you can use those skills in your business.
- Focus on how you can save, solve or improve people’s problems.
- Use free tools from google to assess the potential demand for your business.
- Do not rely on friends and family for objective feedback for your business idea.
- Compare your offering against competitors to find gaps in the market.
- Identify what you unique selling points will be.
- Document your ideas using our downloadable template.
