Almost anyone can have a good idea. But, a good idea only turns into a business opportunity if you can think of a way to give it commercial potential – that is, to make money by selling it.
But, just because an idea has commercial potential doesn’t mean it’s worth pursuing. For example, Bic (the manufacturers of disposal razors and cheap pens) once manufactured disposable underwear a product that didn’t catch on, and Colgate (the toothpaste manufacturer) once tried selling ready meals – an idea that certainly didn’t go down well with the target audience.
So, how do you know which business opportunities are worth pursuing? Here’s a brief guide to getting it right so that you don’t pour your time or money down the drain:
Check there’s a demand
The first thing to do is determine whether or not there’s an appetite for your idea: just because you like the idea of using a particular product or service, doesn’t mean you have a customer base that will feel the same way. Carry out extensive market research to see what people are looking for, and if you find that businesses are already fulfilling that need (something that’s likely to happen), consider what you can offer that’s slightly different – or failing that, better. Carrying out a SWOT analysis (where you evaluate your strengths, weakness, opportunities and threats) can help you to do this.
Can you market it?
If you’re confident there’s a market demand for your business opportunity, keep researching to see if your target audience can actually afford your product or service. If you plan to sell to a local market you may find this easier to establish. But if you’re thinking of venturing abroad to do business, you may need some assistance from third parties or government bodies to see if you can learn more about your potential customers.
And, think about how you can reach your customers: where do they currently shop? How much disposable income do they have, and how much do they typically spend with your competitors per transaction? The key thing to do is here to ensure your idea can be priced in a way that actually enables you to make a profit, and be sold to a large enough audience – without this, you don’t have a viable business opportunity.
Can you get it off the ground?
Once your happy that there’s demand for your idea, and that it can be a profitable one, you need to think about how you’re going to fund it you. You may need to seek external investment, but you may also be able to support yourself by drawing on your income or savings to get the wheels in motion.
As well as thinking about how you can inject your business with cash, be sure to consider how you can inject it with time – it’s likely your idea is going to require you put in lots of hours if it’s going to become a viable business opportunity, so be prepared to pull some late nights and early mornings if you’re still employed, or draw yourself a worse-case scenario for the duration you can afford to live without an income - if you’re going to pursue an idea without a regular paycheque.
There are many other things to consider when it comes to exploring businesses opportunities (and getting it right), but these three steps are certainly a good place to start.