Some entrepreneurs are naturally gifted at coming up with good business ideas, while others struggle with them. Fortunately, this is a skill that can be developed by understanding what it takes for an idea to be considered a good one and with a little practice.
Because, without a good business idea, you will be setting your business downhill, so you might as well not start. One thing that you need to keep in mind is that starting a successful business requires more than just a desire for financial success.
In this guide, we’ll explore steps and considerations to help you generate a good idea that can be turned into a successful business in Africa or any part of the world. We will also explore what makes up a good business idea. Stick with us, let’s make the next 5-7 minutes of your time worthwhile.
How to Come Up With a Good Business Idea
So coming up with a good business idea doesn’t follow a strict set of steps or processes. It’s not necessarily a move from A to B and then to C. But there are approaches that you can take to see if a bulb will light up.
Below are seven time-tested approaches you can take to generate a good idea.
1. Solve a problem
There has always been a notion that successful businesses often emerge from solving existing problems. And that is true. Take a look around you. First, consider the local businesses around you and then move on to the world as a whole. You can see that the businesses that have been successful and stuck around for a long time all exist to solve a problem.
And that is what your business must do—solve an existing problem.
But how do you find such problems to solve?
You can start with challenges in your own life or the lives of those close to you. You can also take it a step further by conducting surveys in real life to identify common problems that people face and come up with viable solutions.
When the world-renowned musician and entrepreneur Rihanna became a mom for the first time, she felt the struggle that breastfeeding mothers faced in feeding their babies while wearing bras. So she developed comfortable maternity bras that make feeding your baby less of a struggle and guess what? She sold out! She turned her problem and that of other breastfeeding mothers into developing a much-needed product.
So look around you, identify a problem, and come up with a viable solution that can be turned into a successful business.
2. Consider your interests and passions
Several people have been able to turn their passions and interests into profitable businesses. Think of business ideas and niches in consulting, photography and fashion spaces. Most of the thriving businesses in these industries have been built by people who followed their passions and interests.
Building a business around something you love fosters motivation and ensures a deeper level of satisfaction in what you do. But while following your passions and interests, you ought to ensure you don’t just love doing something, but you are also good at it.
The fact that someone loves cooking doesn’t mean they are automatically good at it, so either they get good at it or get someone else to handle the cooking. That’s the only way you can build a thriving business out of your passions and interests.
3. Talk to your family and friends or a professional business consultant
They say “two heads are better than one,” and this may be one of those instances where two heads can team up to develop a winning idea. You can brainstorm business ideas with your friends or family. These conversations can help you identify possible gaps that you might have missed if you were doing this alone. We all have that one friend or family member who’s business-inclined and can help in situations like these—call them.
Alternatively, you can choose to talk to a professional business consultant who has expertise and is more knowledgeable about the local business landscape. If they are good at what they do, they can help you come up with an idea that can eventually become a profitable business.
4. Conduct market research to identify gaps
Research helps you make informed decisions rather than basing your decisions on assumptions. Therefore, conduct thorough market research to identify gaps and opportunities in the market. then capitalize on it.
You can analyze existing businesses and pinpoint areas where you could offer a unique solution or enhance existing ones. Pay attention to how people behave in different contexts. Identifying patterns and areas where consumer behaviour suggests a need for a new product or service can be instrumental in shaping your idea.
5. Improve on an existing product or service
You don’t always need to invent new products or services for your ideas to be considered good or brilliant. Just by improving on an already existing product, it could turn into a great business. Look around you, is there a product you use that you think can be improved on?
Perhaps the design could be changed for more comfortable use or maybe a different feature could be added. A little change can make the product or service more tailored to customer preferences and create a larger market for it.
6. Innovate something entirely new
Innovating something entirely new involves coming up with a product or service that is non-existent on the market. Or finding an untried approach to an existing product or service, like Uber did to hailing a taxi or Airbnb did to finding short-stay accommodations.
This process requires you to be creative and have a willingness to take risks since it can either be successful or fail. It will also require you to create a market for your innovation since there might currently not be one.
Since this is a more risky approach to building a business, it’s better to test and iterate your business idea through lean business planning to minimize the risk involved.
7. Look for franchise opportunities
Franchise opportunities are one of the quickest ways to come up with a good business idea and build a thriving venture out of it. Franchises offer a proven business model and support structure that you can easily capitalize on. And in the case where the business you’re franchising has built a well-known brand across the world, your job becomes much easier.
Imagine franchising a worldwide-known brand like McDonald’s. The brand already has a huge customer base and even in cities where there are no McDonald’s branches, there’s an existing market willing to buy.
In short, franchising reduces some of the risks associated with starting a business from scratch and gives you a good headstart.
What makes a good business idea?
You can identify a good business idea when it possesses some common qualities. Some of the qualities that make an idea worth pursuing include.
1. Market demand
A good business idea addresses a genuine need or demand in the market. In fact, building a business based on an already existing market is a great approach to a thriving business. So whether your business idea is based on your passion or your innovation, ensure there is a clear market demand. A product or service with an existing market demand is more likely to gain traction and generate revenue quickly.
2. Profitable
Financial sustainability is a critical characteristic of a good idea. Even if your business was developed out of passion, it still needs to bring in revenue. While your business might not be profitable right away, there has to be potential. It needs to be able to attract enough customers so that revenue exceeds expenses in your cash flow.
3. Scalability
A successful business idea should have the potential to scale. Scalability ensures that your business can grow to meet increased demand without encountering many hurdles. Scalability is the ability to grow your business in a dynamic market with flexibility, whether that growth is local, national, or worldwide.
4. Sustainability
Every good business idea has the quality of being sustainable in the long term. Consider the environmental, social, and economic impact of your business. Does it have a positive impact? Is it solving real-life problems?
Sustainable businesses that align with ethical practices and social responsibility often enjoy increased customer loyalty and positive brand perception.
5. Fits your goals
What is your long-term goal? Is it solely to make profits? To help others? Or is it to leave a legacy for your family? By ensuring your idea fits your goals, you allocate your resources and time to building a business that helps you achieve your goals.
What next?
Once you find a good idea, that is only the first step to building a thriving business. You still need to validate your idea by talking with potential customers, running surveys, testing, and iterating to avoid making some common business mistakes in your journey. You also need to create a business plan and continuously refine your ideas based on feedback and changing market conditions, since nothing is constant.
Do you have some ideas already? Check out this guide on some of the most profitable industries where you can explore opportunities.
