Before you even begin in business it’s important to have a big business idea. We take a look at where to find the gap in the market that will shape your business, and be the foundation of your success.
Quick takeaways if you’re in a hurry
1. A product or service idea can come from a range of sources
2. The more unique your idea in your market, the more potential value it could offer
3. It’s important to identify at top level that there is a market for your idea before you progress further.
Read on: How to find and validate a business idea
Business opportunities are all around us. But how do you lay your hands on the right business idea that will ultimately lead to your success? We’re going to take a look at the different ways that you can identify a need in the market, and the first step of assessing whether it’s going to turn into a valid business venture.
Solving inefficiency
One of the most straightforward ways to identify an opportunity is by experiencing an inefficiency and coming up with a business idea that corrects it. Put differently this is your opportunity to fulfil the needs or desires of potential customers with your product.
If you find such an opportunity then it’s a good idea to be single minded. Stay focused on exactly the need that you are solving, and stay true to it without overcomplicating your potential offering with lots of features and benefits.
Listen to customers
Customers are an incredible source of product and service ideas, and they often don’t even realise it. If you can spend some time talking to customers about their needs and frustrations, you will probably find that you can begin to identify product or service opportunities upon which to build a business.
In conversations with customers it’s important not to let them solve their problems on their own – don’t lead with questions like “what product would make it easier for you to stay in touch with your customers”, ask instead “where do you have challenges?” or “if you could apply a solution to one problem that your business faces, which one would it be?”
Join a franchise
Franchises are an excellent source of business ideas, and they have the added benefit that a lot of the positioning, marketing and development work has been done for you.
By buying into a franchise you benefit from the work that someone else has done to identify a gap in the market, design the product or service to meet it, and develop the brand that target customers can relate to.
Import your options
Sometimes it may be possible to identify a need or issue that is being met in other markets with a product or service that does not exist where you are. This may be in the town where you are located or could even be within the country that you live in.
In these instances there may be an opportunity to secure an exclusive license for the product in your market and import it to meet customer’s needs. Or alternatively you may find that you can produce the product or service locally and offer unique benefits to your local customers.
Sense check the market
Whichever technique you use to find your need, once you’ve identified it your next step should be to ensure your market is big enough to support your business. You’ll go into more details with numbers in the future, but for now this is really about assessing the potential of your market.
Talk to some potential customers and establish if they recognise the need that you would like to fulfil. Is anyone else offering a product or service that might compete with yours? What value would customers place on having their needs fulfilled?
Understanding the size of your market will allow you to assess whether your product is viable. If you are creating a high value item, you may decide you only require a small market to make your product viable. A good example of this would be if you were developing a luxury product.
But if your product would have a lower potential margin you will need to seek a larger market. This would be true for a business such as a cleaning company, where you would need to find enough customers to build the business to a viable level of profitability.
One of the hardest stages in starting up is coming up with the business idea of what you are going to deliver. If you’ve found a need that is common across a group of consumers, then you’ve started the journey to being a business owner. Once you’ve sense checked that there is a potential market for your product, then you’re ready to move forward and complete some detailed market analysis.
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