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Finding the right small business idea
This article is part of our How to start a business playbook, which covers topics like finding the right business idea, writing a business plan and finding small business loans.
Every wildly successful business started as the same thing: a great idea. And while finding a good business idea is only the very tip of the iceberg, it’s an incredibly important first step toward building your business.
You might picture every business starting with a dramatic and out-of-the-blue Eureka! moment, but that isn’t always the case. Often, driven and entrepreneurially-minded people go out looking for business ideas. If that’s you, you’ve come to the right place.
In this chapter, we’ll talk about three vital steps you should take to find and validate the perfect business idea for you. We’ll cover:
- The right mindset for brainstorming,
- Questions to ask and where to look for good business ideas, and
- Finally, narrowing down your business ideas.
Let’s get started!
The right mindset for brainstorming business ideas
These days we’re all drowning in stories of amazing innovation, industry disruptors, and rags-to-riches founders—but those stories don’t represent the vast majority of entrepreneurs.
Coverage of these wild business success stories gives us a bias toward the “big” ideas. It’s easy to get into the habit of thinking only lofty, revolutionary business ideas are worth pursuing. The small businesses that drive our global economy aren’t the flashy unicorn startups we hear so much about.
For most people starting a business, the issue should not be coming up with something so unique that no one has ever heard of it but instead answering the questions: “How can I improve on this?” or “Can I do this better or differently from the other guy doing it over there?”
A great business idea doesn’t have to fundamentally revolutionize every aspect of modern life for every person on the planet. Get in the mindset that your business idea should make one part of someone’s day a little bit better—easier, faster, more affordable or convenient.
Business idea brainstorming tips
For many of us, brainstorming doesn’t always come naturally. We have a habit of self-editing our thoughts and ideas, even as we’re first thinking them. We cut our thoughts off at the knees, before they’re fully formed. That can make it tough to come up with a big list of ideas.
That’s why we’re handing out some of our business idea brainstorming tips to help you create the right atmosphere.
- Give inspiration a seat at the table: It isn’t important that every business idea be completely practical. Allow your inspiration to drive some of your ideas and you never know where you may end up.
- Be forward-looking: Some of the most successful businesses didn’t operate in any existing industry—they created their own. Include ideas that allow your business to create the future, not just react to it.
- Keep track of ideas as they come to you: Sitting down with a pen (or a blinking cursor) and blank sheet of paper can put a lot of pressure on your brain, and that can shut down creativity in a hurry. Instead, nurture your creativity and find a way to keep track of business ideas as they come to you organically.
- Approach problems from multiple angles: Each angle is a different potential business. Can you do something cheaper? Can you make it easier for customers? Can you bring an existing solution to a different market?
- Brainstorm with a partner: Start out brainstorming with a cofounder or like-minded friend or colleague. Being able to bounce ideas off of each other and build off of each person’s ideas is invaluable to the brainstorming process.
- Use a framework: When a blank canvas feels too overwhelming, use a concrete framework to help you think through problems. Try this business idea framework from Dan Lewis, Head of Product at Wavii.
Step 1: Write out a giant list of business ideas
Now that you’re in the right mindspace to come up with viable business ideas, the most important step is to ask questions—a lot of them. There are a lot of places you can find good business ideas, but all of them require an inquisitive approach. How can I make X better for Y? How can I make this person’s life easier?
To find the best business idea for you start by pulling together a big list of possible options. Remember, never self-edit or nitpick when you’re brainstorming—even “bad” ideas can start your mind down a path to the perfect business.
The very best business ideas involve something you love to do, that requires skills few people—or only you—possess, and addresses a common struggle in the market. What does that mean? Let’s break it down to the three main angles you can take when looking for your business idea.
The special skills approach
You’re unique, just like every other person in business. There are undoubtedly special skills or talents you have that a lot of other people don’t. Take a look at all the things you do that seem to come naturally.
That could mean things you find easy but other people struggle with. Are you good with numbers? Or great at tackling administrative work? Or, it could be tasks you enjoy that most people hate doing. Do you find peace while balancing your checkbook? Do you glow with accomplishment when you successfully assemble IKEA furniture?
Whenever something comes naturally to you, you can bet there’s a market full of people who struggle with, or just don’t enjoy, doing that thing. That’s your business. When something is a hassle for people, rest assured there’s a market willing to pay you to take that task off their hands.
The passion approach
What are you most passionate about? Starting a business is hard work, and you’re committing to this idea for years (maybe even decades) to come. It’s important that you’re passionate about your business idea, that you’re committing to something that fires you up inside, so there’s something to drive you through the tougher aspects of entrepreneurship.
It’s no secret that passion helps us work harder and longer, but it can also help boost creativity and problem-solving—must-haves when it comes to running a successful business. Not to mention, people who are passionate about their work are just plain happier.
Think about the things you do because you enjoy them. That could be building rustic coffee tables, volunteering with a nonprofit, fishing… anything. How can you turn those things into a business? How can you monetize the things you already do for fun? How can your hobbies earn you money?
The problem solver approach
There’s one thing every successful company has in common: problem solving. The only way to succeed in the market is to solve a problem for your customers—all business boils down to this at the most basic level. No matter what, your business has to solve a problem for someone.
Whether the idea is something you’re super passionate about or something that just comes naturally to you, how can you use that passion or skill to make someone else’s life easier?
One of the easiest places to look for problem-solver ideas is your own life. What could be better about the products or services you use in your own life and work? What complaints do friends and family have that you could solve? If you, your friends, or your family have a problem, there’s a good chance a wider market exists where people will happily pay up for a good solution.
What other entrepreneurs had to say
Sometimes, brainstorming business ideas can feel a little abstract. What do all of those concepts look like in practice? How can you identify real problems in the market? Let’s take a look at how a few prominent entrepreneurs found the business ideas that drive their companies.
Change something that’s “just the way it is”
Lyssa Neel, cofounder and CEO of Linkitz discussed her realization that the way things are, meaning the lack of gender diversity in the tech industry, isn’t the way things have to be.
I was in San Francisco at a tech conference. It was the usual thing, tons of guys and very few women. I’m certainly not the first person to have noticed that. I started thinking about this topic, and it was really bothering me because I’ve been working in tech pretty much since the eighth grade when my school got its first computer. I loved it, and it’s something I think that more girls would like if they knew how much fun it was.
Discover little nuggets your industry is missing
Priceline co-founder Jeff Hoffman says there’s no need to reinvent the wheel with your business idea. Look for existing nuggets that haven’t been applied to your industry yet.
Take a look at what the whole of the rest of the world outside of your industry is doing and see if you can find some piece of brilliance that somebody else implemented that you can be the first person to apply to the industry that you are in. That’s what I noticed that the leaders of the industry do as they find great ideas in the world around them, and they adapt them to use in their industry before anyone else even sees this.
Find a gap between customer needs and the solutions available
Steph Korey, cofounder of Away, talked to The Hustle about bridging a gap between what consumers want and the options available to them.
Jen broke her crappy luggage one day and, when researching her options, realized she could either get more cheap, crappy luggage or really great luggage that was closer to $1,000. We dug into the supply chain and realized all those $1,000 suitcases were marked up wildly because of how they were distributed. We decided we’d make the best luggage in the world designed based on travelers’ true experiences and sell it exclusively direct to consumer.
Don’t look for business ideas—look for problems
Like we described above, Paul Graham, founder of Y Combinator, talked about getting into a problem-solving mindset:
The way to get startup ideas is not to try to think of startup ideas. It’s to look for problems, preferably problems you have yourself. The next best thing to an unmet need of your own is an unmet need of someone else. Try talking to everyone you can about the gaps they find in the world. What’s missing? What would they like to do that they can’t? What’s tedious or annoying, particularly in their work?
Intuit co-founder Scott Cook shared a similar experience on CNN. When his wife started complaining about the process of paying bills, he wondered, with all our technology, why there wasn’t a better way.
One day, my wife was complaining about doing the bills. It struck me: Bing! Here’s something everybody has to do: pay bills. There are problems to be solved and computers are pretty good at doing the essence of financial work. Why isn’t there something to make people’s financial lives fast and easy?
Step 2: Narrow down and vet your business ideas
Now that you’ve brainstormed a big list of business ideas, it’s time to narrow it down. How do you take a big list of ideas and turn it into one, concrete business that you’ll move forward with?
It’s all about asking questions, and the right questions, at that. Now’s the time to fully vet every idea on your list, so you have a holistic picture of what it will take to create a business out of each one. For every business idea, dig into the reality of what it would take to bring it to fruition.
For example, is it realistic for you to raise enough capital to buy an armada of planes and launch your own airline? Maybe—but the barriers to entry are pretty high in the air travel industry, so it’s important to take that into consideration from the start.
Let’s talk about some of the other questions you should use to help pare down your list of business ideas.
What will you need to make this happen?
For every idea on your list, outline an exhaustive list of the people, knowledge, and anything else you’ll need to make the business happen. None of these factors necessarily prohibits you from pursuing a business idea, but it’s important that you understand everything that goes into launching a particular business before you decide on it. Some of the things you’ll need might include:
- A cofounder (or a few): Depending on the product or service, it can be helpful to bring on a cofounder with related skills. For example, if your idea is to develop an app but you have no coding knowledge, it makes sense to look for a technical cofounder to join you.
- Capital: Money, equipment, tools… anything you’ll have to acquire in order to run the business. For some ideas, these can be substantial costs, so it’s important to understand them upfront.
- New skills: More on this later. You can always learn news skills, but you need a solid understanding of what and how much you’ll need to learn to successfully run this business.
- Barriers to entry: Do you need an exceptionally large amount of inventory to start? Are there professional licenses you need to acquire before doing business in this space? What about government regulations you’ll need to comply with?
Do you have the skills or knowledge required?
Are you equipped well enough today to build a business from this idea? For example, if your idea is to build a business selling handmade wooden rocking chairs, are you adept at woodworking? Do you know how to work with a band saw and properly apply varnish?
If the answer is no, that doesn’t necessarily mean you have to cross the idea off your list. In many cases, you can learn whatever it is you need to know to make this business a reality. In other cases, you can bring on a partner, investor, or cofounder who brings those skills to the table.
Regardless of your answer to this question, it’s important to understand upfront what it will take to make this business idea a reality. This will factor into your ultimate decision on which business to pursue and help you plan for the steps you’ll need to take to launch that business.
Is there a market need for this product or service?
This is one of those questions that are easy to overlook—especially when you’re really passionate about an idea. We talked earlier about the perfect business idea being at the intersection of your passion, your talents, and consumers’ needs. This question helps bring the focus back around to that last part.Market validation is all about finding out if your business idea is viable. Can you build a sustainable and profitable business, in today’s marketplace, based on this idea?
If you’re passionate about the idea and it comes naturally to you, but consumers aren’t willing to pay for it, you have a hobby—not a viable business idea. We’ll chat more about how to validate the market potential of your business idea (that is, figuring out if it will make you any money) in Chapter 3.
Does it fire you up inside?
We touched on this earlier, but your passion for the business idea is just as important as your skill and the market need. In fact, a study done by CB Insights found that as many as 22% of startup founders say their businesses failed because they weren’t really interested in what they were doing.
Let’s side-step that pitfall from the beginning by eliminating any business ideas that don’t fire you up inside. Launching a business is a big commitment—between the effort and financial investment you put in to the years you’ll spend working to bring it to life. It’s a lot easier to make (and sustain) that commitment when you’re passionate about the business.
Great business ideas are out there
Despite all the stories we read, most businesses don’t start with a Big Bang-level epiphany. They start with real, driven entrepreneurs searching for a better way to do something. A faster way, a more affordable way, an easier way.
The right business idea for you is out there—you just have to find it.