on whether it does something newer or better than anything else. Being newer or better can take many forms:
Offering something new. This could be a new product, service, feature, or technology.
Offering something better. This could be an improvement on an existing product or service encompassing more features, lower price, greater reliability, faster speed, increased convenience, or enhanced technology.
Discovering an underserved or new market. This is a market in which there is greater demand than competitors can currently satisfy, an unserved location, or a small part of an overall market—a niche market—that hasn’t yet been dominated by other competitors. Sometimes, markets become underserved when large companies abandon or neglect smaller portions of their current customer base.
Offering a new delivery system or distribution channel. New technologies, particularly the Internet, allow companies to reach customers more efficiently. This has opened up many new opportunities for businesses to provide products or services less expensively, to a wider geographic area, or with far greater choice.
Increasing integration. This occurs when a product is both manufactured and sold by the same company, or when a company offers more services or products in one location.
Your basic business concept should be strong in at least one area. If not, you should ask yourself how your company will be truly competitive.
Discovering Your Business Concept
Have you always wanted to be your own boss but don’t know what kind of business to start? As you begin to evaluate business concepts, begin by examining:
What you really want to do. Maybe you’re one of the lucky ones who knows exactly what business you’d like to start. But just because you’ve got a passion to do something doesn’t mean you should necessarily “follow your bliss.” You may, for instance, dream of opening a restaurant or running a bed and breakfast, both very challenging businesses. Before plunging in, take a good, clear, hard look at the realities.
What you’ve done. If you need income fast, pursuing a business in which you already have experience will generally be the quickest route. It’s also often the most comfortable transition to self-employment. You may already have contacts or potential customers in your address book, know the market and industry well, and have strong referral sources. But look closely at whether you can do this business on your own. And just because you’ve done something for a long time (and are presumably good at it) doesn’t mean you necessarily want to keep doing it any longer.
Your hobbies or interests. Many people dream of turning their hobbies into their profession. Sometimes that works really well. But I’m not always a big proponent of turning your hobby into your full-time occupation. After all, why take something that’s now a source of pleasure and potentially turn it into a source of stress? Remember, doing something to please yourself isn’t necessarily the same as doing it to please customers. You may love photography, but will you love it as much after fifty weddings?
Who you know. Let’s face it, lots of people start their businesses because they have a great contact in an industry or business. Perhaps you know someone who needs an independent sales representative for their company or someone in a big corporation who can outsource work to your new consulting business. Also, many people go into business after a potential partner asks them to join the company. Just be cautious. Make certain you like the kind of work you’re going into, and whenever you enter into a relationship, put the details in writing.
What you’re good at. Why not use your skills? These may be different than your experience or your hobbies. For instance, you may be the person your neighbors turn to for help installing electronic equipment or decorating their homes. Perhaps there’s a business opportunity there if many others in your community need the same type of assistance.
A market opportunity. Look around: what’s missing in your community, industry, or profession that you might be able to provide? There are usually many services or products that still need to be provided. Maybe it’s a service available elsewhere but not locally; perhaps you see a big company neglecting or leaving a line of business that you could serve instead.
What you want to learn. Believe it or not, one good way to learn something is to start a business doing it. Yes, you may need to get some additional training or education, and you won’t be able to charge as much as those who know more than you, but you can learn a lot while you’re on the job. For instance, you may want to learn more about nature and so decide to organize ecology-based tours.
How Good Is Your Business Idea?
Time for a true confession: my first business idea flopped. When I began working for myself, I started as a “Charitable Giving Consultant.” My concept was to assist wealthy individuals and small family foundations with their philanthropic activities. I had the background, I knew people really needed the service, and no one else was doing it. It was a great idea.
Great, but too new. Every time I met with a prospective client, I had to make two sales: first I had to sell them on the concept, then I had to sell them on me.
To my surprise, I discovered I enjoyed doing something entirely different. Even before I got my first charitable giving client (and I got a big one), I met someone who needed a business plan written. Though I had little background in business plan development, I took to it immediately and realized I could make a good living.
That’s why I advise people starting a business not to be completely obsessed by devising just the right business idea. It’s likely to change anyway. If you’re trying to figure out what kind of business to start, keep in mind:
An idea isn’t enough. I’ve met hundreds of would-be entrepreneurs who are afraid to tell anyone their idea because they fear someone will steal it, and even more who are bitter because they think someone “stole” their idea. Ideas aren’t businesses—they’re just ideas. I have ideas for dozens of books every year, but that doesn’t mean I’m going to be able to write them all, or even that all of them deserve to be written. The key is execution.
Businesses take hard work, persistence, and efficient cash management. Solid business operations beat great business ideas every day of the week. Nobody pays the rent just by coming up with ideas.
You don’t need a new idea to be successful. In fact, most good, profitable businesses are developed from rather mundane ideas. Yes, it may have taken a Levi Strauss to invent blue jeans, but you can have a money-making retail store selling jeans without coming up with anything particularly new or exciting. Most of us don’t want huge multinational businesses, we just want solid, profitable companies.
