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How to Come Up with a New Business Idea

About 543,000 new businesses are started each month and over 50 percent shut down within the first 5 years. The failure rate of small businesses magnifies the need for an outstanding business concept. The first step to starting your own business is to come up with a business idea. This idea should be a solution, that doesn’t yet exist, to a reoccurring problem. A common misconception around generating business ideas is that you have to be extremely creative. This is false. Everyone has an ability to hatch a new business idea based on everyday challenges. For example, are you ever ready to dive into a project at work but you can’t remember your log in information to the sites you need? Maybe this sparks an idea for a password-saving app that collects and remembers your log in information automatically, so next time you begin a project, you won’t have to waste time trying multiple passwords. Some of the best and most thoughtful products on today’s market are the ones based off of everyday annoyances experienced by the creators.

Steps to Generating Ideas for New Businesses

Step 1: Become a professional at identifying problems  

Come up with a new business idea based on the simple challenges you face each day. It’s important to realize that your own daily problems can become new business ideas. You can even come up with a new concept by making improvements to an existing business idea. Take dating apps for example. To start out, there was just one dating website. Currently, there are tons of different dating apps and websites that people use to meet each other such as Tinder, Bumble and Match.com. Tinder and Bumble are similar because they are both location based dating apps, but Bumble only lets the women start the conversation, men cannot. Bumble fits a market need and is catering to the taste of women. There was an issue of women not feeling comfortable on dating websites, so the creators of Bumble decided to come up with a dating app—based off of an existing idea, to take a female first approach.

Each of these apps or websites are building on ideas created by someone else to streamline the process or, simply to make it better.

Step 2: Examine your interests and hobbies

A lot of entrepreneurs start their businesses based on something they are good at and enjoy doing. If you have a specific hobby, look into creating a business around it. You may love something so much, whether it be an activity, food or tangible object, that you could ultimately charge people for. For example, if you love to bake, you may be able to open and run a successful bakery. Another example includes the rising popularity of gender reveal cakes for expectant parents. The creator of that phenomenon most likely appreciated baking and came up with the idea of serving this niche market. Building a business based on something you enjoy doing will make it seem less like work and more like getting paid for doing what you love.

Step 3: Ask your friends and family for their input

You will need the help of others to create a successful business. Asking friends and family for new business ideas can help you expand on concepts you have already come up with or even form new ones. Ask them what types of problems they face each day and talk about possible solutions. It’s also helpful to run some of your existing ideas by those you trust to get their feedback. Getting a second opinion will force you to see your idea in the eyes of others. You could realize new challenges you may run into, which will better prepare you, or they may give you some tips that allow you to improve your idea.

Step 4: Save people money

Generating ideas for new business that involve saving the customer money are always good ideas. Your business will most likely survive if you are providing the solution to an existing problem at a cheaper price than your competitors. All consumers across the US choose products and services based on price. For example, if you’re shopping and fall in love with two tops but can’t decide between the two, you’ll most likely choose the cheaper one. If your startup is a variation of an existing idea, making it cheaper could be the deciding factor for potential customers.

Step 5: Save people time

It’s proven successful to create something that saves people time and makes their lives easier. For example, let’s take a look at the movie Joy, starring Jennifer Lawrence. The main character, a busy, overworked mom, badly cut herself while wringing out a mop used to clean up broken glass. She knew she wasn’t the only one getting hurt by sharp objects stuck in mop heads. Based on that particular experience, she created a self-wringing mop. Joy identified a common problem and developed a product to solve it, saving herself and millions of other women time cleaning, and time tending to their cuts and scrapes from wringing out the mop with their bare hands.

Products with automatic features and timers, apps that turn off your lights and close your garage to save you energy and give you piece of mind are all good examples as well. Imagine being on vacation for a few weeks but wanting to leave lights on at night in your home. You can use the Wink app and light bulbs, these products allow you to leave lights on for however long you prefer and have the app turn them off whenever. Forming new startup ideas that cut down on the time it takes to complete the task will engage and interest your potential customers. Once you come up with the initial concept, you are able to analyze and continue to tweak your product or service to make it less time consuming for customers. These types of perks won’t go unnoticed with your audience.

Step 6: Travel to broaden your experiences   

Look outside what you are most familiar with and try to come up with something completely different. Traveling the world opens your mind to fresh ideas. Participating in unfamiliar activities in far-away places is a surefire method to ignite your creativity. Traveling helps you easily define a vague idea you may already have or generate a completely new idea. Travelers come across difficulties such as lost passports, flight delays, missing luggage, getting lost in an unfamiliar place, and much more. Placing yourself in these situations helps you think of ideas to solve the problems at hand. Maybe you didn’t know these complications existed if you were running through the motions of everyday life.

Once you create your idea, be sure to research it thoroughly. Take into account all the challenges you’ll face and have realistic solutions for each. Talk to friends and family about your concept for their input and suggestions. Once you’ve researched, it’s time to start thinking about formulating a business plan, something all entrepreneurs recommend.  Lastly, believe in yourself and your design and don’t give up! There are sure to be stressful times but if you possess a unique idea, a solid business and a reachable goal, you will likely succeed.

Need a stronger cash flow for your startup? Learn more about factoring your accounts receivables.

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