By Dr. Amanda Crowe | 07/10/2024
Starting a new business is an exciting adventure. However, many potential entrepreneurs never make it to the starting line because they do not believe they have a good business idea.
Coming up with a winning idea may be easier than you think. I developed my first business idea by identifying something that bugged me and those around me: the lack of availability of bubble gum at school.
After purchasing a bucket of bubble gum at my local warehouse store, my first and most simple business concept came to life. I sold bubblegum to my friends at school, filling a void and satisfying a pain point of many students many students who were just like me.
But starting a business isn’t always about seeing an immediate need from your own life and fulfilling it. Many successful entrepreneurs prefer to evaluate trends and needs in different industries and combine ideas from those industries to achieve a better product or service. Tesla®, for example, uses a combination of new ideas from the technology and automotive industries.
Understanding the Market
If you have a specific industry in mind, dig deep to find out as much information about the industry as possible before developing a business model. For example, do you think you might enjoy owning a coffee shop?
To help get your creative juices flowing, do your research. Read coffee or beverage industry publications and websites, and visit a few of the coffee shops in your area. Determine what they are great at doing and what they’re not doing so well, as well as where new technology could be useful.
Ask other customers what they enjoy most about the shop. In your quest to understand the market, you may want to conduct focus groups or surveys to determine what is missing.
Identifying Gaps and Opportunities
According to Jeffery Timmons, the developer of the Timmons Model of Entrepreneurship, new startup ideas should begin with the development of the opportunity before considering money, strategy, the team, or a business. To address the discrepancy between innovative market desires and the offerings of existing products, collect information from potential customers through interviews, surveys, and observations.
Learn about the likes and dislikes of your target audience and their spending habits and investigate what their daily life looks like. Having a clear understanding of what the market wants better enables you to turn an idea into a product or service your target market is seeking.
To create the perfect small business opportunity, identify a market gap or an unfulfilled or underserved customer need. Then, use a creative process to successfully fill it.
Netflix®, for example, recognized that consumers were spending more money in late rental fees than on the initial rental. To fulfill the need of longer rentals, Netflix created a mail-order movie rental service.
Social listening is another common practice used to understand gaps and opportunities and create new ideas for businesses. Product or service users may be more honest about their experiences, particularly negative experiences, when they post online reviews on social media accounts and in online forums. Collecting information online allows you to understand how your potential competitors address customers’ needs and how to address those needs in a better way.
Analyzing Personal Interests and Strengths
Self-assessments allow you to evaluate your own personal assets and areas to improve such as skills, hobbies, interests, and experiences. Understanding your skills, interests, passions, and knowledge may translate into viable business ideas.
When embarking on the entrepreneurial journey, be sure to identify your strengths that you learned on the job. Knowing your strengths can provide insights into how business can be conducted in a more efficient way.
The founder of a popular stroller fitness franchise, for example, used this model to develop her business concept. She identified great communication as one of her strengths.
Then, she matched this strength with a skill (group fitness instruction) and an interest (connecting with other mothers of small children in her community) to create a local stroller fitness business. Her business quickly grew into a national franchise.
Aligning Personal Skills with Market Needs
After completing a self-assessment and determining your strengths and weaknesses, conduct a situational analysis of the industry. Determine the industry's strengths, weaknesses, opportunities, and threats.
Matching your personal strengths with market demands can solve problems in new, innovative ways. Doing so may increase your likelihood of business success.
The strengths and weaknesses of an industry should be things that other businesses have control over, such as the common management structure, typical hours of service, or the way business is done in general.
Opportunities and threats, on the other hand, impact the industry as a whole. Small businesses do not have control over these elements.
Opportunities and threats include the economy, technology, and customer trends. Personal strengths should be weighed against industry weaknesses or threats to determine how a personal strength may be the answer to solving customer problems in a more innovative or efficient way.
The founders of Uber®, for instance, built a successful business idea by incorporating the founders’ knowledge of technology into the automotive and transportation industry through mobile apps. This one idea, based on an unmet need and the founders’ personal skills, changed the way people travel around the world.
Networking
Networking – interacting with others to exchange information and resources – is an invaluable but often forgotten ideation tool. Networking and collaboration with like-minded professionals open the door for many ideation opportunities. An entrepreneur’s network is an invaluable resource when it is developed correctly.
An entrepreneurial network creates a diverse reservoir of knowledge, experience, and expertise that is invaluable for working towards finding innovative solutions. Also, a network can serve as a hub for collaboration and a means for different perspectives. It is not uncommon for entrepreneurs to join forces to address challenges, launch initiatives, and address common causes.
One of the most popular types of networking groups for ideation is a mastermind. A mastermind is a small group of people who share common values and goals or who may have similar backgrounds who meet regularly to discuss business issues and innovations.
Entrepreneurs join mastermind groups to get and provide peer support, brainstorm, and have a safe place to communicate with other like-minded individuals. When meeting with a mastermind group, entrepreneurs can share their business ideas and get feedback as well as brainstorm to develop the best possible business ideas.
Brainstorming
Brainstorming involves using a creative thinking or idea generation technique to contribute an innovative solution for a certain industry. While a brainstorming session can be done alone, it is usually most effective with multiple participants. Grab some friends, family members, or business associates; decide on a problem to solve; and start to explore some solutions.
To get started, set the stage for brainstorming sessions by choosing a comfortable place to get the creative juices flowing for potential business ideas. Minimize any distractions by turning off phone notifications, clearing the workspace of clutter, and consider using earplugs or headphones to create a silent environment for creative thought.
Every entrepreneur has a different brainstorming process. There are many techniques to explore, including:
- Mindmapping
- Reverse brainstorming
- Brainwriting
- Starbursting
- The Delphi method
Mindmapping
Mindmapping is a simple way to brainstorm business ideas with little structure or order. Tasks, words, concepts, and items are associated with a central theme, word, or concepts in the form of a graph.
To develop a mind map, start with a centralized concept or problem during a brainstorming session, then produce branches and twigs from that central concept. The branches and twigs can be related ideas or topics.
Mindmapping converts a long list of monotonous information into a colorful, memorable, and highly organized diagram. Mind mapping is best for:
- Brainstorming concepts
- Visualizing business ideas
- Simplifying ideas
Reverse Brainstorming
Reverse brainstorming is a technique that buys into the idea that things could be worse. Instead of focusing on a solution, the team further defines and develops the problem, then comes up with ideas about how it could be worse.
For instance, instead of considering how satisfaction with a product or service can be improved, ask how satisfaction could be decreased. Collect ideas on an undesirable outcome, then reverse them to achieve the desired outcome. Reverse brainstorming involves a four-step process:
- Identifying the problem
- Reversing the problem
- Collecting ideas
- Reversing the ideas
Brainwriting
Brainwriting is one of my favorite brainstorming ideas. In a brainwriting session, entrepreneurs independently write down three to five ideas during a predetermined time period (usually five minutes) without speaking to anyone else in the brainstorm group.
Upon completion of the writing period, each participant gives their ideas to the person next to them, who uses those ideas to add to their own ideas or the thoughts on the paper. No idea should be repeated twice.
With brainwriting, quantity is valued over quality. There are no bad ideas and the and the process produces a large quantity of ideas. Business ideas should be reviewed for feasibility and quality at the end of the brainwriting session to determine the best idea.
Starbursting
The starbursting brainstorming method focuses on asking questions to come up with or define an idea. Entrepreneurs using the starbursting method should ask:
- Who
- What
- Why
- Where
- When
- How
There are an unlimited number of questions that could be created and addressed in this type of brainstorm session. A starbursting brainstorm session may lead you to ask questions such as:
- Why would people be interested in this business idea?
- Who are the competitors?
- What should the business be named?
- Where will the product or service be sold?
- When is the best time to launch this type of business?
- How will this business impact the community?
The Delphi Method
The Delphi method is a collaborative brainstorming tool that relies on a panel of experts to share their opinions, which allows the group to evaluate and respond to alternative views and revise ideas collaboratively in real time. The Delphi method should be used when there is limited or conflicting information.
After defining the problem to be addressed in the brainstorming session, the facilitator must also develop up to three lines of questioning, often in a survey style. The experts then respond to the three lines of questioning before compiling and analyzing the data and acting on the findings.
The Bottom Line
The journey of starting a new business begins with the spark of a great idea. While many entrepreneurs feel daunted by the challenge of developing a new concept, there are numerous strategies and techniques available to help generate and refine these ideas. From identifying personal pain points to leveraging industry trends and learning how to brainstorm effectively, the pathways to business ideation are diverse.
Embrace continuous idea generation as a fundamental part of developing a successful new business idea. Regularly engage in creative activities, seek feedback from diverse sources, and stay informed about trends. Remember that the first idea is rarely the million-dollar idea; the best concepts often emerge through brainstorming, feedback, and refinement.
By fostering a habit of continuous ideation, you can determine innovative solutions to any problem, stay ahead of changing market demands, and develop a competitive advantage. Keep exploring, experimenting, and developing your ideas, as this pursuit of innovation is key to building a winning business model.
Ultimately, the key to successful ideation lies in persistence, creativity, and a willingness to explore various methods and approaches. Whether you’re working solo or collaborating with others, the process of refining ideas is crucial in transforming a simple thought into a viable business venture.
Great business ideas often emerge from the intersection of personal passion, skills, and an awareness of market opportunities. By embracing these strategies, you can confidently take your first steps toward realizing your business dreams and hopefully creating a profitable business.
Entrepreneurship Degrees at AMU
For adult learners interested in developing a small business startup or wishing to gain new skills, American Military University (AMU) offers two degrees in entrepreneurship:
Courses in these programs include topics such as financing a new venture, business plan foundations, idea generation, innovative marketing, strategic business growth, and business law. Students can also learn about business metrics, business models, business ideation, and strategic planning.
These two programs have also achieved accreditation from the Accreditation Council for Business Schools and Programs (ACBSP®). This accreditation ensures that these two degrees have met stringent educational standards.
For more information about our entrepreneurship degrees, visit our program page.
Tesla is a registered trademark of Tesla, Inc.
Netflix is a registered trademark of Netflix, Inc.
Uber is a registered trademark of Uber Technologies, Inc.
ACBSP® is a registered trademark of the Accreditation Council for Business Schools and Programs.