Are you looking for advice on how to choose the right business idea? Then you’re in the right place.
Many entrepreneurs have multiple business ideas in the beginning and struggle to decide which one to launch. Or the opposite can happen, and you have no idea what type of business you want, but know that you want to be a business owner.
Picking what business you want to start is a big decision to make, and one that you want to thoroughly plan out. By taking the time now to sit down and think about this choice can save you time and money in the long run which is incredibly important to any entrepreneur new or seasoned.
In this article I’ll be:
- Discussing how to tell a good idea vs. a bad idea
- Talking about mistakes to avoid
- Going over a step by step guide on what to do to find the right business
- And so much more.
A Good Idea vs. A Bad Idea: How to Tell
There is no magic formula on how to come up with a good idea, but there are some questions that you can ask yourself.
- Does it solve a problem?
- Is anybody else doing it?(Think about why or why not)
- Is it profitable?
The best possible way to find out if your idea is good or bad, is to do your own research. Research competitors, price start up costs, and most importantly, know that there is a market for the problem that you’re trying to solve.
What If I Have No Business Ideas?
Sometimes you just know that you don’t want what you have or are familiar with. For example…
- You may not want a 9-5 job
- Maybe you don’t like being away from your kids
- You might not like the crazy work schedule you have
- Maybe you don’t want to live off of a retirement pension, welfare, or another income stream of the sort
- Or, maybe being your own boss is something that you’ve always wanted but you don’t know what you could do.
Think About What You Like and Dislike
First, think about your likes and dislikes. If you don’t like waking up early, then you probably don’t want to start a baking business. But, if baking it’s something that you’re really passionate about, weigh the pros and cons. See whether the cons outweigh the enjoyment of doing something you love.
Talk to Family and Friends
Second, ask friends and family what they think you would be good at. Sometimes, people closest to you can open your eyes to skills and strengths that you didn’t know you have.
Lastly, think about what you would enjoy doing everyday. Being your own boss isn’t just a 9-5 job that you can clock out of. Being a business owner requires 24/7 care for the first few years, so you’ll want to be happy. Choose something that you’ll love to do.
What if I’m Stuck Between Two or Three Business Ideas?
If you have multiple business ideas that you’re thinking about, you’re probably wondering how to choose the one that gives you the greatest potential.
Sometimes you can end up wasting time doing a little bit of work on each project here or there. Never fully committing to one. It’s hard work running one successful business, let alone several.
It’s important to narrow down on one idea so that you give your business the best chance of success.
Mistakes to Avoid
Mistakes happen,and when you’re depending on others to buy your products or services, sometimes there are things that are out of your control.
However, I’ll be discussing some common mistakes that new entrepreneurs make so that you can better the chances of your business success.
1. Focusing Entirely on Money
It’s important to focus on money, especially when you’re a new business owner, but it can’t be your only focus.
When profits outweigh product quality and customer satisfaction then you’ll quickly find that you’ll be struggling to find new customers. There has to be a balance between profitability and product quality so that you either gain more customers by repeat purchases or word of mouth.
2. Focusing Entirely on Passion
Similar to those being focused mostly on money, there’s an opposite approach that can also be problematic–that’s being too focused on passion.
Being passionate about your business is extremely important. It’s most likely the reason that you started your business; you wanted to share what you love.Passion is great to have but you also have to keep a business mindset as well. Products and services have to be priced so that the business is profitable. Sometimes, business owners can be too excited and willing to share that they ultimately give away all their profits.
Remember: Income – Expenses = Profit
3. Focusing Too Much on Other People’s Results vs. Their Own Skills
When you focus your energy on others’ success versus your own business, you can lose momentum and confidence in yourself. Your competitor might have had a family friend in the industry or simply had a very lucky break. Either way their journey isn’t yours, and your own business should be your main focus.
Focus on building and perfecting your own skills to make your business stand out. By spending your time thinking about why your competitors are doing so well doesn’t help you, but thinking about ways you can improve your own business does.
There are times when comparing your business to a competitor can be beneficial, but you always have to maintain your own business identity.
4. Thinking the Idea Won’t Need Marketing
You’ve probably heard people say that a great idea will sell itself. And that can be true but people still need to hear and know about your business in order to want to buy your products–that’s where marketing comes in.
Nowadays there are so many options when it comes to marketing your business. You can choose to run Instagram or Facebook Ads, have social media pages, a website, and much more.
Many people rely on the internet to help solve their problems, so you want your business to be the first one that shows up in their searches.
5. Taking on Too Much
It’s not uncommon for new entrepreneurs to take on too much in the beginning in a variety of ways.
Sometimes, it’s having too large of a product line where you end up with stock sitting waiting to sell. The cost to keep a large variety of products in stock at all times can also be expensive, so that’s something else to consider.
Other times a business owner can take on too much responsibility. Imagine starting a restaurant, with delivery service, a food truck, and catering service all at once! It could be overwhelming, and without help, you could be stretched too thin to ensure that all aspects of the business were doing well.
What to do To Find the Right Business Idea Step-by-Step
If you’re stuck trying to find the right business idea, here is what I recommend that you do to get out of the rut…
- Think about the customer that you want to have
- What problem are you solving for them?
- Where will they be looking to have this problem solved?
- How will they find your solution?
Map out the journey that you want your ideal customer to take to find your business and make a purchase.
- How competitive is the market?
- Who are your competitors?
- Is there a market for your product?
3. Get Feedback
Don’t be afraid to ask friends and family for feedback on your business idea. They might be able to point out a strength or weakness that you may have overlooked that could either aid or hinder your business idea.
4. Do a Life Plan
Starting a business will undoubtedly change your life in many big ways. It can even change your legacy long term. Is this business something that you want people to remember about you?
Either way, businesses take a lot of time and effort, so it’s important to think about whether it fits into your overall lifeplan. If you haven’t done a life plan before, check out the Startup Entrepreneur’s Toolkit (which includes a life plan template).
5. Do a Business Plan
An important first step for any successful business is to set goals that help guide your actions.
- When do you want to launch?
- What services will you offer?
- How much will you charge?
- How much product do you need to launch?
- and More
Get started with our free business planner, and begin getting a clearer picture of your goals.
A Criteria for Choosing the Right Business Idea
Once you’ve narrowed down to a few business ideas, then you want to look at these things and decide which works best for your situation…
1. Startup Costs
The cost of starting up any business can vary greatly depending on the owners preference. There are endless options to get products and services for your business which can include but aren’t limited to dropshipping, becoming an affiliate in a company, making your own product, or hiring others.
Each business choice you make is going to have its own costs and benefits. You’ll have to weigh out your best options based on your budget.
Money is a big factor in starting a business. You’re probably going to have a difficult time starting a goldsmithing business with $500 because it’s not feasible to get all the equipment and materials required to start up for that price, let alone all the other costs that come with running a business.
Some businesses simply require more funds to start up so be realistic with your choice.
Some businesses are more risky than others and require more expertise. For example, running a hospital comes along with lots of compliance and rules.
If you wanted to start a hospital or even a medical practice, you have to know things about the medical field (including the trade, the rules and regulations, and more).
When you don’t have the skills for the business you want to start, it’s best to be self-aware about that, and to decide whether to go forward with the business. If you decide you still want to give the business a shot, then you’ll want to calculate the cost of accumulating the skill, the experience, and the mentorship you might need to be successful in the field, and decide if it’s feasible for you.
3. Amount of Time
How much time is required to run your business and how much time are you realistically able to spend. Some businesses require more time than others to be successful so it’s important to take that into account.
If you’re passionate about your business idea and what it has to offer, customers will gravitate towards it. People will notice your enthusiasm, and positively.
Plus who doesn’t want to do what they enjoy for a living? It’s most likely why you want to be an entrepreneur.
5. Willingness to Prioritize
Is this business idea worth it to you? You’ll have to make many sacrifices and prioritize business tasks over personal pleasure at times. Make sure that the rewards outweigh the sacrifices that you’ll have to make over time.
6. Analyzing your Network
Networking can be a form of currency itself. Think about who you know and don’t be afraid to ask around for connections. Friends, family, and even coworkers are usually quite eager to help someone they know with a new business adventure.
Having well known contacts in the industry that you choose to work in can be invaluable for a new business. It can help with finding better pricing on materials, or even a collaboration in the future.
Choosing a business idea can be a big decision that impacts you the rest of your life. I hope that I was able to help explain the steps needed if you were struggling to figure out how to choose the right business for you.
If you’re ready to get started with your business, I recommend you check out the Startup Entrepreneur’s Toolkit and learn how to master the process of getting consistent online sales.