Starting a business takes a lot of effort: you have to create a business plan, find investors, borrow money, and hire employees. However, before that, you have to create an idea for the business first. This idea could be a new product, service, or method that consumers are willing to exchange for money. The search for good ideas requires thought, creativity, and research. If you want to become an entrepreneur, keep the following in mind when creating a business idea.
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Part 1 of 3: Developing Ideas
Step 1. Think about what goods or services could improve your life
Write down your strengths and weaknesses. As you looked at the list, was there anything you thought could improve your life? Also consider your experiences. With time and creativity, you may be able to identify some products or services that could be developed as a business.
Step 2. Decide whether you want to provide a product or service
A new business idea is most likely based on a product or service. Each of these products or services requires thought and creativity. Before deciding, consider all the advantages and challenges of the product or service.
- For a new product, you have to develop a good new product or improve the quality of an existing product. Then, invest some money to produce it. This business costs money, but if it is successful it can be very profitable.
- The provision of services will eliminate the need to develop and produce new goods. However, you may have to hire more employees as the business will be difficult to grow if you are self-employed.
- Both options require marketing and advertising. So, whether product or service, invest time and money in this sector as well.
Step 3. Identify existing problems in the industry
Business or invention often begins with disappointment with the existing system. A great way to create a business plan is to look for those problems. If you feel disappointed about something, such as not having someone to provide lawn mower repair services, other people may feel the same way. This can create market opportunities. After recognizing the problem, you can fix it by providing these services.
Step 4. Develop an existing business idea
In addition to learning from problems with existing industries, you can also learn from successful businesses. Study the business and see if you can grow it. By building on an idea from an existing industry, you can carve your name in the market.
For example, many search engines have emerged when Google was created. However, Google is known to have a very accurate algorithm that improves the quality of search results. Google managed to develop a good idea that already exists, namely a search engine
Step 5. Think ahead
Successful entrepreneurs are innovators. They are not satisfied with old methods or technology, but are looking for what they feel will work in the future. You can do this by asking yourself what the next logical step is to develop a product or service. For example, as distance learning and video conferencing are gaining popularity, you might want to start a company that specializes in organizing online meetings. By looking at current trends and developing them, you can create an idea that is futuristic and can change the market.
Step 6. Do some preliminary consumer research
While market research is usually only done after you have an idea, you can do some preliminary research to find out what people value. This step can help you create ideas based on people's wants and needs.
- Do some research on the internet and look for common keywords or searches. That way, you can find out what you are looking for most often and make it the inspiration for your business idea.
- For a more complicated method of searching for popular keywords, you can use sites like Google Adwords or Bing Ads. Both sites can also analyze search engines and search for common searches.
Step 7. Apply your expertise in other areas
Another way to create a new product or service is to use skills you've acquired elsewhere. With creativity, skills learned elsewhere can often be applied to improve completely different areas. Leo Fender, for example, who worked as a radio repairman used his expertise in electronics and amplification to build his first electric guitar. When creating a business idea, also consider all of your skills. You may have a particular talent that could revolutionize a different field.
Step 8. Write down all your ideas
No matter how small or trivial, every idea counts. Make it a habit to write down every idea you have in a notebook. Always carry the book with you because you never know when inspiration will come. That way, all your ideas can be stored neatly in the book. Read these ideas regularly and see if you can develop any of them.
Even if you have a notebook, you should also consider keeping a backup on your computer. This is so that you have a backup of notes in case the notebook is lost or damaged. Digital storage will also allow you to classify ideas more neatly and effectively
Step 9. Hone your creativity
At this stage, don't be too critical of the ideas that come up. During the brainstorming period, don't limit your creativity. Free your mind and see what ideas come up. Creativity and the idea creation process can be stimulated in several ways.
- Take a walk. Several studies have shown that walking helps stimulate brain activity, especially creativity. Go for a walk a few times each week, especially when you're late. Not only good for health, going for a walk will also help you to come up with good ideas. Also, be sure to take a notebook with you when you walk around so that you can immediately jot down any ideas that come up.
- Visit existing shops. If you need ideas, go to shops or department stores that sell a lot of products. Then, consider these products: what products are sold? what are the disadvantages of these products? Also pay attention to items that aren't for sale as that might give you ideas about products that aren't on the market and could be sold.
- Talk to people from various fields. If you're trying to create new software, don't just talk to computer experts. Talk to people who work in different fields, especially ones you don't know much about. Pay attention to how these people use the product or service to help make a living. This will allow you to think creatively and see things from a different perspective. A new perspective can increase your creative power.
- Read Creative Thinking Ways for more ideas on creative thinking.
Step 10. Rest
Although it's a bit of a cliché, the stories of people who come up with brilliant ideas in the shower are true. Ideas often arise when the brain is not forced to think about them. By resting, the brain will also rest. During those breaks, try not to think about your business, products, or anything related. Take time to watch a movie, read a book, go for a walk, or do any other activity you enjoy. While you're taking a break, good ideas that can solve the problem you're having may come up.
Step 11. Get plenty of sleep
In addition to rest, the brain also needs sleep to stay fresh. Try to get enough sleep every night so that the brain can work optimally. Also put pens and paper near the bed. Breakthroughs or ideas may appear in dreams.
Part 2 of 3: Evaluating Ideas
Step 1. Consider the pros and cons of your plan
You may have a great idea but no realistic way to make it happen. Before proceeding, think about whether you can actually stick to the plan. For example, if you think you can open a great restaurant but have never worked in a restaurant and studied culinary school, this idea may be quite difficult to implement. Find more information about how to get rid of goals and ideas that are too difficult to realize and how to make them more achievable.
Step 2. Check if your idea is already owned by someone else
Your idea is very likely to have already been thought of by someone else. As soon as you have a business idea, check to see if other people have thought about it or not. This is so that the effort, time, and money invested in the idea are not wasted because the idea is not original. To avoid this, make sure to do thorough research and find out if your idea is really original or not.
- Initially, use an internet search engine. Look for information about services or products you can think of for your business. If none of the information really matches, also follow all the related information to determine whether someone who has started a business like you exists or not.
- Also check the information at the Directorate General of Intellectual Property of the Indonesian Ministry of Law and Human Rights. This process is more complicated than researching on the internet and you may have to consult a lawyer who deals with patent law to do this.
Step 3. Investigate the competition you have
Don't panic if someone else has the same idea. Many new businesses have a lot of competition when they start and beat their competitors by providing better services or products. Also investigate the potential competition you have.
- Be a customer of your competitors. Buy their product or service so you can see first how they operate. That way, you can examine your competitors closely and figure out how to improve them.
- Talk to the competitor's consumer. Conduct formal or informal surveys of your competitors' customers. Ask specifically what is considered satisfactory and not so that you can tailor your business to their opinion.
- Carefully study the reviews (sites or blogs) that discuss your competitors on the internet. This is so you can find out the opinion of the company's consumers.
Step 4. Share your ideas with family, friends, and coworkers
Before researching consumers, consult with people you know well. Share your idea with them and explain how it can improve an existing industry. Ask them if they will buy the product or service and ask them to answer honestly. That way, you'll get an initial evaluation of your idea from people you can trust. They can support your idea, provide constructive criticism, or tell them that the idea is difficult to implement. Whatever advice is given, you should take it.
Step 5. Talk to potential customers
After creating an idea and sharing it with a few close friends, you need to find out what potential market you have. You can do this in several ways.
- Interview potential customers directly. Go where people might be interested in your business. For example, if you're developing a new type of fishing lure, go to some sporting goods stores and talk to the people in the fishing section. Give a brief description of your business and ask them if they are interested in the business or not. Also make sure not to do it for too long. While some people may not mind discussing it further, most may find it annoying if you take up too much of their time.
- Send surveys by email. Simple surveys can be created in as easy a way as using the Google Forms program. Since you haven't really grown your business yet, you may have difficulty getting the email addresses of the people involved in this survey. To work around this, try sending this survey to people you know and asking them to distribute it to their relationships.
Step 6. Recognize the risks and challenges
All business plans have risks, both financial and personal. You can face many challenges, from lack of funds, disputes with business partners, to problems in personal relationships. Prepare yourself to face these risks. Think about what challenges you might face. That way, you can increase your chances of overcoming them and continuing your business. Many start-ups face problems when starting their business. Keep the following points in mind to overcome these challenges.
- Work only with people you trust. Bad associates or suppliers can destroy your business. Avoid this problem by working with people you trust.
- Always make sure that you have sufficient funds before proceeding. Many startups fail due to lack of funds. To avoid debt or bankruptcy, don't go ahead with the idea if you're short on funds.
- Willing to make changes. Even if you are successful in starting a business, the market around you will still change. To stay competitive, adapt your business to these changes.
- Rise from failure. Many startups fail. You have to understand that failure is not the end of everything and you can continue your business with better ideas and bigger costs.
Step 7. Determine whether your plan will work or not
After all these steps, you have to make a final decision as to whether your plan will work or not. In evaluating and deciding on it, many components must be seriously considered.
- Consider all the results of your interviews and surveys. Is there a market for your business plan? Be objective in doing so and don't convince yourself to go ahead with the plan if only a few people are interested. If people aren't interested in buying the idea or product, look for other business ideas.
- Determine the level of competition you have. If the competition is tough, you have to work hard to beat it. Take the time to define a strategy for doing so.
- Make a cost analysis of your business plan. Even if there is a good market, you still have to find out if the idea is economically viable or not. You may have to reconsider if the startup and operation costs are very high. Also think about the source of funds, the total budget of the plan, and the expected benefits. Read How to Perform a Cost Analysis for more information on this subject.
Step 8. Sort your ideas
If you have more than one idea, rank them from best to worst. Analyze the ideas using all the previous questions and calculate the probability of success. Then, rank the ideas starting with #1 as the best. That way, you can ensure that you focus your efforts on the best ideas. The ideas at the bottom of the sequence must be removed or upgraded before they are implemented.
Part 3 of 3: Realizing a Business Idea
Step 1. Choose the best idea
After carefully evaluating and considering the various ideas you have, decide on the best one. You should focus your efforts on the idea. After selecting the best idea, start implementing the steps to make it happen.
Step 2. Determine the business structure
Businesses can be created with various structures and each structure will affect your business planning and legal status. Some of them are sole proprietorship, limited liability company, and corporation. Look for detailed information about it and determine the best structure for your business.
Step 3. Develop a business plan
Once you've decided which idea to focus on, you'll need a business plan. The business plan will define the identity of the company, the services it offers, and project its costs and potential revenue. Not only will this help you to focus and organize your ideas, but it will also help investors to see how much profit your business might make.
Step 4. Find funding for your business
Business ideas cannot be implemented without funds. After creating a business plan, you must present it to investors to get capital to start a business. Capital can usually be obtained through two options: banks and private investors. Both options have their advantages and disadvantages and you may end up using a combination of both.
- Bank. You can get a loan from a bank for several months to several years depending on the type of loan. These funds can be used for startup and operating costs for the first few months.
- Private investors. These investors can be friends, family, or other business owners who are interested in investing. Be sure to determine if these people only provide loans that you have to pay with interest, or if they actually invest in your company. It's a good idea, to prevent problems, draw up a contract that governs the agreement and validates the contract with a notary.
Tips
- Another option that can be done is to think of lots of wild ideas, but then evaluate them carefully during the elimination process.
- Don't be afraid to come up with some bad ideas. You may have a lot of ideas that can't go on until you actually find one that can be developed. The key is persistence.
