How to find a business idea is a challenge that a lot of people face, but it’s not necessarily as hard as people make it out to be, especially with the 5P Framework.
This is a pretty common question, so I’ve included a section about it in my free guide that I’ve created for you. For those of you who haven’t gotten it, pop over and check out my free guide on how to start your business. Let’s start with today’s topic and find out how to find a business idea.
When wanting to start a business, a lot of people get mesmerised by creating the next unicorn. It’s very enticing to want to be a ground-breaking startup such as Uber, AirBnB, SnapChat, Instagram, WhatsApp, and so on. However, that might not be the best way to start a successful business.
There are 2 main reasons why I say this. One, these are businesses that require huge amounts of resources to grow and scale. Just starting a business alone is a complete mindset and lifestyle change, especially if you’ve been working at a regular 9-6 job. For someone new to entrepreneurship, this might be way too much of a change to handle.
Two, these businesses have a hockey stick-shaped growth trajectory, but typically don’t see profits until much later (or if at all). Profits to a business are like air to a human. When you have a ready supply of air, you are able to function a lot clearer and better.
Hyper-growth is a whole new level that sacrifices near-term profits for fast growth. It’s a business model, but not something that I’d recommend, especially if you’re new to entrepreneurship and are still looking to build up your confidence and experience.
What Does A Business Mean?
A business is just a for-profit enterprise that’s all about the creation and provision of value to consumers.
Let’s look at a simple definition of what business means. A business is just a for-profit enterprise that’s all about the creation and provision of value to consumers. That’s it. Let’s break it down. You’re creating something for-profit, so you’re not doing charity, and you’re actually getting paid for creating value for people. It’s an important distinction because you’re not trying to scam people or rip them off. You’re looking at creating a product or service that people are actually happy to pay for because they perceive and obtain value.
There are many kinds of other businesses there are out there that create products and services that you’d be happy to pay for. These aren’t businesses that are typically headlining the news but are very successful in their own right. Some examples of businesses that offer products and services that we pay for in our daily lives include: barbers, gyms, watch repair services, food, computer repair services, website design services, and so on.
This was the way that I started my business, and it was incredibly simple. It’s not rocket science at all. Here’s how I did it, in 2 sentences:
I found a market need, which I knew because I was an actual customer and so I understood the industry. Then, I figured out a way to fill the market need using very logical steps to do so.
The business was profitable, almost from day one. Of course, it wasn’t a huge profit at the start, but it slowly grew. This is in huge contrast to a startup like Uber. As of October 2019, Uber is still losing money. A lot of money. However, with a startup like Uber, you might have the opportunity to create something that will revolutionise and maybe even completely change the way people live. For a lot of people though, that’s not what they are looking for. What most people want is to just create something that can add value to others, and allow people to enjoy a more fulfilling life.
I’m a huge proponent for people to start what I call as “realistic businesses” because it teaches entrepreneurship and shows you what’s possible. Your second business can be something much bigger. Elon Musk didn’t create Tesla as his first business. He programmed a simple game that he sold when he was 12, and later also ventured into organising parties to fund his university tuition. These are hardly close to the vision and resources that making space rockets would require. They are really good ways to learn entrepreneurship and getting income though.
3 Guidelines On How To Find a Business Idea
The question that you might ask is: how do I find a business idea? It’s not rocket science, and even the best entrepreneurs and venture capitalists don’t know for certain if an idea would work. However, there are three guidelines that you can follow.
First, avoid picking a shitty idea. What’s a shitty idea? If there’s no foreseeable monetisation strategy, or if there’s a very small total addressable market, or if there are a tonne of competitors and you have no or very low differentiation, then your business is likely to head into an early grave. I’ve got videos on entrepreneurship that talk about this, so check them out.
Second, having your business become a massive success should not be your main goal. I’m a proponent of picking a business idea that has got to do with your passion or rather is something that’s very well-suited to your skill-sets. The idea behind this is that you will be happy doing the work that your business requires so that even if it doesn’t become a huge success, it still becomes a win. This is covered in detail in the next section.
Third, when you do start on a business idea, you will find that it will always involve uncertainty. Sometimes, you might even pivot to do something else after working on your initial idea for a while. That’s all right because all businesses require continuous work in terms of refinement and reinvention. In fact, the only certain thing is that your business will never stay the same, so don’t be discouraged if you feel that you need to change things.
How To Find a Business Idea Using The 5P Framework
I’ve had many people ask me how to find a business idea, and I’ve come up with a framework to help people with this process. There are only 5Ps that need to be considered when you think of coming up with a business idea.
People face pain all the time, and they are always looking for solutions to prevent or avoid that pain. There are examples of pain everywhere. It can be physical pain, like a blister on your foot — in which case, maybe you know a home remedy that works really well. It can also be emotional pain, and maybe you’re really good with people and emotions and can provide a service there.
This is one of the widest areas that you can find a business idea. People have things that they’re interested in. I remember that I fell in love with snowboarding, and even went to become a certified snowboard instructor because of my passion for the sport. I also wanted to share that passion with others, so becoming a certified snowboard instructor was a great idea. If you have a passion, and it could be in anything from video games to knitting to playing the guitar, you can think of ways to form a business around that. The most straightforward is to teach that passion of yours to others.
Everyone has their phobias or fears. It can be a straightforward fear of insects or maybe it’s a fear of public speaking. Perhaps you’ve been through it and you’ve found a way to overcome that fear. Teach that and show that to others, because that’s a very valuable service.
There are problems all around us. Hailing a taxi, especially in a foreign country, can be quite a bother. Uber was created as a solution to that. Your business idea doesn’t need to be that big though. Maybe you have a problem at work that you always face — maybe it’s better presentation methods or a better project management software. These are problems that are great business ideas.
On top of passions, people develop proficiencies in skillsets over time. If you’re a professional, then you’re already in the business of service providing. You could be an accountant, consultant, lawyer. You could also have a vocation like a plumber, painter, or mechanic. Take your proficiencies and look at how you can start a side-hustle with it. Do it well and before long, you’ll be able to scale up your business.
How to Find A Business Idea
These can give you a broad idea of how you can find a business idea. Remember to check out my free guide for you that talks about how you can start a successful business. Let’s continue to have discussions through the comment section down below. I’d love to hear your thoughts and answer any questions that you might have.
- Amazing Guide To Starting Your Own Business (2020 Edition)
- 19 Reasons Why You Don’t Need a Great Business Idea To Succeed
- How to Start a Successful Business With Just $115
- 9 Tips On How To Survive A Financial Crisis As A Business
- Plan To Become Successful By Creating A Success Plan With Just 5 Steps