There's no doubt that successful businesses start with brilliant ideas. After all, in today's fiercely competitive environment, innovation is the ammunition entrepreneurs need to stand out in the crowd.
Many newcomers to the business world may assume that starting a new business is necessarily linked to an invention. And although this may play an important part in some pioneering companies, most business concepts are in fact all about tweaking existing ideas – or finding new ways to do old things. For example, a company selling a Web-based customer service monitoring tool is simply improving on the long-accepted premise that successful businesses have to keep an eye on their customers' needs.
However, finding the right niche, based on what you do best and the potential market situation, demands both careful planning and research. Even the best products may not necessarily find buyers because markets change and customers are fickle.
There are no clear recipes for starting a new business, but here are a few guidelines that can help you get going in the right direction.
Look for windows of opportunity
Astute observation is your best ally when looking for unique ideas. Start by assessing exactly what you do well. It's a much safer bet to venture into familiar territory where you can use your existing strengths. For example, if you work in the pharmaceutical industry then you could branch out in the health care field.
Here are some helpful hints:
- Do what you're passionate about. Enthusiasm ignites the interest of lenders. Choose ideas that enable you to act now. You need to move swiftly before your idea fizzles.
- Be specific about your business goals. For example, you want to reach this specific market with a specific product.
- Look around you for windows of opportunity such as taking over a family business.
- Start a business doing something that your existing company isn't doing.
- Keep your eye on the franchise market.
- Read business publications and stay informed of growth areas. For example, the rapidly changing health sector, fueled by the explosion of biotechnology, provides endless business opportunities.
Find your market niche
The marketability formula for any product or service involves a myriad of factors, including the design, features, benefits, price, margin, safety, serviceability issues, image, durability, packaging, incentives and sales volume projections.
Apart from patenting inventions, you can assess these possibilities for product development:
- New product lines that are absolutely new to the market and enable you to create your own niche, revolutionize or create markets
- Product revisions/replacements that enable you to build on your existing product line
- Repositioned products, that uncover new applications for your products or new customers for current products
- Imitative products that copy those produced by others, but where there is a market for many competing versions
Use the following as a quick checklist when defining your market niche:
- Look at the needs of your prospective customers. Ask yourself: how will your business meet those needs? Identify unmet needs.
- Examine your customer's desires. A market need could also be a deficiency, for example, a product that lacks post-sales service.
- Remember that people buy things to solve a specific problem. What problems does your product or service solve? Does it make your customer's life simpler?
- Define your customer clearly: What exactly is my product or service?;Who exactly is my customer?; Why does my customer buy?; How does my customer define value?; What makes my product or service superior to that of my competitors?; What is it that my prospective customer does not buy?; Why does my prospective customer buy from my competitor?; What value does he/she perceive in buying from my competitor?; How can I offset that perception and get my competitor's customers to buy from me?
Present your idea with a strong business plan
The next step is to take your creative thinking and put it on paper. A business plan is your tool to sell your idea to lenders, investors and shareholders. Lack of clarity, poor information, and the absence of a strategic orientation are the main deficiencies in most business plans. Of the maximum 10% of business plans that are given serious consideration, two thirds are rejected after analysis. Make sure you allow time to put a plan together with all the appropriate details, such as positioning, market analysis and financials. Projects developed with the help of an expert in the target market get the best reception.
Get yourself a mentor
Getting a business off the ground is not an easy task. Many projects never amount to much because they are not taken seriously, or because they lack adequate follow-up or support. You will increase your chances of success considerably by seeking advice from someone with business experience, often called a mentor. These business leaders provide management advice, suggest sources of financing, and frequently offer their young protégés internship opportunities to hone leadership qualities in the field.
A number of junior chambers of commerce have mentoring programs designed to facilitate contacts between business leaders and project developers. Local economic development centres and some business leaders' associations offer similar sponsorship programs.
Get the right financing
BDC offers start-up financing to entrepreneurs. You may also be able to postpone the principal payments for several months.
This solution specifically targets businesses in the manufacturing, distribution, services and tourism sectors.
The business solution specifically You may want to look at these federal government financing programs.
Content in this section is provided in partnership with the Business Development Bank of Canada. BDC provides entrepreneurs with financing, venture capital and consulting services. To find out more go to BDC.ca.