The idea of starting a new business is attractive to a growing segment of the population. This includes ambitious university students who like the idea of being in control of their own destiny rather than being at the mercy of an uncertain job market. It also includes downsized corporate executives, stay-at-home spouses and people who are frustrated with their current jobs. Yet in order to start a successful business, you must first have a viable idea.
Very often, your first idea for a startup turns out to be less practical than you originally believed. To use a typical example, people who enjoy relaxing in their friendly neighborhood cafes often think, “owning my own coffee shop would be the ideal business for me.” But when they start crunching the numbers and look at the start up costs, demographics and likelihood of success, they realize that it wasn’t such a great idea after all. So where do you find profitable ideas for a startup, assuming that you don’t have a great deal of capital to invest? Here are some possibilities.
Look at your existing skill set
This may be your former career, your college major or your favorite hobby. When you know a great deal about something and/or you are passionate about it, your chances of success are far greater than if you have to learn everything from scratch. Of course, some types of knowledge are more marketable than others.
When considering your skills, talents and interests, take inventory and consider what sort of activities and areas of knowledge that have fascinated you since you were a child. Areas where you’ve acquired some degree of mastery are the best candidates, but even a strong interest can be a good starting point for a business.
Seek potential partners
Sometimes it’s advantageous to start a business with a partner who can supply something that you are lacking. This could be capital, experience or a certain type of specialized knowledge. Partnerships must be entered into with extreme care, as all parties must bring value to the new business.
While it’s possible to actively seek out a partner by networking or even advertising, it’s generally better to work with someone you already know. Business partnerships have been compared to other close relationships, like marriages, and they can be volatile and stressful as well as fun and profitable. That’s why you should make sure you’re truly compatible with someone and that you agree on all terms before entering into a partnership. Those caveats aside, however, a partner can help you propel a new business to success faster than you could on your own.
Identify a need, desire or problem
It’s a cliche of business that solving a pressing problem will make you a fortune. This is true, but only as long as you have a solution that can be translated into a product or service that can then be offered at a price point people will find acceptable. People have all kind of problems, from lack of time to physical ailments to difficulties in their relationships.
Thinking in terms of filling a need, desire or solving a problem expands your possibilities. After all, many companies have made millions by giving people things they don’t need or solve any monumental problems. Sometimes it’s enough to make people laugh or entertain them for a few minutes. Everyone has a desire to be diverted and entertained. That’s why a great business idea only has to fill one of those gaps, not necessarily all three.
Differentiate YourselfEven if you’ve found something that you’re good at that solves a problem, fills a need or fulfills a desire, you still have to demonstrate how your business differs from the competition. It’s extremely rare to have a business with no competition, which is why so many business leaders stress the importance of having a unique selling proposition.
Your USP does not necessarily have to be something earth shattering. It can be something subtle, quirky or apparently trivial. It doesn’t even have to be something unique. It could simply be an aspect of your product or service that you are emphasizing more than the competition.
These are some of the characteristics of workable business ideas. Ideally, you should incorporate several of these points in your plan. For example, if you’ve come up with an idea for a product that serves a pressing need, you’ve found a unique angle that will make your business special and you’ve found a compatible partner, you will have considerably improved your chances of success.
Starting a new business is both an exciting and challenging endeavor. Remember that your customers and clients are only concerned with what your business can do for them. That’s why your number one priority must be delivering something that your market cannot readily obtain elsewhere.
Shawn Porat is the CEO of Fortune Cookie Advertising, a non-traditional and out of home media placement company selling advertising space within fortune cookies at Chinese restaurants throughout the United States.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.