Updated: Nov 3
Coming up with new business ideas can be challenging, especially if you feel stuck and don't know where to look for inspiration. However, there are many approaches you can use to pinpoint a killer product or service that customers will love.
With some focused effort and an entrepreneurial mindset, you can uncover world-class business ideas that align with your skills, interests and goals.
Whether you're trying to launch the next unicorn startup or just looking for some small business ideas, these strategies will help you level up along your path toward business ownership.
In this article, we'll discuss 5 helpful ways to generate business ideas and we'll also review how you can evaluate the value of whichever business idea you eventually want to pursue.
1. Draw From Your Own Experiences
Think about your daily experiences as a consumer, your passions and hobbies, the problems you encounter, and the solutions you’d like to see. What products or services would make your life easier? What’s missing from your favorite stores or websites?
Your personal experiences can be a jumping off point for pinpointing real business opportunities to serve currently unmet needs in the market.
For example, if you’re a busy parent who struggles to cook healthy dinners during the week, you may see a need for a meal delivery service or app that simplifies home cooking. Or if you’re an avid hiker frustrated by bulky gear, you could invent better backpacks or camping products.
Starting with your own needs and interests is a great way to uncover the rough outline for winning business ideas.
2. Observe Trends and Changes
In business, timing is a deciding factor in whether a venture succeeds or fails. The most obvious example of how market conditions can quickly destroy good business ideas is the recent pandemic. Covid was a curveball that took down unicorn dreams and small business ideas alike in 2020.
While global pandemics are usually once-in-a-century events, there are always less dramatic shifts happening in the market that can produce headwinds or tailwinds for your business venture. You can prepare yourself to benefit from these changes by paying attention to relevant shifts happening in the ecosystems most relevant to your skills and interests.
For example, let's imagine that your passions are pointing you toward a new financial services or energy business? Aside from considering the economic signals (like relevant buying patterns and industry growth rates) within those industries, you may also need to monitor political developments to ensure that your business idea won't get killed by changing regulatory conditions.
Think starting an online business idea will keep you immune from black swan events like a global pandemic? Think again.
The digital business landscape often has another set of variables that change more quickly and unexpectedly than what small business owners who run brick-and-mortar stores might otherwise face in normal market conditions.
Those variables could be changing algorithms on your most important social channels, copycat competitors from distant countries that are offering an identical product or service at a price you can't beat, and/or malicious actors who constantly try to take your website down or hack into the financial system behind your online store.
However, the key advantage of an online business is that you don't have to pay rent while you work out the kinks on how to profitably satisfy your target audience.
Regardless of whether you want to open a brick-and-mortar store or an at-home business, the market also offers positive developments that can support your entrepreneurial ambitions. When an entrepreneur properly perceives these factors, their product ideas can quickly lead to a successful business.
If you've already considered your own personal experiences and interests, you'll be able consider how relevant trends can turn your passions into profitable product ideas.
For example, movements like sustainability, work-life balance, and diversity/inclusion are impacting many industries.
Perhaps you could consult companies on green practices or diversity programs. The aging population presents opportunities in healthcare, senior living, and financial services. You may see potential in virtual reality, drones, 3D printing, or the gig economy. Current events and cultural shifts can lead to a eureka moment in everything from a food truck business to groundbreaking innovations within the beauty industry.
3. Solve a Problem
Falling in love with a lot of "good ideas" is the most common way that aspiring entrepreneurs get nowhere with their business ambitions. In business, it doesn't matter how many good ideas you have.
Wins and losses in business depend on finding the right idea. The right idea based on your skills and passions. The right idea based on existing market trends and customer needs. The right idea based on what the data says about your customer acquisition efforts.
It's not clear what a good idea really means. The right idea always solves some critical problem. This pursuit of the right idea is what informs a successful business plan for both small business owners and the Elon Musks of the world.
How can you train yourself to make the right idea your north star as a business owner?
Look at the problems you, your friends and family, or consumers in your target market face regularly. Avoid generic problems and focus on specifics, like finding the perfect local plumber or keeping track of medications. Broken pipes and forgotten medications are problems that produce disasters for everyday people.
Think through root causes and outline a step-by-step solution. Then, imagine alternatives to the status-quo that could make the most common problems within your target niche disappear.
For example, you might evaluate an app that helps people book trusted home services to solve their plumbing issues. On the other hand, you could consider a smart pill box that monitors medication intake for people who regularly forget about their medicine.
It's your job as an entrepreneur to reframe issues people have accepted as unavoidable. Approach them with the mindset that there could be an easier way.
4. Research Existing Companies in Promising Sectors
Market research can dramatically shorten the distance between ground zero of your entrepreneurial journey and your next eureka moment. Instead of trying to reinvent the wheel, you could guide some part of this market research by looking at what existing business leaders are doing to maintain or expand their company's market share.
Start by looking into successful companies, products, and services in growth sectors or your areas of interest. From there, you can identify gaps where a new business could compete. Think about how you could do things better, differently, or less expensively.
For example, in the pet industry, people may want more natural treats or toys tailored to their pet's specific personality. In education, parents may want supplemental programs focused on creativity or critical thinking.
Analyzing established competitors can reveal where customer needs aren't being met or processes are wildly out-of-date.
5. Brainstorm with Others
Once the creative juices start flowing, it's a great time to get out of your own head and start gathering outside feedback.
You can do that by discussing your ideas with knowledgeable people who can provide honest, constructive feedback.
In some cases, these could be friends when those friends actually fit the profile of a target market customer. This same target market customer criteria can also green-light your colleagues as helpful sources for relevant insights.
Mentors can point out flaws or limitations you may be missing.
Partners often help strengthen ideas and uncover opportunities. Determine if any contacts can provide technical, operational or financial resources to complement your skills.
Besides providing a reality check on your most off-the-wall ideas, discussing possible opportunities with the right people can open new pathways to business success that you wouldn't think of on your own.
Helpful Criteria for Identifying Valuable Brainstorming Partners
All business advice should be taken with a grain of salt. That's the first rule to remember when it comes to evaluating collaborators, advisors and prospective customer feedback.
In many cases, you should avoid the guidance of some folks altogether. It's likely that no one (or virtually no one) is building what you're building. Most people won't have ever built anything in the same niche as you. Many people won't have even built anything in the same industry.
The few people who fit any of those categories will be hard to find.
Out of the few who exist, some significant number of them won't want to share any advice. Some others might be afraid of competition if they're still running their business. A handful will be resentful that they've gone out of business and may give you overly pessimistic aded advice as a result.
Receiving advice is a mindful and you should consistently prioritize people who generally fit the above criteria of experiences. For instance, someone who has never been a business owner or lead operator at a company probably isn't a great sounding board for how you can build a functional business plan.
Creating an ecommerce business that will sell digital products? Use social media to network with those who have climbed the mountain of building a successful online store.
Need a tailored marketing plan? Go to marketing networking events and find professionals who have outperformed in your niche in the past.
In the meantime, here are some additional practices you can cultivate in your pursuit of billion dollar business ideas.
Turn Observations and Problems Into Business Opportunities
Carry a notebook or voice recorder to capture intriguing concepts as you go about your day. Make a list of things that annoy you and brainstorm ways to solve them. Set aside time each week to read industry publications and notice interesting tidbits.
Tackle problems from different angles, like how they could be solved with an app versus retail store.
Look beyond the obvious solutions. With consistent idea generation focused on solving customer problems and unmet needs in innovative ways, you will discover promising opportunities.
Evaluate Business Ideas Using These Criteria
As ideas start flowing, you need to evaluate their viability and select ones to pursue. Assess each concept using the following criteria:
Solves a Real Problem
Does it address a specific consumer frustration or need?
Is this problem currently unsolved or lacking solutions?
Will solving this substantially improve people's lives?
Target Market Appeal
Is there an identifiable audience likely to buy this?
Does research show this audience has interest and ability to pay?
What percentage of people surveyed said they would purchase this?
Are there competitors or alternatives in the market?
Does this provide something unique, better, or cheaper?
Can you find a profitable, defendable niche in the industry?
Your Skills & Passion
Does this fit your background, abilities, and interests?
Are you willing to invest significant time and effort in this idea?
Does it align with your goals and vision for a business?
Financial Viability & Growth
Can you clearly explain how this will make money?
Does projected income exceed estimated expenses?
Can you scale this into a bigger successful company?
Is there potential for a unique, profitable niche?
Research Your Best Concepts Further
Once you’ve singled out your strongest ideas, do more in-depth research:
Conduct surveys to validate demand and interest. Would people buy this? How much would they pay?
Interview industry experts to get objective insights on your concept’s strengths and weaknesses.
Analyze competitors and alternatives to see if you can create something better. Make sure customers have pain points that aren’t yet solved.
Develop prototypes or demos to test functionality and get user feedback.
Create pricing models and financial projections to assess profitability. Make sure the opportunity is big enough.
Review legal/regulatory issues to avoid roadblocks, especially with highly regulated products/services.
Thoroughly researching ideas gives you confidence to move forward and start planning next steps. You may even uncover ways to improve or reframe an idea to increase success.
Success Requires Persistence
Coming up with a winning idea is often the first step in a long entrepreneurial journey of refining, researching, networking, and reworking concepts. Not every idea will be viable, but don’t let that stop you. Keep generating possibilities and evaluating them objectively against your criteria.
Stay focused on solving real problems for real people. With tenacity and creativity, you will eventually land on a great idea that checks all the boxes. Remain curious, open-minded, and enthusiastic. With the right mindset, tools and support network, you can identify an exciting, profitable business model.
The creative well of ideas inside you is far deeper than you may think. Dedicate time to unleash it, capture promising concepts, research thoroughly, and bounce off people you trust. Before you know it, you’ll go from wondering “What business should I start?” to seeing the perfect opportunity to launch your own successful company.
Tips for Generating Innovative Business Ideas
Coming up with that spark of an idea is just the beginning. To develop it into a strong, viable concept, you need a systematic approach for producing and evaluating new ideas on an ongoing basis. Here are some tips to spur your creativity and generate innovative business ideas:
Make idea generation a habit
Set aside dedicated time for brainstorming every day or week. Ideas often arise when you make conscious space for them.
Vary your inputs
Expose yourself to diverse perspectives by reading industry publications, browsing online forums, or having conversations with people outside your field. Cross-pollination sparks new connections.
Don’t take things at face value. Ask “what if” and analyze where flaws might exist or improvements could be made.
Identify patterns or themes across multiple ideas and explore ways to blend them into one stronger idea.
Refine through iteration
Treat idea generation as a process, not a one-time event. Build on ideas by continually tweaking, testing, and getting feedback.
Believe in your ability to come up with innovative ideas. Don’t let failures or false starts erode your creativity.Following a structured system for producing new ideas regularly significantly raises your chances of landing on that one big idea that could be your next breakthrough.
Customer Discovery Will Help You Pick A Winning Business Idea
One of the most effective ways to evaluate your business ideas in the early stages is to run customer discovery interviews with potential target customers.
Start by recruiting 8-10 participants that match your target customer profile. Offering a small incentive like a gift card can help secure their time. During a 60-90 minute session, present your idea and have participants complete exercises like:
Ranking the appeal of different product/service features
Critiquing preliminary branding concepts
Describing their emotional response to messaging
Building out their ideal customer journey
We've also written up a blog to help you run successful customer discovery projects. In that past blog, we discussed why customer discovery is the business success launchpad and how it helped GM dethrone Ford as America's most famous business in the 20th century.
Validate Demand Through Surveys
Our experts at Venture Validator prefer to start the idea clarification process by running surveys. This approach allows you to gather qualified customer feedback at scale and then pinpoint which members of your research population are most qualified to meet you for private interviews or focus group sessions.
It's best to run surveys before you have a product idea in mind. In this ideal situation, you may only need 10-15 multiple choice and short answer questions about how qualified target market members are currently buying / pursuing solutions within your business sector of interest.
You can distribute your survey through social media ads, online forums related to your business idea, and email lists to drive responses. For an easier tier gathering these respondents, you can also turn to panel providers like Prolific.
Struggling to gather completions on your survey? It can help to an incentive like gift cards or PayPal transfers to your research subjects in order to reward them for their feedback.
Aim for at least 100 survey responses to get statistically significant data.
The key is asking very specific questions that validate assumptions about your target customer, their desires, pain points and buying factors. Avoid overly broad questions that don’t provide actionable data. Want some advice on how to structure your questions so they are as effective as possible, check out this previous blog on the subject.
The quantitative survey results will reveal if your idea has merit and potential market viability. From there, you can run experiments to ensure that your new business idea will inspire prospective customers to take real buying actions toward your product or service.
Secure Buy-In from Potential Customers
In addition to surveying a broad audience and consulting experts, also speak directly to a few carefully selected individuals who perfectly match your target customer profile. Have in-depth conversations focused on truly understanding their wants, needs and pain points when it comes to your business idea. Resist the urge to “sell” them or influence their feedback.
If these customers validate your belief that your proposed product or service would significantly enrich their lives, secure their buy-in to become early adopters. See if a handful are enthusiastic enough about your concept to make a deposit or reservation for the future purchase. This tangible demonstration of demand from real potential customers can help attract investors.
Create a Minimal Viable Product (MVP)
Rather than investing months of time and money building a full-fledged product or service, start by creating a minimal viable product (MVP) to test fundamental assumptions and get real user feedback quickly. An MVP is a stripped down, basic representation of your concept’s core features and benefits.
For example, instead of finalized software, initially demo the user interface and experience. For a physical product, show 3D renderings or a rough prototype. For a service, outline your customer journey. Develop an MVP that requires minimal time and resources but conveys the essence of your idea.
Let a small group of objective users interact with your MVP and provide qualitative feedback through surveys or interviews. Are their most essential needs met? Did they understand the value proposition? Observe how they use it.
The goal is to validate you are headed in the right direction before committing fully to development. Incorporate improvements into the final product based on user input.
Define Your Competitive Advantage
Once you have pressure tested a business idea thoroughly and confirmed its appeal, compare yourself to competitors to determine potential advantages. How are you positioned to provide greater value, lower costs, or both? Specifically document your competitive edge so it drives all aspects of your strategy and messaging.
For example, your competitive advantage may be proprietary technology that improves efficiency, signature design that enhances the user experience, or exclusive partnerships that reduce supply costs. Perhaps your personal expertise allows customization that competitors cannot match.
Knowing exactly how you uniquely solve customers’ problems is key. It allows you to stand out in a crowded market and justify why people should switch from incumbent providers. A compelling, sustainable competitive advantage also makes your company more resilient and profitable.
Start Building Your Advisory Board
Surrounding yourself with the right people is crucial during the earliest phases of developing your business idea. Start forming an advisory board made up of mentors, experts and partners who bring essential outside perspective and guidance as you solidify your plans.
Look for an experienced entrepreneur or executive in your industry who can act as a trusted mentor. Partner with technical, marketing and operations pros who have strengths you lack. Seek investors with expertise relevant to your concept. Gaining regular advice from your personal advisory board helps you navigate challenges and blind spots.
These advisors play a critical role refining your business model, troubleshooting issues and making connections. Keep them updated on your progress and ask for targeted help related to their expertise whenever you get stuck. Their support early on lays the foundation for success.
Prioritize Speed and Flexibility
In the early stages of developing a new business idea, speed and flexibility are critical. Resist over-planning or trying to perfect things before acting. Launch a basic MVP faster to quickly gather real user data to inform strategy. Remain nimble, so you can easily adapt or pivot based on feedback.
Sticking doggedly to a protracted master plan wastes valuable time if key assumptions aren't sound. Move rapidly through cycles of prototyping, testing with users, learning and refining. Work lean, only hiring staff or building capabilities as immediate needs arise. Limit upfront spending and fixed assets.
Maintaining flexibility allows you to respond swiftly as market conditions and user needs shift. Build processes centered on speed, efficiency and continuous improvement. By launching fast and staying nimble, you can rapidly evolve your minimal viable product into a high-demand solution.
Know When to Pursue Your Vision
Launching quickly with a streamlined MVP has advantages, but balance speed with conviction. In certain situations, take your time to fully develop an ambitious idea. If you have solid evidence your visionary concept solves an urgent problem in a novel way customers want, don’t compromise it prematurely to conform to “lean” principles.
Many legendary companies like Apple, Netflix, Starbucks and Tesla pursued bold, multi-year innovation driven by conviction despite initial uncertainty and risks. They didn’t hastily launch stripped-down versions of their vision just to get a minimum viable product to market faster. They took the time necessary to revolutionize user experiences and upend industries.
Pursuing transformative innovation is worth the risk if your entrepreneurial homework reveals widespread customer demand and buying interest within your area of business interest. Beyond that homework, you'll still need to continually test assumptions and iterate on your business concepts according to how the market actually reacts to your live business experiments.
With the right balance of conviction and flexibility, revolutionary ideas that require more nurturing can come to fruition.
Summary: Finding the Right Idea & Plotting Your Next Steps
As new ideas start flowing, you’ll need a process that pinpoints the right idea to pursue. Assessing your ideas against objective criteria will help you determine which have the greatest potential. Here are some key factors to consider when evaluating your business ideas:
Does the idea align with your interests, abilities, and experience?
Solves a real problem
Does it address a specific, urgent customer need that’s currently underserved?
Are there enough potential customers with the willingness and ability to pay for this?
Does the idea provide something new and differentiated versus alternatives?
Can this be self-funded at the start or will significant capital be required for development?
Realistically, can this generate significant profits within a few years?
Does the business model allow easy expansion into new markets or products?
Conclusion: Finding Good Business Ideas is a Process
By objectively grading your ideas against criteria like these, you can weed out any that may initially seem intriguing but don’t have real substance or commercial viability. Evaluating ideas upfront before devoting significant time and resources to them is a critical step toward launching a successful business.
Want more help as you go about establishing your business? Feel free to book a free introductory call with one of our market research experts. On that call, we'll discuss what you're building and how our services can help fuel your company toward its next major business milestone.