The best business ideas involve solving a problem, preferably with a unique solution. To come up with a great business idea, you’re going to need to become an idea detective, research business ideas, brainstorm solutions, and test your idea. Once you’re done, you’ll be ready to start a sustainable business.
Once you have a business idea you like, the next step is to determine if it’s viable and profitable. LivePlan makes it easy to create a one-page business plan using prompts, definitions, and video and text tutorials to help you define your customers, marketing strategy, and products and services you want to offer to help vet your business idea.
Here’s how to come up with a business idea in four steps:
1. Become an Idea Detective
To start looking for ideas you need to stop accepting the world as is and start viewing it through a lens of how it could work properly. Start noticing things that are wrong, causing frustration or inefficient. Imperfections are no longer things to ignore but opportunities for new business ideas. The goal here is to identify inefficiencies and pain points that you can solve in the marketplace.
“The way to get startup ideas is not to try to think of startup ideas. It’s to look for problems, preferably problems you have yourself. The next best thing to an unmet need of your own is an unmet need of someone else. Try talking to everyone you can about the gaps they find in the world. What’s missing? What would they like to do that they can’t? What’s tedious or annoying, particularly in their work?”
— Paul Graham, Founder, Y Combinator
Become an Observer of Pain Points
You should become a student of consumer behaviors. Instead of gliding through the day oblivious to problems, train yourself to notice things that are inefficient or ineffective. Start watching your family, others you see in public, at work or online. What are they complaining about? What do they ask for help with? In fact, you should start talking to people about their problems and how important they are. This will setup being in research mode later.
“The business idea came more from our private life. I’m very passionate about design and can spend a lot of time on it. But, even for me, it’s really difficult to find things to hang on the wall if you don’t want to get involved with real art and you maybe don’t have the necessary funds available but equally don’t want to just pop into IKEA. We had the feeling that there is a market for that. That’s how the idea for JUNIQE was born.”
— Lea Lange, Co-founder, JUNIQE
Start Making Lists of Pain Points
Not every problem is going to be the next best thing since sliced bread. So, just like a detective, start writing down everything. Start making lists of problems that you’re observing out in the world. Later, you can reflect and prioritize the problems to decide which are worth researching and then testing out.
“I was in San Francisco at a tech conference. It was the usual thing, tons of guys and very few women. I’m certainly not the first person to have noticed that. I started thinking about this topic, and it was really bothering me because I’ve been working in tech pretty much since the eighth grade when my school got its first computer. I loved it, and it’s something I think that more girls would like if they knew how much fun it was.”
— Lyssa Neel, Co-founder and CEO, Linkitz
Source: Ways We Work
2. Focus on Four Areas for Additional Ideas
When learning how to come up with a business idea, there are four key areas you should focus on (or expand on ideas from step one). These four areas include problems you have, problems others you know have, areas where you can synthesize other ideas and turning your job or other jobs into a business.
Problems You Have
This is going to be the best place to find ideas. You’ll be familiar first-hand with the problem. You’ll also be in a good position to think through what a good solution might look like. Look at problems you have in your personal life, problems you have at work and personal goals you’re having trouble reaching and how you might make them easier to achieve. An added benefit of finding a personal problem is that you can try out potential solutions yourself quickly.
“I was always frustrated. I was always very shy, and I felt scared to walk up to someone I was interested in and say hello. When I realized that if I knew that they liked me, it would take all the fear away — that was when the idea started. How can we figure out who likes who or who around me likes me without having them put themselves out there? You save yourself from an awkward moment.”
— Sean Rad, Co-founder and Chairman, Tinder
Problems People You Know Have
Beyond yourself, take a close look at problems that others around you are having. These could be family, friends, work colleagues, stores you buy from, service people you hire, and so on. When you see others having problems, dive in with questions. Dig into how frustrating the problem is, solutions they’ve tried, how much they’d be willing to pay for a solution and other details.
“One day, my wife was complaining about doing the bills. It struck me: Bing! Here’s something everybody has to do: pay bills. There are problems to be solved and computers are pretty good at doing the essence of financial work. Why isn’t there something to make people’s financial lives fast and easy?”
— Scott Cook, Co-founder, Intuit
Turn Your Day Job or Other Jobs Into a Business
Another common area for business ideas is turning your day job or side projects you work on into a full-time business. Are you a web designer, CPA, data analyst or logistics manager, for example, working for someone else? You may be able to offer your skills to other companies by hanging out your own shingle.
It might be offering services directly or some derivative service like teaching or coaching others to do the same. You could turn your expertise into a media company by starting a blog or creating an app to automate the process. In fact, it’s not uncommon for your current employer to become your first customer when you hang out your shingle.
”We’d set up WordPress sites, create forms and little lead gen things for them, and we’d often get asked to do a lot of API grunt work. A customer would ask, “can you get our PayPal sales into QuickBooks for us or get our leads coming from this WordPress site into our CRM or mailing list for us?” So, we’d write a little API code, set it up and it would work fine. The customers liked it and they’d pay us our rates. It was boring work but it paid the bills. Bryan came to me and said, “I think we can build a tool that productizes this API work we’re doing so that the end user could set this up themselves and wouldn’t have to come to a person like us.”
— Wade Foster, Co-founder and CEO, Zapier
Source: Ways We Work
If you don’t think turning your day job into a business will work, you can look at other jobs that are showing a lot of demand. The United States Bureau of Labor Statistics offers a list of the fastest-growing occupations. You might be able to turn these jobs into good business ideas.
Another angle on turning existing jobs into a small business would be industries that are growing. The top ones include home healthcare services, outpatient care centers and facilities support services.
Synthesizing Other Ideas
Another common source for business ideas is taking existing ideas and applying them to different domains. It could be something like “Uber for X” or “Netflix for Y.” You could also take ideas that are working in other locations and apply it to your area. It could be a great food truck idea you saw in California that hasn’t made it to the East Coast or a solution in another country that hasn’t made it stateside yet.
“The fastest way to generate themes and ideas is to take two different areas and combine them. The fastest way to master any area of life is to become good at two or more areas, intersect them in a unique way, and now you are the best in the world at the intersection.”
— James Altucher, Editor, The Altucher Report
Source: Business Insider
“Take a look at what the whole of the rest of the world outside of your industry is doing and see if you can find some piece of brilliance that somebody else implemented that you can be the first person to apply the industry that you are in. That’s what I noticed that the leaders of the industry do as they find great ideas in the world around them, and they adapt them to use in their industry before anyone else even see this.”
— Jeff Hoffman, Co-founder, Priceline
Source: Shoulders of Titans
3. Brainstorm Solutions
Even though you’ve identified a problem you may not hit on the right solution immediately. Spend some time brainstorming on potential solutions. Think through how you might produce a solution, how much it would cost, how you’d scale production, where you’d get supplies or where the people needed to produce it would come from.
Brainstorm on the pricing and revenue models that you might be able to use. How would you sell it to prospective users? Even if you identify a problem, it’s not useful if it’s not practical or cost-effective.
“The idea came from a personal pain point. Jen broke her crappy luggage one day and, when researching her options, realized she could either get more cheap, crappy luggage or really great luggage that was closer to $1,000 than a price that made sense. We dug into the supply chain and realized all those $1,000 suitcases were marked up wildly because of how they were distributed. We decided we’d make the best luggage in the world designed based on travelers’ true experiences and sell it exclusively direct to consumer.”
— Steph Korey, Co-founder, Away
Source: The Hustle
4. Validate Your Idea
If you’ve come up with a significant need in the marketplace and a potential solution, how do you know if it’s a good idea or not? You need to validate your idea with others. The most valuable feedback can be as straightforward as just talking to people. Try to get a feel for how much they’d pay to solve the problem.
You can also design tests based on wireframes or 404 tests of your solution. 404 tests are where you promote a web page describing the solution and have people enter their emails to get notified when the solution will be available for purchase. This can give you a sense of demand before building anything. You can also prototype a skeletal solution and actually try selling it.
“The best possible thing is if you can meet in person or get them to talk in a video Skype call because I think it’s really good to see reactions to the questions you ask them and facial expressions and everything. I think about what problems you have. Is it a really good question to ask because then you’re kind of avoiding talking about your solution you’ve already got? I think that’s what I like. That’s where you can go wrong easily. You ask them, “Would you use this? Would you use X?” Generally, people want to be nice and they say, “That sounds useful. I would use that.” You miss out on a lot of great information you could get. Instead, you just talk about problems that they have.”
— Joel Gascoigne, Founder, Buffer
The Bottom Line: How to Come Up With a Business Idea
Once you’ve come up with an idea, head on over to LivePlan. There you can create a one-page or complete business plan using prompts, explanations, and tutorials that will help you turn your dream into a reality.