Dreaming of being your own boss but not sure how to come up with a business idea will bring turns those dreams into reality? In a study conducted by Incfile, we found that close to three-quarters of Americans have come up with one or more business ideas.
That doesn't mean that everyone has what it takes to be a successful entrepreneur, but it does mean that there's potential in abundance, as business ideas are available to anyone with the creativity to dream big and the gumption to make it happen.
Key Elements of a Good Business Idea
Wondering what makes a business idea good or even great? Here are the elements you need:
Market Demand
Is there a need for a particular product or service in your market? More importantly, will people want to buy what you're selling? We spoke with Ivana Taylor, publisher of DIYMarketers, and she told us how critical it is to assess market demand. "If you're going to launch a new business idea," she says, "the first thing you have to do is remind yourself of the criteria of a solid idea: that there is demand (people are talking about it, searching for it, buying it, etc.)."
How do you determine there's adequate demand for your idea?
- Poll friends and family to find out if there's a real need or desire for the product
- Research the competition to learn more about their strategies and how they interact with consumers
- Listen in to your audience on social media or in online forums like Quora or Reddit
Wondering if having competition is a good thing? According to Taylor, "YES, you want competition because that tells you people are selling products and services around this topic area."
If there's not much demand for your product or service idea within your market, consider looking outside the market (e.g., moving to e-commerce instead of a local brick-and-mortar).
Clearly Defined Goals
Every solid business idea has to have equally solid goals. Simply saying you want to succeed isn't enough — you have to nail down the details and make sure every goal for the business is SMART, which stands for:
Specific: "Make money" is not a specific goal. Instead, elaborate on your goal, determine how much you'd like to earn, and outline when you want your business to start turning a profit.
Measurable: Every goal should also include a way to track or measure your progress. It could be monetary, but it could also be based on the number of customers, website visitors, or newsletter subscriptions your business gets.
Attainable: We'd all like to be multi-millionaires, but is that something achievable in the near future? Maybe, but most likely not anytime soon. Be certain that the goals you set can be accomplished so you don't get discouraged.
Relevant: Your goals should all be relevant to your business. If you're starting out selling one product and you want to make that a success, you probably don't want to make one of your goals creating a prototype for a new, unrelated product (at least not yet).
Time-bound: Whatever your goals are, you'll want to set a time limit on them. This keeps you motivated and gives you a framework in which you can do your best work.
Thorough Strategy
Every successful business started with one thing in common: a great business plan. A business plan is your roadmap to guide your business to its ultimate destination. But if your business ideas don't include a strategy, they won't go far. If you're building a business plan for your idea, here's what it should include:
- An executive summary of the business
- A list of your goals as outlined above
- A big-picture description of your business idea
- Any relevant market research you've conducted
- Your planned or chosen business structure (such as an LLC)
- A strategy for marketing and sales
- Financial projections for at least five years
- Important documents and attachments
Still not sure what to include in your business plan? Use our convenient business plan template to put it together in a snap.
The Right Fit for Your Budget
Starting a business doesn't have to be a costly endeavor. There are tons of business ideas that cost less than $500 to start. You can even come up with ideas for $100 or less. However, your startup costs will vary based on the business idea you ultimately choose, so be sure you do your research and understand exactly how much cash you'll need to get off the ground.
Entrepreneurial Passion
In our 2023 survey of small business owners, nearly half said passion is the key ingredient for successful entrepreneurship. And a staggering 95% said if given the choice, they'd choose to be a business owner all over again. Passion really is the "secret sauce" when it comes to a great business idea. If your idea doesn't spark that for you, it might be time to move on to something that does.
How to Brainstorm Successful Business Ideas
Ready to get down to business? Here are some of our top tips for brainstorming fantastic business ideas that can turn into successful business realities:
List Out Your Skills and Interests
First, identify the skills, hobbies, passions, and knowledge you already have. This is your starting point, and any one of these could lead to a transformative business idea.
Passion is important, so make sure whatever you're listing is something you want to devote all your time and energy to for the foreseeable future. If there's something you've always wanted to learn or try, you can include that, too, but it's always best to start with something you've had some background or experience in.
Identify Problems You Could Solve
Next time you're watching TV or scrolling social media, pay attention to the ads you see. What problems are the products trying to solve? Can you think of a better way to solve them? Keep a running list of ideas and always have it nearby so you can add to it whenever creativity calls.
In addition, try creating a list of problems you encounter in your own daily life. What stresses you out, irritates you, or creates a barrier in your day-to-day? Brainstorm solutions for each issue — your business idea could be hiding in the answers.
Look for Gaps in the Market
Let's say there are five bars in your town, but no one is catering to the non-drinkers... yet. You see a gap and decide you can fill it by opening a mocktail bar. Your market sleuthing has just won you a great business idea.
Keep your eyes peeled for these gaps. Look for local businesses that are ignoring a certain portion of the market, or look at new, trending audiences that haven't yet been reached.
Seek Outside Input
Some of the best resources you have when starting out as an entrepreneur is your personal network. Ask your friends, family, or colleagues what kind of products and services they'd like to see and would be willing to spend money on.
Start off with casual conversations, or create a Facebook group you can treat as your own focus group. Take informal polls, or send out a short survey and allow your connections to vote on their favorite ideas.
Get Out and Explore
One of the best ways to generate business ideas is to get out there and discover the world around you. It can be as simple as taking a walk around your neighborhood or town center to check out how people live, work, and play.
If you're planning an e-commerce business, next time you're doing some online shopping, pay close attention to what motivates you to buy. Great photos? Attention-grabbing product listing? Think about what makes them so strong.
Conversely, also look at what makes you abandon your cart — is it a lengthy or difficult checkout process? Pricey shipping or processing fees? Consider a business idea that allows you to put your experiences and knowledge as a consumer to good use.
Refine or Improve an Existing Product
They say there's nothing new under the sun, so you don't have to come up with a brand-new idea in order to have a successful business. Instead, you can look for ways to make something already on the market even better. Consider the products you use on a daily basis — what complaints or frustrations do you have with them? Is there an opportunity to make adjustments that improve functionality? Or could you create a new product that enhances one that already exists?
Taylor says this is a great way to come up with an idea that already has market demand. "That tells you that the 'space,' the 'topic,' or the 'conversation' has legs," she says. "People are already aware, interested, and buying. Now all you have to do is stand out in some way."
Perfect Your Brainstorming Technique
Inspiration can come from anywhere, but it also helps to understand and implement an effective brainstorming technique. Here's how:
Get in the Right Mindset
It's in our nature to judge ideas, and we're likely to be our own worst critics. For truly effective brainstorming, leave your judgment at the door. At this early stage, don't worry yet if ideas are possible. Just focus on getting them out of your brain and make sure you write everything down. Set a period of time — around 10-30 minutes — and start a timer.
Start Fast
You don't need a lot of preparation or planning for brainstorming — just start jotting down whatever ideas pop up as quickly as you can. Focusing on speed also helps you abandon any judgment and ensures you'll end up with more ideas.
Aim for Quantity First
"Less is more" isn't true when it comes to brainstorming. At this point, you don't want the best ideas — you just want the most. Include every single idea — even the outlandish ones — and aim for a lengthy list. When your timer goes off, the brainstorming is done, so you'll want to get as many ideas as possible in that length of time.
Then Hone in on Quality
Once you've got a bunch of ideas, you can start going back and expanding on any that seem valid. Use the best ideas to spark even more creativity, and see where they take you.
Start the Process of Elimination
Your timer has gone off, and you have (hopefully) a really big list of ideas, thoughts, and rabbit trails. Start crossing off anything that jumps out as an unfeasible idea, then start narrowing down to the top 5-10.
Map Next Steps
Once you have a handful of good ideas, you can dive even deeper. Plan out your next steps, which may include researching the market for your top ideas, checking out potential competitors, or starting to work on a business plan. If possible, give yourself some time for the research phase, with the goal of settling on a single business idea by the end.
Hold a Brainstorming Session
There's no need to go it alone when it comes to brainstorming. Tap some friends and family and hold an informal brainstorming session. Gather your network in a room, and give them a specific prompt (e.g., "What types of business is our town lacking, or what businesses could be improved on?").
As you did for your solo brainstorming, set a timer, and write everything down — on a whiteboard, screen, or any place the ideas can be easily seen. Have your participants help you narrow down the ideas and eliminate any that aren't valid. Hold a vote if the consensus is split.
The Best News? Great Ideas Cost $0
Ideas are free, so put your brain to work and start cranking out those amazing business ideas. Once you've chosen your awesome idea, you can get started by forming a legal business entity, which protects and legitimizes your concept. Incfile can get your business entity formed for just $0 + your state fee.
Wendi Williams
Wendi is a freelance writer based in Indianapolis, IN, with over a decade of experience writing for a variety of industries from healthcare to manufacturing to nonprofit. When she isn't working on solutions for her clients, she can be found spending time with her kids and husband, working in the garden or doing more writing (of the fiction variety).
