You may have considered the prospect of starting your own business many times before. The thought of being your own boss – calling the shots, being responsible for your own financial rewards – is very alluring. You may have had the drive, the experience, and the financial resources necessary to succeed. The only thing stopping you were figuring out what type of business you should start.
If this sounds familiar, you are in good company. Most entrepreneurs take a considerable amount of time investigating, analyzing, and agonizing about the right type of business for them. They may have a multitude of ideas, but are unsure which one of them would be the most satisfying and successful. The opposite is equally common: they do not have a business idea, but know they want to be an entrepreneur.
How do people come up with ideas to start business and how do they know if an idea would make a good business?
Identification of Business idea:
Business ideas come from three main sources:
(i) Copying existing businesses.
(ii) Identification of needs that are inadequately fulfilled by existing businesses.
(iii) Entirely (innovative) new products and services.
(i) Copying existing businesses
This is perhaps the most common way by which many people in Tanzania start their businesses. They observe what others are doing and try to do the same. Such businesses are also known as “copy cats”. The assumption is: If others are making money out of this activity, why not me? The result is that sectors that are easy to enter tend to be extremely crowded and therefore unprofitable.
(ii) Identification of needs that are inadequately fulfilled by existing businesses
Often business ideas are generated from a problem in the market place:
• A group of people have needs that are not being properly satisfied - This leads to an idea for the solution to the problem - If the idea can be proven to be viable, a business opportunity has been created.
• Many famous businesses have been started because an entrepreneur solved a problem by turning it into a successful business. The problem was treated as an opportunity. To become an entrepreneur who can recognize business opportunities, ask yourself such questions as:
o What frustrates me the most when I go to buy something?
o What product or service would really improve my life?
o What makes me particularly annoyed?
o What product or service would eliminate that annoyance?
• Personal frustrations. Sometimes, one finds it difficult to obtain certain products or services that one badly needs. Sensing that other people might be facing the same problem, one takes the personal need as a business opportunity
(iii) Entirely new products or services
Some people have the capacity to see beyond the small gaps between what is on offer and the varieties and qualities that potential customers or markets need. Such people come up with completely new business concepts. Such business ideas can come from serendipity, or careful analysis of economic, and social changes, (video rentals, conference centers, etc. were completely novel when they were first introduced).
“Entrepreneurs imagine what they want and then create it”
Businesses also come into existence when entrepreneurs fantasize about products or services they wish existed. You can jump-start your imagination by asking yourself (or your friends) questions like the following:
What is the one thing you'd like to have more than anything else?
What does it look like?
Or taste like?
What does it do?
As an entrepreneur, you must learn to look at situation from a whole new perspective. You must look beyond what is there and imagine what could be there. The possibilities are endless. The opportunities surround you/us. The challenge is to learn how to recognize problem and visualize solution. How? Brain storming with friends and family, or shed your barrier and think positively.
Other sources of business idea can be from the following:
• Reading of brochures, newspaper, magazines, books etc.
• Attending trade shows
• Surf the internet
• Attending conferences
• Never stop learning!