Do you have a business idea you want to bring to life, but you’re unsure about your target market, who your customers or competitors might be? Or perhaps you’ve studied the context but don’t know where to start or how to make your project profitable. This can lead to discouragement and the (wrong) belief that your idea won’t succeed.
Don’t worry—you’re in the right place! Keep reading and take note of the essential things you need to know and do.
What Is a Business Idea?
The concept of a business idea was defined by Swedish economist Richard Normann as a “system of consistencies that allows a company to dominate a market niche and develop concrete actions.”
Practically speaking, a business idea is a mental representation of a product or service that can be used by a large group of people who are willing to pay to benefit from it.
At the foundation of every business idea must be a need shared by a significant group of people—one that your product or service can satisfy in a targeted and unique way. Examples of business ideas include:
- Online store in various sectors (home goods, clothing, flowers, furniture…)
- Digital product: e.g., if you enjoy sewing, you could sell patterns or mini online courses. If you play the guitar, you might teach lessons via online tutorials. Thanks to many existing and affordable platforms, you can easily turn your passion into a digital product.
Learn by Developing Business Ideas
Developing ideas is a creative activity that helps you build transversal business skills. Ideas don’t develop in isolation, but rather through conversations, testing hypotheses, and validating assumptions.
Some skills you’ll gain along the way:
- Will the project be profitable? You’ll learn to think about pricing, cost management, and financial planning.
- You’ll need to manage the project efficiently, prioritizing tasks and making the best use of your time.
- You must be able to communicate effectively with collaborators, customers, partners, banks, accountants, legal advisors, etc.
Developing a business idea is an incredible learning experience—like earning a real-world master’s degree.
How to Develop a Business Idea
When moving from idea to business, transforming abstract concepts into something tangible and profitable, ask yourself these questions:
- What problem are you solving? Write it down or sketch it out—your idea must be a solution to a real need.
- Who benefits from your solution? Describe your target audience and match the problem to this customer profile.
- How does your solution address the problem? Detail how your product or service meets the need.
The issue you’re solving should affect enough people to justify starting a business. Understanding your audience allows you to tailor a solution that meets expectations—like a custom-fit suit.
Also consider technology: your business should rely on existing technologies. Avoid ideas that depend on scientific or tech breakthroughs (unless you’re Elon Musk!), as they may be too difficult or slow to realize.
Read: 5 Steps to Launch a Startup
Preliminary Questions for Your Toolkit
Before diving in, reflect on some key questions that will guide your entrepreneurial journey:
- Do you need sector-specific skills or certifications for your business?
- Would investing in a training path help you gain the entrepreneurial and financial skills necessary?
- What are the different ways you could bring your idea to life?
- Where and how can you test your product or service to verify it meets a real need?
- How can you minimize costs?
- How can you increase revenue streams?
These foundational questions will help you build your personal entrepreneurial toolkit.
What Do You Want to Sell? Start from Your Offering
Once you’ve considered the above, focus on your offer. Think your product or service has great potential, but aren’t sure how to develop it?
First, define your product:
- Is it a new product or related to existing ones?
- What are its features? It should satisfy both functional needs (practical use) and emotional needs (sense of safety, satisfaction, well-being, etc.).
- What is your target market?
- What will it cost to make and sell?
- How long will it take to launch?
- How will you market and promote it, and at what cost?
- How will sales grow in year one and beyond?
If you can answer these clearly, you’re ready to develop your business idea.
Know Your Market: Customers and Competitors
Studying your market helps you develop an effective strategy:
- Who are your potential customers? Know them as if they were family. Understand their purchasing decisions, payment preferences, habits, and influencers.
- How many would pay for your product—and how much?
- Through which channels will you reach them?
- Who are your direct, indirect, and potential competitors? What are they doing? Are they expanding?
Deep knowledge of both customers and competitors helps you create a targeted and distinctive offer with better odds of success.
Some Economic Considerations
You must also consider practical financial aspects. Will you invest your own money or that of friends and family? Or seek external funding?
Types of funding include:
- Debt: borrowed money that must be repaid with interest (sometimes subsidized loans with low or no interest exist).
- Equity: investors buy shares in your business (e.g., investing €3,000 into a company with €10,000 capital = 30% equity).
- Grants: some programs offer non-repayable funds (no repayment or ownership exchange required).
Final Considerations
If you’ve made it this far, you likely have what it takes to develop your business idea and make it real. Now it’s time to test your offer: make it simple and easy to understand, present it to your ideal customers, and gather feedback. Critiques and suggestions are the building blocks of your final product.
Also consider protecting your idea with barriers to entry, like a unique skill, partnership, technology, or patent—anything that makes it hard for competitors to replicate.
Last but not least: build your team. People bring ideas to life. You can’t do it all alone. Find co-founders, collaborators, mentors, consultants—people who can support you at every stage of your entrepreneurial journey.
Bon voyage! (Yes, developing business ideas is a journey.)
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