What Is a Business Idea (and Tools for Execution)

In economics and management, the concept of a business idea was formulated by Swedish economist Richard Normann, who defined it as a “system of coherences that enables a business to dominate a market niche and to carry out concrete actions.”

In this definition, coherence is the fundamental attribute of a project’s feasibility. Let’s break it down into its key components:

• Product system: what you want to sell
• Market segment: who you want to sell to
• Internal (and external) resources: how you’ll produce it

Read the full article on the Huky blog: “Idea Generators for Business”

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The Product System and Required Resources

The product system defines the business idea and is expressed in the value proposition—the offer that a company presents to its reference market. Entrepreneurs must consider several key aspects of a business idea:

• Technical feasibility: How can the idea be implemented? What methods, materials, competencies, relationships, and financial resources are needed?
• Level of innovation: Does the product meet new needs, solve problems differently than competitors, or explore untapped features or customer segments?
• Sustainability: Increasingly vital, this includes not only environmental sustainability (e.g., green economy) but also social impact (e.g., involving disadvantaged labor groups).
• Profitability: Often overlooked, financial analysis is crucial. Once launched, revenue from the product or service must exceed its production and sales costs.

To bring the idea to life, entrepreneurs must leverage their resources and skills, including:

1. Tangible resources (technology, spaces, facilities, equipment, etc.)
2. Financial resources (personal funds and third-party financing)
3. Team skills for executing the idea innovatively
4. Relational abilities with suppliers, customers, and stakeholders

High-value skills should be rare, hard to replicate, and usable in an organized way to generate strategic value—both individually and collectively, explicitly and tacitly.

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The Market Segment

The market segment defines the target customers for your business idea. Who will buy the product or service?

Key elements to analyze include:

• The needs to be fulfilled
• The potential customer groups
• The unique benefits offered versus existing market options
• The current and potential competitors in the field

Market analysis is the most important step when evaluating a business idea—more so than feasibility or resource availability.

To succeed, a startup must identify or create a target market willing to buy its offering. At this stage, competitor analysis becomes crucial—more on that in this article.

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Conclusion

Transitioning from idea to business requires essential assessments and strategic planning to avoid wasting time and money. This is the first layer of risk mitigation every entrepreneur should implement to enable smoother execution. Startups typically follow a circular path—build based on the idea, test hypotheses, learn from mistakes, then iterate to refine both the value proposition and internal processes.

Read more: “Business Idea: All the Steps to Make It Real” on the Huky blog

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Do you have a business idea and want to make it real? Reach out at scrivimi@huky.it