I was in Thailand last week meeting with an owner of a software development company looking for ideas for his small business that he started recently. He formed his company with the plan to first do projects for one main customer. It was becoming clear that he would need to add to his business to meet his forecast. One of the benefits of starting your own business is that you can adjust the business to respond to market conditions. I took him through the approach that’s covered in my tutorial on how to start a business. There are a few general principles when looking for new markets for business.
Start a Small Business: Innovation
Most people think of innovation as the main way to create a small business. I’m not sure of that; I believe that there are no original ideas. Most ideas are iterations or combinations of previously existing concepts. While there is no direct path to finding the perfectly innovative good or service, here are a couple of ways to start:
- Look at the space between existing goods and services and see what you can offer as a combination or to bridge the gap between them. Examples are Bluetooth using radio to connect peripherals, the Segway using gyroscopes for electric transportation with a small form factor, even the toaster oven as a cross between the large energy demand of an oven and the need to heat something larger than toast.
- Deeply understand a customer base to find unmet needs. This is the way that new twists on businesses come about. As retail examples, Staples and Zoots respond to different ways that customers wanted to procure goods and services in their industries.
Start a Small Business: Iteration
A very common source of ideas is to take an existing idea and improve upon it. You may have experience with a product or service that you find frustrating. Is there a way to make it better? Can you do it? Can you make money at it? Countless examples exist. The Toyota Production System created by Shigeo Shingo partly uses this as a way to continuously improve their products. The short life of the internet has already allowed us to bank and communicate in ways that make our lives much more productive.
Start a Small Business: Copy
“Imitation is the sincerest of flattery,” was a term created by Charles Caleb Colton, an English writer in the early 1800s. I’m not suggesting to exactly copy another business concept, but I’d certainly look at what’s working and how you might apply it in your area. Applying goods or services in use in one area to other areas is a common approach. An example of this is that clinical laboratories usually implement newer technologies before veterinary clinics or environmental labs. Offering unique goods or services along a common theme is another. This could be selling furniture or jewelry from a specific area of the world.
The owner and I ended up using a combination of approaches. He had experienced frustration with a particular product and could see how his business might be able to make it more valuable to their customers. This became a larger conversation about where this general situation might exist in other industries. We left with the agreement to do some research on some specific products to see if a business offering would hold any potential.
I’m sure that there are other ways to find great concepts. Share how you find ideas to start a small business.