Starting a New Business: The Big Idea

Origin of the Business Idea

The origin of the business idea is one of the most mysterious aspects of a new business. Remember the following about any idea for a new business:

• Always be on the lookout for ideas. They can come from anywhere: your work experience, a hobby – or even your experiences as a consumer when an existing product or service does not meet your needs.
• Identify a niche. Usually this opportunity area will be a proven idea in a new market or a unique idea in an existing market.
• Learn everything you can about the business you want to start and the marketplace you will be operating in. This means getting work experience and collecting information so you will know the market inside and out.
• Make sure your idea is so focused that you can express it clearly in 50 words or less.

Exercise

1. Summarize your business idea in 50 words or less.
2. Where did your business idea originate (from a specific experience, long observation of an industry, a sudden inspiration)?
3. If your idea is for a new product or service, describe how you expect to get it known and accepted in the marketplace.
4. If your idea is for an improvement or variation of an existing product or service, describe why customers will use it instead of what is already there.
5. Describe your market niche in 50 words or less.
6. List at least three qualifications that you have that will allow you to pursue a business in this market niche (work experience, education, research, reputation, etc.)
7. What are your two most important personal goals for the next five years?
8. How will this business help you achieve these personal goals?
9. List and describe briefly the two most significant barriers you expect while launching and operating your business.
10. Explain how you expect to overcome these problems.

Testing Your Idea

As you evaluate your idea, keep in mind the following:

• Market research does not have to be complicated or expensive, but you must do it.
• Do research to determine whether enough potential customers exist to support your product or service. Use the following sources for statistical and demographic information:

- Library (specifically, the Miller Business Resource Center at the Middle Country Public Library is a valuable resource)
- Computerized databases (available at many libraries)
- U.S. Small Business Administration
- U.S. Bureau of Census
- Trade associations for your industry
- Local Chamber of Commerce

• Test your idea with potential customers and others who can offer constructive feedback (e.g., friends, relatives, bankers, suppliers, business executives). Keep a written record of responses.
• Be prepared to make changes based on the responses.
• Study and evaluate the competition.
• How will your product or service be an improvement over the competition?
• Price your product competitively – higher if your product or service improves on an existing one, and lower if it will be equal to what is on the market. Be sure you can make a profit.