Small Business Startup
Finding a Potential Idea

(Last updated: June 5, 2017)

During this step in your small business startup, you find a potential business idea. This idea is the basis of a proposed business venture. It describes what product you intend to sell and who you expect to use or purchase it.

Before starting this step, you should have defined your requirements for a business. The previous step shows you how to do this.

The desired result of this step is the written description of a potential business idea. This idea should satisfy your requirements for a business and appear to satisfy the needs and desires of your expected customers.

You will use the following topics to complete this step:

Guidelines
Procedures
Example
Go or no-go decision

You will be validating this potential business idea in the next steps. These steps will determine if the idea is suitable for you and your likely customers.


IMPORTANT

Before using this information to start a business be sure to read the following notice: Disclaimer

Guidelines

These guidelines should help you choose a potential idea for your small business startup.

Satisfy your passions

Base your business idea on something that you enjoy doing. This could be a sport, hobby, or leisure activity. It could be something that is part of a past or present job.

If you like to organize social activities, you could start a party planner service. If you enjoy helping people learn things, you could start a tutoring service.

Use your natural competitive advantages

A good idea for a small business startup might use your natural competitive advantages.

One example is being able to recognize and exploit changing social or economic conditions. Another example is having both the artistic talents and the technical knowledge needed to design websites.

Use a low-cost, low-risk business concept

A low-cost idea uses your existing equipment and facilities. If you have carpentry tools and equipment, you could start a home repair service.

If you have a computer, your small business startup could use any number of ideas based on computer programs. You could use your existing programs or purchase a low-cost program.

A low-risk business is one that:

  • Isn't subject to onerous governmental regulations
  • Isn't likely to have disputes with customers
  • Isn't likely to harm people or the environment
  • Isn't likely to create envy or resentment
  • Doesn't violate any laws
  • Doesn't require a lot of cash to start or operate

Not quite a low-cost, low-risk business idea?

You may find a business idea that requires skills or equipment you lack. Should you take a chance on this idea? I think it depends on your ambition, self-confidence, and tolerance for risk.

Have you tackled tough projects before and fought your way to completion? If so, then the decision is up to you. If you haven't, then I recommend against this business idea for a small business startup.

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Procedures

During this step, your requirements for a small business startup are refined into a written description for a specific idea.

When a procedure calls for paper and pencil or pen, you may prefer to use a spreadsheet or word processing program instead.

This step has four phases:

  1. Search for potential business ideas.
  2. Test each potential business idea to see if it is suitable.
  3. Select the best idea from those that qualify.
  4. Write down a general description of the best business idea.

Search for potential business ideas

Get several sheets of blank notebook paper. Start thinking about potential business ideas. Write down a single sentence to identify each potential idea. Here are some examples:

  • Managing apartment buildings for property owners
  • Providing accounting services to small business firms
  • Teaching classes on arts and crafts to retired people

Here are some ways to find potential business ideas:

  • Follow the links for the various Categories of service businesses topic on another page.
  • Scan "Business Opportunity" magazines.
  • Look through the yellow pages of the telephone book.
  • Brainstorm for ideas with your family and friends.
  • Talk to retired business owners about ideas for a small business startup.
  • Look for ways to use emerging technology.
  • Look for ways to help people adapt to changes in society or the economy.
  • Look for new ways to solve the common problems encountered in life.

Test each potential business idea

In this phase, you test the potential business idea. It must pass two crucial tests:

  • It must satisfy your requirements for a small business startup.
  • It must appear to satisfy a current need of the likely customers.

These tests use your assumptions about this business idea. In later steps, you will replace these assumptions with solid facts and detailed calculations.

Select the best business idea

After you have found several ideas that pass the two tests above, decide which one of these will make the best small business startup.

Here are two special tests you can use to pick the best idea:

  • Is this business idea practical and doable?
  • Does this business idea excite and motivate you?

Here is an additional method you can use to pick the best idea.

Decide which three items from your lists of requirements for a business are most important to you. Then decide which business idea seems to best satisfy all of these top three requirements.

Describe the best business idea

After you have found the best business idea, you need to describe it in more detail. On a fresh sheet of notebook paper, describe this "most suitable" business idea per the checklist items for this step. Allow half a page of notebook paper for each item.

  • Brief description of the product (goods, services, or information)
  • Brief description of the likely customers for this product
  • Brief description of any competitive advantages this business idea gives you
  • How the product will be produced and delivered to the customers
  • How this business idea appears to satisfy your requirements for a business
  • How this business idea appears to satisfy a current need of the expected customers

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Example

I am using my own small business startup for this example. I hope it will help you.

Search for potential business ideas

I didn't need to go through much of a search. My list of requirements for a business idea led me right to the idea of writing an e-book on the topics discussed in this website. I am already qualified to write about these topics.

In addition, many people who make a living producing and selling information products say it is a very satisfying and profitable business. (This assumes you know how to promote and sell the products, of course.)

Test each potential business idea

My first idea, the e-book, is the only one I needed to find.

Here are the initial tests:

  1. Does the idea satisfy your requirements for a business? Yes.
  2. Does the idea appear to satisfy a current need of the likely customers? Yes.

Select the best business idea

This first idea passed both the initial tests and the special tests.

Here are the special tests:

  1. Is this business idea practical and doable? Yes.
  2. Does this business idea excite and motivate you? Yes.

I did not use the additional method to pick the best idea. I only had the one idea. (However, the idea would have passed that test also.)

Describe the best business idea

Product description -- My product will be an e-book on having more money.

Likely customers -- The most likely customers for the e-book will be ordinary people who are unemployed, worried about being unemployed, or just want some extra money.

Competitive advantages -- I am able to provide diverse, but related, information in a way that no other person or group can. This is due to my independent thinking, my breakthrough revelations, and my well-trained subconscious mind.

Product production and delivery -- I will produce the product on my computer. I will deliver the e-book electronically from this website.

How product satisfies my requirements -- I expect to derive a suitable profit from the sales of this product. (The major investment is my own time and effort.)

This product will help other people in having more money and gaining personal power.

This e-book will help me become a recognized authority on the topics of having more money and gaining personal power.

I will enjoy using my creative talents to write this e-book.

My abilities and resources are adequate to the task of creating and marketing this e-book and running the business.

I have sufficient free time to produce this product.

I am willing lose the $250 startup expenses and the operating expenses for a few months.

How product satisfies likely customers -- This product will help my customers get through the hard times I believe are coming.

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Go or no-go decision

This decision concerns the written description of a potential business idea you developed in this step.

Go on to the Reviewing the Market step in your small business startup if you can answer "yes" to the following questions:

  • Is this business idea practical and doable?
  • Does it excite and motivate you?
  • Does it satisfy your requirements for a business?
  • Does it appear to satisfy a current need of the likely customers?

If you have answered "no" to any of the above questions, go to this topic on another page for what to do next.

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