While reading histories of extremely successful companies and brands, I cannot help but wonder whether one day I will have something to be proud of as the founders of these companies have. It doesn’t have to be big and famous, I tell myself, but something that I have started, and which my labors have created into a success. Even since those moments, I find myself constantly thinking about business ideas that can be capitalized into a successful firm. These thoughts led me to the decision to begin informal series posted on The Monthly Narwhal as well as on this independent blog, called “The Dilettante Guide to Being Your Own Boss”, which will inform readers about the basics and the process of entrepreneurship.
In this first post, I will analyze the first and crucial step in starting any successful business – having the right idea. What does right mean? It means that the idea is applicable in a business environment, and that there is sufficient demand for the products and services that will stem out from the initial conception. For example, let’s suppose that you have an idea for an internet site listing prices of several types of goods or services, such as furniture or apartments for rent, from several firms. The rationale would be that producers and sellers would like to compete, and would like to experience guaranteed revenue increases when they decrease prices, and under-price competitors. Badly informed buyers may continue buying products from a particular firm, even though there are equally good, cheaper alternatives. Your internet site would redress this wrong by informing buyers, and for that service you will request fees from firms for quoting their products and prices on the site.
Smart idea, huh? It has been done successfully, so it would surely work in this market. Wrong. If someone else has done it, it does not mean that you can do it too. First, you must be somewhat sure that competitors will want to compare prices. Why would a profitable firm that leads the market be willing to compare prices with smaller firms that are trying to get its revenues? And why would the small firms want even more competitions that they are facing at the moment?
For this, and every other service or good, there needs to be a market, meaning there needs to be demand for it. Selling something nobody wants to buy is the foolproof way to failure. To continue the example, the internet site may work for products that are easily comparable (very similar and uniform), and whose market is not dominated by a one or two “leader” firms. Moreover, an idea may be brilliant, but just its timing can be wrong, such as starting it in a recession. The example is actually from real life, and the idea behind it was conceived by a Macedonian entrepreneur, who wanted to implement it on the Macedonian market. But unfortunately, he failed because the market rejected it, and was immature for the price-comparing site, a business that has been implemented successfully in foreign, more advanced markets.
Business opportunity is all around us. Open eyes and a sharp mind suffice to seize it. Once you have an idea, and you have determined that it is a right idea that can be turned into a business, it’s time to take the next step – researching the idea and the market for it.
The next post will discuss how to develop the idea and how to develop personal competence that will support its future progress.