Ask SCORE: Where Do New Business Ideas Come From?
Where Do New Business Ideas Come From?
Thoughts for Both the Startup and the Going Business
By Richard Walton, Assistant District Director, SCORE
This question often plagues the new entrepreneur (or the practicing businessman) as he or she searches for 'the next big thing'. What is less well known is that there is no 'next big thing', until you create it. So the question does become, how do you find business ideas that are really different, and potentially world shaking either to startup a new business, or energize an existing one?
The answer is divided into several sections, which are as follows: 1) Some previous experience, but with a twist, 2) Really innovative thinking, way outside the box, 3) The translation of problems into opportunities.
PREVIOUS EXPERIENCE BUT WITH A TWIST
We all have experiences that could lead to a good business venture. Existing businesses have experience with their current products and customers, and also some knowledge of what other firms are doing. A sales rep for a transportation firm once told me that he got a great idea from calling on a prospect that seemed to be steadily building a business judging by the volume of shipments coming in and going out. That experience led him to research the market potential for the product, and ultimately to start up his own firm, but with a twist. Since he knew about shipping costs, he made expertise in shipping his primary differentiating feature from his competition.
Existing firms can always benchmark their competition. This means carefully surveying what they are doing, and while not copying the format exactly, distilling from it what the next step might be (the twist) that could make your firm even more successful.
REALLY INNOVATIVE THINKING, WAY OUTSIDE THE BOX
The best ideas are not always the ones that we know about already, in fact that are unlikely to be the best simply because our search for ideas and our experience typically has not included a large universe of ideas. The way to circumvent this limitation is to think way beyond the box, starting by questions like, 'what if?' As an example, some recent ideas I have come across include making clothing that lasts forever, developing a web store front to sell the work of artisans from all over the world, importing beads from Nepal to sell in Washington DC, and setting up a dog walking service with a group of people who will do the work for you.
Existing businesses should review their business model in the search for new ideas. A consulting client I worked with for some years developed a new business model of replacing their field sales force with an e-commerce web portal, which sharply reduced their costs and enhanced their market penetration. After all, it is harder to sell all over the world when you have to be physically present in front of the customer (as in field sales work), but it is no problem at all when you work from an e-commerce site.
REDEFINING PROBLEMS INTO OPPORTUNITIES
The new business that solves a big problem for their customers is on the track for great success. Personal snow blowers that don't require heavy lifting, canes with wheels for semi disabled persons, getting your office supplies and furniture from larger company cast offs (which also saves the large firm the costs of pick up and disposal) area among several new product ideas that have recently gained market traction. Whatever is annoying and costly can be made pleasurable and easy with imagination and tenacity in finding the problem and developing the solution that solves it.
Similarly the existing firm can redesign its packaging to eliminate product damage if that is a problem, or redesign its production system to improve quality, or adapt its inventory system to take advantage of JIT (just in time inventory), which eliminates the old problems of incurring the high costs of maintaining an inventory on site from which to draw your production requirements.
Whether you are a new business startup or an existing business, it is all about ideas. This means you have to focus not only on what is going on today, but what could be going on tomorrow, by being on the lookout to gain additional experience, think way outside the box, and translate problems into opportunities.
Mr. Walton teaches Entrepreneurship and Quality Management at Frostburg State University. He is also Assistant District Director for SCORE, Western Maryland, and the President of ERMACORP, a Hagerstown based Management Consulting Firm. He may be reached at 301-462-9850, or by email to Richard@ermacorp.com.