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How to Come Up With a Good Business Idea
Kody Wirth | Oct 29, 2023
Some entrepreneurs have a natural gift for generating ideas—most struggle. But without a good idea, starting a business will be an uphill battle.
Luckily, this is a skill you can improve with the right process and a little practice.
This guide will teach you how to generate hundreds of business ideas and identify what makes a good idea. We even have curated lists of ideas for you to explore. Let’s get started.
How to come up with a good business idea
Coming up with a business idea isn’t a strict process. It’s a series of methods to tap into, explore, and see if something sticks.
Here are a few tried-and-true ways to generate a business idea:
1. Solve a problem
Your business must solve a real problem.
The most successful businesses always do. But how do you identify a real-world problem?
Try one (or all) of the following:
- Think about issues you’ve encountered in your own life.
- Reach out to friends, family, or colleagues.
- Look through Reddit, Quora, and other forums.
- Run a survey.
These are just a few ways to uncover actual problems. Once you’ve identified a few persistent issues, dream up possible solutions. That may lead you to a highly desired business idea.
2. Talk to family and friends
It’s challenging to think up ideas solo. So, reach out to someone you trust.
Your family and friends can be a great source of inspiration. Discuss your desire to start a business with them and ask for their ideas.
They may have noticed a gap in the market, have a problem that needs solving, or have a unique perspective for harnessing your skillset.
This outside input can be the spark you need to find a great idea. Plus, you’ll open the door for additional support—such as funding or partnership.
3. Make tasks easier
The best and most lucrative businesses are often the most mundane. They help solve basic problems by making them easier or more efficient.
To hone in on these simple issues, walk through your day. What tasks do you dread? What undesired work takes up your time?
These often overlooked pain points are likely screaming for solutions.
4. Build on an existing product or service
A great business idea doesn’t require reinventing the wheel.
Instead, take an existing product or service and make it better. Improve the design, add new features, or find a new way to market it. You may even be able to introduce a product or service to an underserved market.
Start looking at the things around you and ask—how could this be easier? How could it be more intuitive, less stressful, and more pleasant? How could it be more affordable?
You may find that even the slightest change will create something unique.
5. Start with a hobby
Your hobbies and passions can be a great source of business ideas. Whether you love baking, photography, or gardening—there’s likely a way to turn your hobby into a business.
You just need to determine how to monetize your skills or the products you create. If you’re unsure how take it slow and start with a side hustle. You’ll still need to consider pricing, expenses, and how much time to invest—but you’ll have less risk and more time to adapt your hobby into a business.
6. Jump on a trend
Trends can provide excellent business opportunities. Whether it’s a new technology, a fashion statement, or a change in consumer behavior—spotting and capitalizing on emerging trends can lead to successful business ideas. But, there are potential complications you should be aware of.
A very small or non-existent market for this product or service is likely. You’ll need to showcase the problem to stimulate a need many didn’t know they had. Just be sure it has staying power (like AI tools) and is not just a fad (like fidget spinners).
You should expect multiple competitors to emerge as the trend gains traction. Focus on solidifying your brand and build loyalty early on to stay ahead of imitators.
Innovation involves developing something new or finding a novel approach to an existing product or service. This requires creativity and a willingness to take risks. Still, it can lead to unique and successful business ideas.
Remember that this may mean no current market for your product or service exists. But if you believe there will be a problem and can convince others, you may be at the forefront of an untapped movement.
What are the qualities of a good business idea?
There’s no genuinely perfect business idea. However, there are clear signs that an idea is worth pursuing and more likely to succeed.
Clear market demand
There must be a need for your product or service. Meaning your idea needs to, at a minimum, solve a real-world problem for your target customers.
That’s just the start.
Will people pay for a solution? Is there a real opportunity to disrupt pre-existing alternatives?
It may not be a good idea if the answer is no to either question.
Scalable and profitable
Scalability and profitability are tied together.
An idea is scalable if you can:
- Attract more customers.
- Accommodate this increased demand.
- Lower costs as you grow.
An idea is profitable if revenue exceeds expenses.
Now, your business may take time to be profitable. But it should display the ability to grow and scale to achieve profitability.
If your business idea can’t bring in more customers or decrease costs—you’ll struggle to be profitable.
Fits your goals
Do you want to monetize your passion? Grow quickly and sell? Create a legacy to pass down to your kids?
You need to know what you hope to get from being an entrepreneur. Because only some business ideas will fit your goals.
So, make sure the business fits your motivation. If it doesn’t, you’ll find it is far more challenging to keep up long-term.
No business idea? Try these
If you’re struggling to develop a business idea, check out one of our curated guides for inspiration.
Business ideas you can start for free
Is the idea of spending money holding you back from starting a business? Don’t worry, there are plenty of business ideas out there that require little to no upfront investment.
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Coming up with an idea is just the first step
Once you have your business idea, it’s time to validate if it will work.
You’ll need to chat with potential customers, run tests, and explore the financial implications of starting your chosen business. If that sounds tough, don’t worry, the next section of our startup guide will help you understand if you have a good business idea.
For now, pat yourself on the back for getting this far.
Sorting through the thousands of potential options and finding something you believe can be turned into a business is a big step. Now, you need to determine if your idea can become a legitimate business.
Resources and tools to find your business idea
Make researching and selecting a business idea easier with these templates and tools.
Business idea validation checklist
Want to find out if your business idea is a winner? Work through this checklist to test it.
One-page business plan template
Document your research, explore the specifics of your idea, and outline how it could work as a business.