Every business starts with an idea. An idea for a product or service that solves a problem or meets a need. The process of identifying and developing these ideas is known as opportunity identification and ideation.
There are many different ways to identify opportunities. Some entrepreneurs look for problems that they can solve, while others look for needs that are not being met. They may also look for trends or changes in the market that identify a new business opportunity.
The key to identifying high potential business ideas is to make sure, whether the solution is really required by the target customers. Or the unmet need has potential to become a viable business.
Once an opportunity has been identified, the next step is to develop an idea for a product or service that can address that opportunity. This involves brainstorming, research, and prototyping.
Brainstorming is a process of generating ideas without judgment. It can be done individually or in a group. The goal of brainstorming is to come up with as many ideas as possible, no matter how crazy they may seem.
Experience and insight: Sometimes business ideas are identified by entrepreneurs because of their long association with the industry and their experience. During their tenure in an industry, entrepreneurs would notice some issues which remain unsolved or they hear from customers that they want certain problems to be solved. This insight and experience gives the entrepreneur an opportunity to come up with new solutions and that becomes a business.
Outsider Perspective: In certain other cases, an outsider notices some obvious gap, which is not visible to the insiders, as they are comfortable with the current way of working. Sometimes, they are resistant to change. In certain cases, these markets may be so small, and therefore the insiders ignore them for a very long time. The outsiders go as an entrepreneur in to these segments and build new solutions for those customers who were waiting for such a solution.
Once a number of ideas have been generated, the next step is to research them. This involves gathering information about the market, the competition, and the target customer. The goal of research is to determine which ideas are the most feasible and promising.
Once the research is complete, the next step is to prototype the most promising ideas. This involves creating a working model of the product or service. Prototypes can be used to test the idea with potential customers and to identify any potential problems. Here identifying the right technology, process and approach becomes critical too.
Once a prototype has been developed, the final step is to develop a business plan. A business plan is a document that outlines the business’s goals, strategies, and financial projections. The business plan is used to attract investors and to secure funding for the business. Some entrepreneurs may think it is not pragmatic to develop a business plan as many facts are unknown.
Opportunity identification and ideation is a critical step in the process of starting a business. By following these steps, entrepreneurs can increase their chances of success.
Causes of New Opportunities.
New opportunities can be created by a variety of factors, including:
- Modern technology: New technologies can create new markets and opportunities. For example, the invention of the transistor led to the development of the personal computer, which created a new market for software and hardware.
- Innovation: Innovation can also create new opportunities. For example, the use of a washing machine to make lassi in large volumes created a new market for lassi in Punjab. Innovation is rather a way of looking at things differently. And attempting to assemble things which may not be connected, both in terms of ideas and systems and solving a problem, easily or some problems which remained unsolved.
- Changes in economic conditions: Changes in economic conditions can also create new opportunities. For example, the growth of the Indian economy has created new opportunities for businesses in a variety of industries.
- Changes in demographic conditions: Changes in demographic conditions can also create new opportunities. For example, the aging population in the United States has created new opportunities for businesses that provide healthcare and other services to seniors.
- Changes in government regulations: Changes in government regulations can also create new opportunities. For example, the deregulation of the telecommunications industry created new opportunities for businesses to provide telecommunications services.
- Opportunities that are triggered by fashion or new thinking: New opportunities can also be created by fashion or new thinking. For example, the demand for fashion goods like leggings has created new opportunities for businesses that sell these goods.
New opportunities can be created by a variety of factors. By understanding these factors, entrepreneurs can increase their chances of identifying and capitalising on new opportunities.
Every successful idea for business must meet these three feasibility criteria.
- Technical feasibility refers to the ability to develop and implement a business idea using the available technology. This includes factors such as the availability of materials, equipment, and skilled labor. For example, if you want to start a business that produces custom furniture, you will need to have access to the necessary tools and equipment, as well as skilled woodworkers.
- Economic feasibility refers to the potential profitability of a business idea. This includes factors such as the cost of production, the price of the product or service, and the size of the target market. For example, if you want to start a business that sells organic dog food, you will need to determine the cost of ingredients, the price of competing products, and the number of potential customers in your area.
- Market feasibility refers to the demand for a business idea. This includes factors such as the size of the target market, the level of competition, and the customer’s willingness to pay for the product or service. For example, if you want to start a business that provides dog walking services, you will need to determine the number of potential customers in your area, the price of competing services, and the willingness of pet owners to pay for dog walking.
These three feasibility criteria are important for any business owner to consider before starting a new business. By carefully assessing these factors, you can increase your chances of success.
Here are some additional tips for conducting a feasibility study:
- Do your research. Gather as much information as possible about your industry, target market, and competition. This will help you to identify potential risks and challenges, as well as opportunities for growth.
- Talk to experts. Get input from people who are familiar with your industry or who have experience in starting and running businesses. They can offer valuable advice and insights.
- Create a business plan. A business plan is a roadmap for your business. It should include your goals, strategies, and financial projections. This will help you to stay on track and make informed decisions as your business grows.
By following these tips, you can conduct a thorough feasibility study and increase your chances of success in business.
A J Balasubramanian is a serial entrepreneur, with over three decades of startup experience in founding companies, mentoring / incubating startups and writes regularly on topics of interest to startups.