Entrepreneurs tend to be highly skilled at seeing a challenge, gap in the market, or area for improvement and developing solutions that can grow into thriving businesses. For many entrepreneurs, coming up with business ideas feels natural; the challenge lies in determining which idea is worth pursuing.
If you’re someone full of ideas but limited in time and resources, these steps can help you figure out what type of business to start and how to move forward with your great idea. Consider these important factors when choosing what business to start and determining the best path forward to pursue your new venture.
[Read more: How to Research Your Business Idea]
Identifying market gaps and opportunities
It’s important to have a foundation of basic industry knowledge before starting any business. Develop more than a surface-level understanding of the market you plan to enter by researching business resources and the competition.
Brush up on your knowledge of your intended industry to understand whether demand is growing, stable, or diminishing. Brainstorm how you can contribute to this industry and how your unique viewpoint can impact the consumers in the industry. Additionally, make the time to take relevant courses and classes or hire a consultant to assist you in the business process. You can even obtain a degree or certificate in your target industry to add credibility.
You will also want to research your target market or your business’s ideal audience and consumer base. Research your competition and learn why consumers are drawn to any existing services. It can be difficult to break into a market with more competition than demand.
It’s important to have a foundation of basic industry knowledge before starting any business.
Balancing passion with profitability
You may feel strongly that you have a winning idea — but even the best business plans take time to execute. Studies show it takes two to three years on average for a business to become profitable, and during that time you’ll be expending a lot of effort as you launch and maintain your business.
Consider the time and resources needed to get your business idea off the ground. Take inventory of the resources you have available to you, including online assistance from websites such as the Small Business Association and the U.S. Chamber of Commerce. Additionally, contemplate the pros and cons of acquiring a business partner to assist with the resources and share the workload.
Passion and persistence are crucial, as starting a business often takes working late nights, managing your fear of failure, and overcoming multiple obstacles. Ensure that the people you’re working with are in it for the long haul through a mutual desire to pursue this business idea. If you start your business with an idea you’re passionate about or interested in, it can sustain you through difficult times.
Long-term sustainability of your business idea
Finally, think about the long-term growth prospects of your business idea. Not all businesses are founded with the intention of staying open forever. Some entrepreneurs create businesses to be acquired by bigger enterprises; others are happy to merge with similar, smaller partners and move on to their next great idea.
It’s important to consider a future business’s scalability. Here are a few questions to take into account when thinking about whether your business idea can grow efficiently and sustainably:
- Does your business idea meet ongoing customer demand?
- Can you consistently duplicate the product or service multiple times?
- Will the idea meet customer needs and standards as the business grows?
- Does your idea have to be constantly reevaluated or adjusted over time?
If you answer “no” to these questions, this may be a sign your business idea won’t be easy to scale.
Another area to consider is how changing market conditions could impact your business’s longevity. This can be hard to predict — no one can see the future. Many business ideas that started during the pandemic, for instance, met a specific but temporary need. Is your idea responding to a customer demand that will be obsolete in the next decade? If so, what’s your exit strategy?
Ready to start your business? Check out our step-by-step guide to help you get it off the ground.
Lauren Wingo also contributed to this article.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.
