A business ideais a conceptwhich can be used for commercial purposes. Business ideas, if introduced at the right time, when demand for such service or a product introduced by the ideais expected to surge, can lead to a very profitablebusiness.
Thebusiness ideahas to be based on anopportunity of a market withlittle or no supply and growth potential.It is necessary to haveknowledgeof the market, sector and the specific business, as well as the economic needs to undertake the project.It has to be arealistic idea, technically feasible and from the economic point of view.
The characteristics of a good business idea are :
1 . Having a clear vision
The first important characteristic is to have a clear vision. If you don’t have a clear vision of the business that you are trying to create, you cannotbe successful in creating it? First of all you need to figure out exactly the type of company you are looking to build. For example, where do you see it l being in five years’ time? Do you have a goal for the number of customers you’ll have? The number of employees? Having a clear vision of where you want your business to go will help to contribute to its success.
2 . Identified market need or gap
The idea must meet a clearly identified market need to be commercially viable.
3 . No or few existing competitors
The more innovative the product/service and markets, the fewer competitors, and the higher the price you are normally able to charge.
4 . Entering a growing market
Never enter a market that is not seeing growth.Industries go through cycles, and to think of a business idea in a declining or peaked market will only create grief once you launch. Measuring the growth of the market (if you are entering an existing market) is crucial to making sure your idea is great, and will succeed in the future. One of the best ways to get numbers about industry growth levels is from stock market analysts.
5 . Clearly identified customers and a viable business model
If a business does notknow who it is selling to it won’t know how to sell to them, which means it probably will not succeed. Thebusiness model should be built up systematically to appeal todifferent target customers.
6 . Profitable
To make sure you have a profitable idea, a financial projection can be used to roughly estimate when you may break-even, and when you will make your first profits. This is a good gauge for your business ideas. If you create the projection and it looks like there is no chance this business will reach profitability within three years, it may be a good time to start thinking of new business ideas.
7 . Scalable
Small projects can usually get off the ground easily but bigger projects can be problematic because they are just ‘too big’. In which case, you need to see whether the project can be broken down into smaller projects that can be implemented when the original idea is proved – scalability. The idea is to avoid as much risk as possible for as long as possible – but to make sure you do not miss the window of opportunity completely. This is all a question of judgement and changing market conditions, so you need to remain flexible and think through how you might scale-up the project when it proves successful.
8 . Sustainable
Great business ideas need to be sustainable in two regards:
They use and have access to resources that can last for the next 100 + years. Great businesses never exhaust their key resources, otherwise they will exhaust themselves and die.
They have a vision. Without a vision of where your business idea will be in five years, it will be hard to carry out day-to-day activities that relate to creating a business that stands the test of time.
These are the most important things that have to be taken care of when a person is about to invest for a project. Hopefully this is helpful.