Brainstorming businesses: what is considered a good business?

Often the issue isn’t so much coming up with a business idea but it’s deciding on the type of business that you want to set up.  There are thousands of business ideas out there and your idea doesn’t have to be unique but you do have to make at least one element of your marketing mix (the 7Ps) better than your competitors whether it be the price, product, place, promotion, the people, the process or the physical environment. Your skill sets need to be perfected.

It’s important that you have really considered your priorities. Make sure you have thought about all of the following before you settle on your idea:

• Be honest about your goals 
  The type of business that you set up should align with your goals. Is your main priority to create immediate profitable small businesses and make loads of money at whatever cost? Or, are you looking to start successful businesses that offer a certain amount as a minimum income as long as you have more flexibility with your time?
• Work out what your deal breakers are 
  What are the absolute no-nos for you? This could be working weekends or not being able to pick your kids up from school, and is also likely to be defined by start-up costs. 
• Don’t ignore the obvious
  Sometimes the business you should set up is right in front of your eyes. Pet sitting and dog walking may be your perfect job! Think about where your experience lies and talk to lots of people – friends, family and those not so close to you (the local community) about what they think.
• Ask yourself if you’re really passionate about it
  A business idea based on a hobby doesn’t need to be (although it might) but you should be really passionate about running it – whether that be because you love the day-to-day work or you are driven by the outcomes. This will get you out of bed in the morning and keep you going when times are tough.
• What is the dream versus reality
  Think about operationally, on a day-to-day basis what it will be like to run the business. Perhaps you need to start while keeping your job until you can grow your business? Do you romanticise over the idea of (for example) running a pub but actually the long hours, lack of holidays, cleaning, stock takes and dealing with the public every day aren’t really what you want? You may be able to get someone to manage some elements of the running of your business for you eventually but for at least the first few years it’s likely to be hands-on hard graft. Think about management tools that could help.
• It’s all about the money
  At the end of the day, money is a huge motivator for most people. How much can you realistically make from your photography business idea or homebased businesses in the first few years and beyond? How much can you invest and what are you willing to lose in the worst case scenario?

Whether the idea for your business was totally spontaneous or you have been deliberating over it for years, conducting marketplace analysis will increase your chances of success. It will form part of your business plan and will also be a really good way to get you thinking about how you will market your business and recognising in advance some of the hurdles you might encounter. 

Split your marketplace analysis into three parts:

1. Macro (external) influences 
2. Competitors 
3. Target markets

Competitor analysis is crucial so that you can find out what you’re up against and what you’ll need to do to compete in terms of activity, resource and budget. You’ll get some great ideas for your own marketing – whether that be inspiration from competitor activity on an ecommerce business or working out how you can do things differently and better. Competitors also demonstrate that there’s a market for your product or service. Follow this ultimate guide of six steps to conduct your competitor analysis.

Many businesses are scared to define their target market, seeing it as reducing the number of people that are prospects. But the truth is it’s ridiculous (not to mention impossible) to try and market to everybody. The more you can narrow down who you’re targeting, the easier it becomes. If your target market is female, you’re not saying that a male can’t or won’t ever buy your product, but you know to focus your marketing efforts towards women. A personal trainer would target those interested in getting fit. A tutoring business would target those needing to learn.

If you didn’t have a good idea who you thought your target market was already, your competitor analysis should have really helped. Follow these three steps to complete your target market analysis. 

1. Build a persona of your ideal customer 
   Go into as much detail as possible about age, gender, location, demographics, job, income, family/relationship status, behaviours, where they shop and what other brands they like. The YouGov profile builder is a useful tool for this. Your business success depends on this.
2. Do some market research 
   Once you’ve identified your target market, talk to them. Tell them about your business idea and ask their opinions. This could be face-to-face at an event, on social media or via a Survey Monkey questionnaire. Be clear on the purpose of your research and about what you want to find out before you start. This is also a great way to get your business idea in front of the right people and to get customers when your business launches, especially if they feel they’ve had input into some of your decision making. Try event planning to bring in more appropriate customers.
3. Conduct a SWOT analysis
   Honestly analyse your strengths and weaknesses at delivering what this target market wants and where the opportunities and threats could be (thinking back to your PESTLE and competitor analysis). 

The process of conducting marketplace analysis and writing a business plan demonstrates your commitment to the idea. If the results are positive and you’re confident that there is a market for your product or service and that you are capable of competing then look to take the next steps on the startup journey.  You are ready to become business owners.

There is never a guarantee that any business will work, even if your research points in all the right directions. Share your analysis and plans with someone you trust and respect in a business capacity and talk it over out loud, don’t just keep ideas in your head – this can make all the difference to how you see something. Minimise risk by staying in your existing job as long as you can, generating some savings, starting your business part-time and by testing a minimum viable product.