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Brainstorming businesses: what is considered a good business?

You’re probably reading this article because you’ve heard about those success stories. You’ve got that feeling that won’t go away – you really want to start your own business. And although you’re certain about that, you either can’t think of a good idea or have too many ideas and don’t know how to pick one! Maybe, you have an idea but are worried about getting started. This article will include how to brainstorm business ideas, perform marketplace analysis and research business trends, and ultimately decide on a relevant business idea to start that coincides with your findings.

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How do I choose a business idea?

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?

What is marketplace analysis?

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

PESTLE analysis for macro business influences

Macro influences can be broken down and assessed using PESTLE analysis where you should consider the effect that the following factors could have on your business. Macro influences could be local, national or global. Nobody can predict the future but it’s still helpful to do your research. 

  • Political

    Could changes in policies, parties and Brexit have an effect on your business? What taxes will you have to pay

  • Economic

    How big is the market? How will you source your suppliers? What is the competition like? (See also: competitor analysis below).

  • Social

    What trends are forecasted? Does your business fit in culturally? Will you have access to the staff you require? What are the income levels and demographics of your target market and how can you access them? (See also: target market analysis below).

  • Technological

    Consider predictions about future technological advancements that could affect your industry – things like 3D printing, AI and voice-activated software. 

  • Legal

    What licences will you need to operate your business? What local and national legislation and regulations will your business operation need to adhere to? Familiarise yourself with employment law if you’re planning on taking on staff.

  • Environmental

    What impact will your business have on the environment and how could this be minimised? As trends move towards more eco-friendly living will your products fit in? Will factors like the weather affect your trading? 

How to perform competitor analysis

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.

 

1. Find your top ten competitors 
  • If you are unsure who your competitors are, try typing your key search terms into Google and see who comes up, for example, “tax accountant in Bristol”. 
  • Who are they? Who are they owned by? How big are they? Where are they based? Are they or have they raised funding? Are they hiring? 
  • You may want to categorise your competitors into primary and secondary. A competitor mightn’t even be in the same industry as you. Rolls Royce’s biggest competitor was cruises as their target market would get to retirement and choose to spend their money on one or the other.

 

2. Perform price analysis for each competitor 
  • Review prices, offers and packages, postage and packaging charges. 

  • If you’re in the service industry this can be hard and if you can’t find it out exactly for each competitor then look at industry research and ask people you know who already use those services if they mind giving you an idea what they pay. 

 

3. Identify the marketing channels they are using  
  • What marketing channels can you find that they are using – for example, website (blog posts), social media (Instagram marketing, Facebook Ad), email, post, PR, print ads, radio ads, TV ads, online ads, events/exhibitions, partnerships, sponsorships, affiliate and referral programmes. Are you willing to pay for any of these?

  • See if you can work out how they are tracking performance for each channel. Take an online course to set yourself against them.

  • Keep an eye on their efforts – it’s likely if they are recurring (for example, a repeated press or radio ad) then they are working. 

  • What do the channels they have chosen tell you about their target market?

 

4. Analyse their content
  • How often do they post and engage on social media and what about? Do they blog or produce other content?

  • What does their brand positioning (language, design, content) tell you about their target market? 

  • What information do they have on their website (that you will need when you build yours)?

 

5. Evaluate their customer service
  • See what customer support each competitor offers. 

  • Read reviews to find out what customers really like and what has made them unhappy. 

  • Reviews can also give you an indication of the frequency of sales that a competitor has and for which products.

 

6. Identify areas for improvement
  • What would you say the main strengths and weaknesses are for each competitor? Compare the data you have gathered and work out how you could compete.

How to perform target market 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). 

How do I know when it’s time to take the leap to start my business?

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. 

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I’ve been working through the how to start a business in 20 days ebook and so many of the things I’d done are now nicely tied together and some gaps now filled. I love the simplicity. Thank you.

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