There are many different business models that work and it is not always necessary to create something new. Proven business models are often a good choice when starting a new business and this can be seen in action every day. However even with a proven product or service you still need to ensure that this will work in your local market. In some instances it is still a good idea to start a business even in a saturate market. What matters is that the market is big enough for you to capture a part of it and that the cost to enter the market is within your means.
Before you can start the business discovery process you need a business idea. There are many resources and lists of types of business models available. Explore the web, social media, your local newspaper or business articles. Look for what is trending or ideas that appeal to your interests and skills. Once you have done some homework on business ideas then you can commence with the discovery process.
Steps to take during business discovery
The following steps will help guide your through the business idea selection and develop your business idea into a marketable offering.
Generate initial ideas
Begin by taking some time to write down as many business ideas as possible based on your research, interests and skills. This could be done either in a short brainstorming session or you can take some time to compile a list over a week or so. Don't over think it. This initial step is meant to get as many potential ideas down on paper as possible.
Choosing a business idea
Now that you have a list of ideas review the list and narrow down your options. Sort your list of business ideas in order of preference. Don't over think it. You may sort it based on many factors including, startup costs, barriers to entry, knowledge requirements, competition or market size to name a few; but don't spend time researching each idea. Once you have your list in order of priority, or at least your top ideas, take the top idea and move on to the next step. Keep your list for future reference as you may want to return to it at a later stage.
Research the business idea
Take some time now to research the business. Look at successful business plans for that business. What competitors are there in your market and who would be your main competition. Consider best practices and what is being done abroad. Take this information and start formulating a rough plan for what would be required to make this business work.
Refining the business concept
With the knowledge gained from the research modify the business concept as needed. Start to formulate a business plan sketch. Using a Business Model Canvas can be a useful way to visualise your business and will allow you to capture the important pillars of the business. During this step and the steps that follow you will begin to get an idea of whether the business idea will work or not. If you determine that the idea will not work for you for one reason or another then return to your list and choose the next option. Then go through this process again until you find an option that works.
Preliminary testing
Speak to some potential customers, friends and family to guage their response to your business offering. This will give you an idea if the concept is marketable and if potential customer would be willing to buy into it. At the same time build on your preliminary competitor research. Find out what the bariers to entry might be and further refine your idea. Now would be a good time to start considering what competitive strategy you would likely employ. See the section below on Competitive Strategies.
Competitive Strategies
In the first step to creating a business you you want to spend your time thinking about the business, asking potential customers and people you trust for input and critical feedback on your idea. Again, this does not have to be a new idea, but it is important that you will have buyers when you start up. In conjunction to this you also want to consider what will be your differentiating factor. What makes you different? The matrix below gives an idea of some common strategies used to differentiate your business from the competitors.
Market Research
Now that you have conducted some preliminary research it is time to start researching if there is a market for your offering and whether people are willing to pay for it. You want to look at factors like the market size, market segmentation other in depth market research to see if there is actually a market for what you plan to sell. Before you move to the next stage (Business Ideation) you want to be sure that customers will buy your offering. The critical feedback received from potential customers can be used to refine your idea and craft it into a product/service that others will find value in and be willing to pay for. Very often businesses fail or don't get off the ground because the owners have a great idea that is either ahead if its time or people do not see the value that you are offering. Make sure you will have willing buyers and a product or service that will be bought before proceeding to the next step.
It is best to spend as much time in this process as necessary until you reach the point that you are confident that clients will buy your pr oduct. While coming up with innovative products is imperative and a huge part of economic and technological progress it can also cost huge amounts of money to educate potential customers about the benefits of your product. Unless you have a large amount of startup capital to keep you going while you educate your customer it is best to start with a product or service that you can sell immediately. Once you have refined your value offering and have feedback from your audience that they would but it then it is time to move on to Business Ideation.