A number of the e-mails I receive from people who read this column ask the question “What type of business should I begin?” Now, even in a face to face conversation, this is a difficult question to provide a response to. You can therefore imagine how much more difficult it is to respond to this question by e-mail.
It is almost like e-mailing a doctor to ask “What medicine should I take?” without giving the doctor the opportunity to examine you. Rather than provide an answer therefore, irrespective of the method by which this question reaches me, my response is inevitably to ask the person behind it to address the two areas below.
Look for opportunities
If you are thinking of starting a business but are unsure of the type of business, stay alert and keep your eyes open for opportunities right within your environment.
Another way to think of opportunities is – what is not being done that you wish was being done, or what service is not being provided that you wish was available? I like taking a home-packed lunch to work because by doing so I do not have to leave my office at lunchtime. On days when I am not able to bring my lunch with me however, I find myself wishing for a lunch delivery service that would bring fresh fruit and vegetables right to my office.
If one exists, I am not aware of it. This could be a business opportunity. What is a source of frustration for you or people in your office or your community? Can you think of a solution that would solve the problem and provide you with a concrete business idea?
Estimate the market size
Once you identify an idea, the next thing you should do is estimate the size of the opportunity. To do this for my above idea, I would talk to several friends and colleagues to find out how many share my frustration over the absence of this type of lunch delivery service. If enough of them say they are willing to pay my proposed price several times a week, I would then create financial projections to see if the money I hope to make will cover my expenses and earn me a profit.
Should it turn out that only two or three of my friends are interested, I would either drop the idea altogether or look for a completely different group of people. If you cannot find enough people that both think you have a good idea and would be willing to pay your proposed price for it, then it is time to scan the environment again, for another idea.
You may have to go through these two steps several times before finding an idea worth pursuing. Once you do however any consultant, including this one, will be happy to discuss it with you.