How To Come Up With A Business Idea - Part 2
How to choose a profitable business idea - and the common mistakes to avoid that almost guarantees failure!
Part 2 of 6
For the purposes of this guide, we've chosen a complete whacky business idea of "Bubblegum Flavour Extracts Limited".
Now we know you're probably thinking: "that's the silliest business idea I've ever heard!"
How to choose between trading as a "Sole trader" and a "Limited Company".
Choose the wrong type of company, and your house, car and bank account could all be at risk!
First, of course, we need a business idea, so how does one come up with a good business idea?
An idea can be really anything, but a successful idea consists of 3 fundamental pillars:
1. Find a problem.
2. Develop a solution.
3. Find people willing to pay for the solution.
Of-course, this can be expanded into much more than just 3, but let's keep it simple ...
For example, a car wash:
* The problem: Dirty cars
* Solution: Cleaning service
* People willing to pay for it? You bet!
But really, we tried to think of the most absurd idea that came to mind - because, usually with guides such as these, everyone tries to copy the idea given in the example ...
It seems like a quick fix, the thinkings been done - the concepts been proven to succeed and no one bothers to use their own thinking caps ...
Which is why we tried really hard to come up with an idea that is virtually unsellable - but failed, as you'll find out soon ...
Here was the raw thinking process:
Take bubblegum ...
Everyone loves the bubblegum flavour (... while it lasts)
Now we can sit here all day coming up with ideas, but it's the last question which is usually the most important.
... Are people willing to pay for it?
Sometimes, you need to dig deeper - the customer may seem like they want one thing, but in fact they are really after something greater.
Let's look back at the car wash example, the problem here isn't really having a dirty car, yes while that is a important aspect of it, the real problem is much deeper.
And unless you uncover this early on, you'll find it harder to meet criteria #3: find people willing to pay for it!
Anyone can clean a dirty car, thankfully water is accessible to most of us, and a bucket and sponge can be easily be sourced for under £1.
So what's the problem then?
The real problem here is that people are unable/too lazy to wash their own car
They would rather pay someone else to do that job instead of going through the hassle themselves.
[Here's the golden nugget]: Look for opportunities where people are unable to do a task (due to lack of knowledge, e.g. plumbers, doctors etc) or where they are not willing to do so such as cleaning services for example.
[Here's another nugget]: Sometimes people are looking for an experience. Take a restaurant for example; it's easy to think the problem being solved is hunger and the solution is food ...
Then we all spit out the actual gum. Its only job was to carry the flavour.
Now, you won't believe this, but we actually thought of a mechanical jaw that chews the gum until it extracts all the flavour!
*The problem: people want more flavour, without the hassle of chewing
*The solution: sell them the flavour extracts (using our mechanical jaw machine)
*People willing to pay for it? (We later found out YES!)
I mean, who would pay for this?
"What a silly idea" - just perfect! We thought...
For the price of an average resturant meal, one could easily feed double if prepared at home.
And yes, food is a huge chunk of the solution - but what people are really after is the experience...
The whole package, the table service, the atmosphere, the music and not having to worry about the dishes afterwards.
50% Off Directors Address service
If you also buy the Registered Office Address and Business Address services.
FREE Company Formation (Was £20)
With every Registered Address service. Submit in as little as 60 seconds!
£25 Off Dormant Company Accounts
Let our accountancy team file this with Companies House within 24 hours!