Some entrepreneurs make the mistake of thinking that their business idea is the most valuable part of their new venture. While a powerful idea can be the start of huge success, in practice it is the execution of that idea which really defines whether an organisation will succeed or fail. The most successful entrepreneurs do not believe in scarcity, but in abundance. They recognise that there are thousands of ways to improve the world they live in and generate profit while doing so, and they train their minds to recognise opportunities and monetise new concepts effectively.
How do you come up with a business idea?
A business does nothing more than solve a problem. Sometimes the problem a business solves is one that consumers didn’t even know they had. Other times, it is a problem which has had an inefficient solution for decades. And in some cases, it is a problem which many have tried and failed to solve before.
Most entrepreneurs identify problems regularly, just in their day-to-day life. It is often the case that in working in an industry as an employee, an entrepreneur sees inefficiencies and new opportunities to improve upon existing practices, leading them to take the leap and enter business for themselves.
In today’s globalised economy it is vital for new business founders to generate business ideas which give them an edge, otherwise they are likely to be beaten to the punch by larger organisations or better funded competitors. There are a few ways entrepreneurs can do this:
Look for a niche market which is not profitable to larger operators
Look for an area where the entrepreneurs particular skills can be applied in new ways
Find industry’s struggling from
inertia and a lack of innovation
Find ways to achieve the same outcomes as existing businesses more cheaply
Look for opportunities to introduce new technologies to stagnant industries
Monetising a business idea
Once an entrepreneur has identified a problem they can solve or a significant improvement they can offer, they need to create a business plan that will monetise it. There are many problems which are just not profitable to solve - for example, most people hate paying to use the internet. An entrepreneur who could devise a way to offer internet access globally for free would see huge interest and massive success, but how would they generate enough income to make such as expensive venture profitable?
There are a number of ways to monetise a new business idea:
Charge for the new product or service directly
Utilise the product or the platform for advertising
Gather user data and behavioural analytics to sell to big data companies
Make money online using your website for affiliate marketing
Accept donations from passionate supporters
Run a crowdfunding campaign
Build a database of contacts to be sold to marketing companies
Offer a tiered pricing system with advantages to users who pay more
There is really no fixed way to monetise a business idea. Some famous businesses, such as Facebook and Snapchat, made no efforts to monetise their operations until they already had a global network of users, and now these organisations are worth billions.
The important thing is that a business is offering something people want or need, and they are able to do it for less money than they are able to generate in revenue.