Find your big business idea
Your big idea
Stuck for a great business idea? Contrary to popular belief, most good business ideas are not the result of a sudden brain flash at three in the morning. True, this does happen at times. But sudden inspiration is not the norm.
What is more frequent is a range of other factors that come into play and help you decide what is a good business idea and whether to pursue it or not. I like what New Zealand entrepreneur Murray Thom says about ideas.
From the Desk of the CEO: Murray Thom
Founder: Thom Music
Murray left school at the age of 15 with no qualifications.
He got a job in the music industry, and by the age of 23 he had worked his way up to be managing director of CBS Records New Zealand—their youngest managing director worldwide.
Then the entrepreneurial bug bit. Says Thom, whose passion for sailing is as strong as his passion for business: ‘If you are on a boat, sometimes you have to stop grinding, lift your head and go to the top of the mast to find out what direction you’re going in.’
That experience for Thom saw him leave CBS and start the first of a range of business ventures.
In 1987, he successfully won the New Zealand government tender to introduce personalised number plates in New Zealand, and 10 years later sold that venture to return to his first passion: the music business.
Through his company, Thom Music, he has gone on to launch the remarkable Piano by Candlelight series and his most recent venture, the hugely popular Great New Zealand Songbook.
Says Thom: ‘The idea came when I was leaving a Split Enz concert at the Vector Arena and I turned to my son and said, “You’ve just heard the great New Zealand songbook.”
The CD we produced from that idea went on to become one of the biggest selling albums of the last 10 years.
A decade earlier, I signed Carl Doy and recorded his Piano by Candlelight albums as a result of a late-night coffee in an Auckland hotel where he was playing in the lobby.
I heard Carl playing and just knew that here was a fantastic musician and there was the possibility of a great album.
‘Since then we have gone on to generate over $25 million of Piano by Candlelight business, and Carl’s Together 10-CD collection has featured on the Oprah Winfrey Show and was named by Oprah as one of her ‘Favourite Things’ of the year? I have often said that “opportunities don’t shout, they whisper” and these two ideas are very good examples of that.
‘For any young entrepreneur, I think an idea is worth pursuing when you have great personal energy for it. In my experience, if I can take it or leave it, then I believe the market will feel the same way. So that is always one of my personal indicators.’
But even Thom will tell you that a good business venture is not just about the idea.
The idea is only the beginning. Successful entrepreneurs like Murray can see dozens of ideas per week—proposals from people who have had all sorts of inspirational flashes. Entrepreneurs do not pursue every idea that they see.
Why? Because they know it takes more than just an idea to make a business venture successful. Ideas require refining.
They need to be tested, to be worked on and developed. And this takes time and preparation so that when you are finally ready to launch your business enterprise, you give yourself the best possible chance for success.
Where ideas come from
Entrepreneurs get their ideas from a range of places. Here is a summary of some of the main sources. Have a read, and as you do, think about your own ideas and how they have shaped.
What can you learn, or add to your idea, as you reflect on the experiences of other entrepreneurs?
The experience factor
The first place to look for business ideas is your past experience.
This will apply to you now (if you are still at high school) and later in life as well. More than any other single factor, your work experiences will offer the clue to your likely business venture.
In fact, around half of all Kiwi entrepreneurs start a business in the same industry as their present job. Why is this the case? Experience gives you a storehouse of built-up knowledge; the trick is to keep looking out the windows for opportunity.
It works like this. When you are working in a job, you start to learn more about the industry. You meet suppliers, customers, and learn how the business works. You learn about the changing seasonal demands for products and services.
As all this information begins to take shape in your mind, you also start to see areas where there are needs that are not being met. And you think to yourself: ‘I could do that. There is a business in that.’ So you launch a new venture.
Right now, think about your own work experience and that of your team. Some of you will already have had part-time positions and have retail experience, banking experience, worked in the food sector, the transport or tourist sector. Put your heads together.
Where do you see the gaps? What is an opportunity? It could be something that customers keep asking for that your present employer is not providing.
Or a service that might be provided in small amounts, that customers want a lot more of. Or it might be an existing product that would work even better if someone just made a special something to go with it.
Hobbies and passions
Don’t discount hobbies and personal passions as a source of business ideas.
Walt Disney loved to draw, ever since high school. He even negotiated with the local barber, selling his drawings in exchange for haircuts. Leaving school, Disney found his niche as a cartoonist, progressing to film animation, and the rest is history.
Disney is not alone. Kiwi fashion designer Karen Walker was passionate about craft and design from childhood, went straight from school to design college, then began making her own designs and selling to stores.
Karen Walker designs can now be purchased in 600 stores worldwide from Paris to New York. What are you passionate about? What do you just love doing, that you would even do if no one paid you?
Solve the problem
Great business ideas often start with problems, not with solutions. Obviously, there are large problems and smaller ones.
There are clearly minor modern-day problems, like: Where can I get a fresh morning cappuccino while tramping in the National Parks?
Then there are serious problems: If there was a civil defence emergency, what items do I really need to have to survive? And, problems you would rather forget: So, where does that 400 tons of waste a week really go?
Now, before you get totally switched off by the very word ‘research’, think about this. You have heard of the internet trading site amazon.com.
Do you know how the founder of Amazon, Jeff Bezos, stumbled across the idea? Research.
Thinking he really wanted to get out of his high-paying banking career job and start his own business, Bezos did the numbers. He researched which business sectors were the fastest growing. Mail order was one of the leaders. And mail-order books.
What he did next was combine that informative piece of research with his own background in computer science (he had a degree from Princeton University) and opened his online bookstore in 1994. Two months after starting, Amazon was generating sales of $20,000 a week!
A bit of research turned into a successful business.
Research — look for what is changing in society. Study patterns — things like demographics, population change, economic change, changes to laws, banking, finance, migration.
Start to assemble a research map and look for the opportunities. Like Jeff Bezos came upon his idea for Amazon, try a little research-gathering yourself. It isn’t difficult.
Entrepreneurs keep an eye on society and the way things are changing. Shifts in the way we do things — emerging trends and popular new ideas — are business opportunities.
Imitation is not about illegal copying of music or downloads. I am talking about the inspiration for your business that comes from an idea already out there.
With any new business idea, there are always me-toos. Ideas that do the same things, but with a slightly different focus. New Zealand Natural, Movenpick, KiwiYo: they are all just ice-cream sellers. Same core idea, but their stores and presentation appeal to different market segments.
So, have a look around: what can you copy, but put your own spin on and make into a viable business?
The second form of imitation that is popular with new business ideas (and it works) is copying an idea from one geographic area and starting it in another.
If you travel, or are from another country, this strategy is particularly useful for you. Think about what you have seen in other countries that worked as a business but does not exist yet in New Zealand.
If the idea was proven and had a strong following, why not give it a shot? EBay was proven in the US, so Gareth Morgan was convinced that the Kiwi version, TradeMe, would work here.
New lease of life
Why not use an existing or discarded product that is being overlooked, give it a shot of new life, and re-release it as a new consumer ‘got to have’. In Cambodia, high-fashion accessories made from recycled cement bags are a new ‘must have’ product.
Look at your family background for ideas.
Has someone in your family started their own business? What was it in? Are there activities that are unique to your family: things that your family has always done together, talked about together? These can be a great source of ideas.
It is also no surprise to learn that seven out of every 10 entrepreneurs had a parent who was also an entrepreneur or in self employment.
If this is you, then start thinking a little harder about all those dinner-table conversations your parents had about business opportunities. That was a rich ‘sauce’ of ideas in front of you.
If after all these idea generators you are still wanting to come up with a killer idea then try using brainstorming as a technique for releasing your team’s creative abilities.
Gather your team together in a room, along with some charts to write on. You can use anything: paper, whiteboard, blackboard, or flip chart.
Introduce the idea that you are going to brainstorm to come up with some new ideas, and tell everyone the rules. There aren’t a lot of rules when it comes to brainstorming, but they are important.
Here they are:
• No judgements. This is an ideas-only session. Everyone should feel completely relaxed offering their suggestions. Aim for 20 possible ideas.
• Write down all the ideas. You want to capture all the ideas that your group comes up with.
• Springboarding. Bounce your ideas off one another. If someone says something, and this makes you think of another idea, offer it.
Encouragement. You want everyone’s ideas. The moment people start making negative comments in a brainstorming session, all the will to contribute in the group evaporates. So go for it!
This is an extract from the Young New Zealander's Guide to Entrepreneurship by Ian Hunter, PhD. It is published by Hunter Publishing.