• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Penpoin

Better knowledge. Sharper Insight.

  • Management
  • Economics
  • Finance
Business and Strategy

Business Idea: Sources and Criteria for a Good Idea

Updated on January 16, 2023 · By Ahmad Nasrudin Tag: Business Idea, Starting Business

Business Idea Sources and Criteria for a Good Idea
You are here: Home / Management / Business and Strategy / Business Idea: Sources and Criteria for a Good Idea

What’s it: A business idea is a concept or market opportunity to make money by creating and commercializing a product. In other cases, it may not be for-profit purposes, but rather for social purposes as is a social enterprise, where profits are allocated to maximize social benefits instead of owner wealth.

Advertisement

New business ideas can emerge in all industries. For example, in the primary sector, you may find opportunities to market organic vegetables to consumers around your home. You see, your neighbors are interested in it. Or, you make clothes or crafts to market in the local market. Or, you might also be interested in starting a dropshipping business, where you buy goods from third parties then ship them directly to your customers.

Where do business ideas come from? What makes a business idea promising and worth working on? Let’s discuss them one by one.

The main sources of business ideas

Business ideas can come from anywhere. It may be from what you are passionate about, previous work experience, exposure from experts or business owners, or solutions to your previous problem or someone else’s problem.

  • Own skills or hobbies – skills, interests, hobbies are great sources for making money and starting a business. You can monetize it, for example, by building a website.
  • Personal experience – bad experiences can be an inspiration to find solutions and business opportunities. If a lot of people have a similar problem, you might monetize a solution to the problem. You can also seek inspiration for new businesses from the experiences of others.
  • Previous work experience – the workplace isn’t just about earning a paycheck; it’s also about gaining new skills, experience, and business opportunities. You may be able to fill in the gaps for solutions to problems your former company is facing.
  • Conferences and exhibitions – for example, attending a franchise conference can be an opportunity for you to work with franchisors and open outlets in your neighborhood.
  • Small budget market research – surfing the internet is a valuable resource for finding business opportunities. For example, you can learn from a business idea abroad and adopt it in the local market.

What makes a good business idea?

Generating a business idea is challenging. However, having a few ideas is not enough to start a business either. You have to choose which one is the most valuable and promises to make money. It is also a challenging job.

What makes a good business idea? Here are the criteria:

  • Profitable – enough to generate revenue and outweigh the costs.
  • Innovative – creating something new and never existed, such as the computer at the beginning of its invention, developing a new product from an existing model such as developing a laptop, or improving an existing product such as introducing a new laptop variant.
  • Solving problems – offering solutions to existing problems, which cannot be solved using existing products on the market. The product may offer a cheaper or better solution.
  • Substantial demand – enabling your business to grow and achieve higher economies of scale to lower costs and increase profits.
  • Growing market – promises the potential for further growth so the business can continue to generate revenue.
  • Sufficient resources – you have or can accumulate sufficient resources to run and make the business successful.
  • Resilience to market dynamics – you have a great opportunity to grow your business. For example, intense competition can make your business close, even before covering the initial capital.

Further reading

  • Business Idea: Sources and Criteria for a Good Idea
  • What are the characteristics of a good business idea?
  • What are sources of business ideas?
  • Where Do Entrepreneurs’ Business Ideas Come From?
  • Business Idea: Original Idea or Adaptation?

Tag: Business Idea, Starting Business

Economic Growth and Economic Development: Their Differences and Relationships

Economic growth has a close relationship with economic development. We need economic growth to support

Economic Growth: Factors, Importance, Impacts, How to Measure It

Economic growth refers to an increase in output in an economy over time. It can be short term or long term. In the short

Gini Coefficient: Meaning, Calculation Method, Data, Pros, and Cons

What's it: Gini coefficient is a statistic of economic inequality in a society. It tells you the distribution of income

Advertisement

Needs: Definition, Example, Type

What's it: Needs means requiring something because it is essential. For example, we need food, water, and shelter

Wants: Definition and Examples

What's it: Wants are hopes to have or fulfill something. If we want something, we expect to be able to buy it and

Hedge Funds Strategy: Macro, event-driven, relative value, and equity hedge strategies

Hedge funds rely on several strategies to make money. Hedge Fund Research, Inc. (HFRI) divides them into four

Hedge Funds:  Examples And What Do They Do?

What's is: Hedge funds are pooled investment funds by private investors, established in limited partnerships, and

Primary Sidebar

TOPIC

Accounting and Finance Business and Strategy Financial Statements Human Resources Investment Macroeconomics Marketing Microeconomics Operation

Advertisement

LATEST POST

  • Hedge Funds Strategy: Macro, event-driven, relative value, and equity hedge strategies
  • Leveraged Buyout (LBO): How it Works, Funding Sources, Criteria for Target 
  • Private Equity: Examples, Strategies, Targets, Its Ways To Make Money
  • Economic Growth and Economic Development: Their Differences and Relationships
  • Where Do Comparative Advantages Come From?
  • Three Injections In The Economy

MOST POPULAR

  • Business Size: Definition, Measurement, Classification
  • The Role of Business in Society and the Economy
  • Span of Control: Importance, Types, Advantages, Disadvantages
  • Government Intervention: Examples, Reasons, and Impacts
  • Sociocultural Environment: Meaning, Variables, Impact on The Business
  • What Are the Positive and Negative Effects of Industrialization?

Footer

SEARCH

POPULAR

  • Business Size: Definition, Measurement, Classification
  • The Role of Business in Society and the Economy
  • Span of Control: Importance, Types, Advantages, Disadvantages
  • Government Intervention: Examples, Reasons, and Impacts
  • Sociocultural Environment: Meaning, Variables, Impact on The Business

TOPIC

Accounting and Finance Business and Strategy Financial Statements Human Resources Investment Macroeconomics Marketing Microeconomics Operation

Copyright © 2023 · About Us  · Privacy Policy and Disclaimer  ·  Terms of Use  ·  Comment Policy  ·  Contact Us