In the following paragraphs, you will have the opportunity to understand the differences between a business idea and a business opportunity, in addition, you will learn about the existence of four key indicators to recognize business ideas and, finally, you will discover fifteen effective signs that will allow you identify new business opportunities. Go ahead!
Difference between a business idea and a business opportunity
The business idea is often confused with the business opportunity, however, they are two concepts that differ in their essence.
In the first place, it can be said that a business idea refers to the mental conceptualization of business activity and the intention to undertake it.
On the other hand, a business opportunity is understood as the solution to a problem or the satisfaction of a need that exists in a market.
According to Vigo (p. 45), a business opportunity proposes a solution to a detected problem by offering products or services; detects the degree of acceptance of these solutions in the market, and applies different communication models (strategies, marketing, advertising, etc.) to create or increase the value perceived by the customer. These three elements are necessary to define an opportunity and differentiate it from a simple idea. If only one or two of these concepts were available, it would be a business idea with the potential to become an opportunity in its own right.
business idea vs. Business Opportunity
- A business opportunity is a more complex construct than a business idea.
- Among many ideas, only a few will come to be considered opportunities.
- What matters is how the entrepreneur works on an idea to turn it into a viable business opportunity.
For an idea I pay 5 cents; for implementation, I pay a fortune! (Freire, p. 46, paraphrasing Drucker)
Four indicators to identify business ideas
Being successful in an undertaking consists in identifying our knowledge, abilities, capacities, and limitations (our own and those of the surrounding conditions); combining them with the detection of opportunities in a specific context, to generate quick solutions and make them reach potential clients.
Nine out of ten ideas carried out are born because the potential entrepreneur discovers a need or an opportunity from interacting with a branch of the market. Freire (p. 45)
Every business begins with an idea to solve or improve a need, a desire, or a simple expectation, be it local, regional, or even global, by creating satisfiers. There are several options to identify an idea that ultimately becomes a business opportunity, which we can mention:
Understood as issues whose solution generates business opportunities (economic, social, environmental, etc.) for an individual or organization.
The absence of an element whose conquest can create new marketing options in a given population. The needs can be essential or occasional according to the purpose of their orientation and the level of satisfaction perceived by the client.
3. Areas of opportunity
They can be defined as the elements that can be improved, to increase productivity and efficiency in a business or to generate a positive and relatively different experience for the client.
Defined as the ability of a process to add new value to any activity, in the search for specific results associated with an improvement and whose implementation generates commercial benefits for the organization. Due to the need for innovations to be associated with a positive perception of the business, they are usually mainly applied to products and services.
Do something that people want… There is nothing more valuable than filling an unmet need. If he discovers that something is not working and can get it to work and offer it to others, he has a gold mine in his hands. Paul Graham quoted by Kaufman (p. 26)
15 signs to identify new business opportunities
Business opportunities can be defined as moments or environments conducive to executing business ideas. Here are 15 signs that will help you identify new business opportunities and thus take your idea to the next level:
1. Detect underserved or overserved clients
It is possible to create new business units based on clients who have the perception of not receiving the value for which they are paying. Also, adjusting the offer of services or products according to their needs promptly, without it being excessive, and with a more affordable price.
2. Look for inefficiencies in the market
Currently, it is not enough to have an excellent product or service, in addition to this, the means that allow increasing the possibilities of choice for the end-user are very important. The objective is to achieve differentiation in cost, service, or logistics concerning competitors.
3. Identify new demographic or market segments
Part of the premise that establishes “there are no typified consumers, but moments of consumption.” The non-user must be the target, those groups that are not accessed or that simply are not yet identified because no one has offered them a different way to meet their needs.
4. Look for unresolved frustrations
Every day there is a large population that faces the adoption of new procedures (regarding products, processes, or services) that hinder their well-being, generating discomfort and frustration regularly. This drives them to look for solutions (on many occasions only temporary) that facilitate these procedures, generating significant savings in time and in the level of complexity presented by the change they require.
5. Incorporate new technologies or products
All technological implementation or development of new products aims to facilitate the level of daily life for people, however, it is not limited to the simple fact of acquiring technologies, it also implies learning to be able to get the most out of it. The above described opens a window of possibilities for the development of new innovative projects that allow improving (and sometimes radicalizing) the characteristics of a product, process, or service; in addition to the creation of a wide range of commercial solutions complementary to these.
6. Due to derivations of new legislation or policies
Frequently, organizations (public or private) experience changes that require the adoption and implementation of new legislation or policies, thereby giving rise to the need to find alternative solutions. These solutions allow the introduction of new business opportunities in it to assimilate and prevent the risks involved in the dynamics of change.
7. Through the possibility of identifying mechanisms for the elimination of traditional barriers
This business opportunity seeks innovative solutions whose vision breaks with the “status quo”; the change in traditional schemes (although within the regulatory framework) is a priority if a response is required to complex problems that have been partially resolved or whose solution is not satisfactory; this requires the identification of a problem in which its solution is strongly tied to the limitations of its environment.
8. Adapt incorrect competitive variables in saturated markets
The identification of the main characteristics of a product/service and the reason (value) for which it is purchased in a given market, opens up new marketing and penetration opportunities. Adapting the product based on what makes sense to the user for its acquisition, allows the creation of new sales strategies and increases the profit margin in the same market.
9. Adopt solutions (products, processes, or services) that work elsewhere
When a market is saturated, it is best to travel and look for new business proposals that can work in our location. Understanding that, when trying to replicate these new business opportunities in a different location, it is not only necessary to imitate the concept, since the success of the implementation is very strongly linked to the process that governs the operation of the business.
10. Identify current trends
The identification of patterns/trends (assisted with statistical tools) is a great possibility for creating new business opportunities, in which the surveillance of the environment allows for identifying and predicting the products/services that are continuously appreciated and requested by the market.
11. Diversify the saturation based exclusively on a method of service or process
For the development of new business opportunities, in this case, the adoption of technological and information tools is extremely useful, since the market generally seeks means that facilitate said services or processes in the least amount of possible operations; in addition to a high level of information and efficient logistics.
12. Based on the pragmatic ideals of a community
There are businesses in which the client seeks to find practical and specific solutions for a problem/need. These business opportunities arise in a specific community and it is possible to identify them according to the characteristics of its population, customs, location, and climate, among others.
13. Identify new stress situations in a population
As cities grow, new needs and problems arise that cause stress in their population. But in addition to this, new business opportunities arise as a result of innovations that allow mitigating that stress; The solution is to find the source of the stress and create the means to reduce the adverse effects in order of priority for the market.
14. Products or services associated with a platform
Some products or services function as a platform for the creation of new elements associated with improving or increasing their operation and protection. They can arise as derivations or complements of the platform, and their level of complexity varies according to the technology and precision required.
15. Locating new lines of business within the organization
In the case of an established company, it is possible to find new marketing options from products or services that arise as a “spin-off” (alternate), which comes from the production and logistics processes. Even on some occasions, waste elements for the business, only require an additional thread for its use.
- Freire, Andy. Passion for entrepreneurship: From the idea to the harsh reality. (2012) Penguin Randomhouse.
- Kaufmann, Josh. (2011) Personal MBA: What you learn in an MBA for the price of a book. Penguin Randomhouse.
- Megias J. (2013) Ten keys to identify new business opportunities.
- VigoCastro, Pedro Javier. (2015) Entrepreneurial attitude and business opportunities. Own ideas.