Selecting a Business Idea

There are several factors which must be considered when selecting a business idea:

  •  Niche market
This is a market which doesn’t consist of many competitors and addresses specific issues. Chances are you will become the leader, provided you offer quality services or products. Picky domains  is one such example. It is a platform where contributors help website owners name a website by choosing a domain name. Already there are a number of clients that have made use of it effectively.

  •    Resources
Always consider the resources that you have in hand and utilize them; this applies both to new and established ventures. Resources could be knowledge, equipment, specialized labor, etc. Once a company builds on its resources, it usually has a competitive edge over its competitors and can easily work to increase its market share value.

One perfect example is that of Jang newspaper from Pakistan - The company utilized its existing resources of reporters and related infrastructure to found a news television channel Geo This gave them an edge over other channels and consequently they now have the highest number of viewer base. Since then they have also expanded further by opening up 4 new television channels.

Resources can also be thought of as competencies that a company possesses.  These competencies vary from one company to another and should gradually be optimized with time. For example Google’s core competency initially was its search engine code. It is however trying to utilize its brand name now to broaden it into internet dominance by introducing new services such as Google docs, maps, Gmail, Chrome, etc.

Companies such as Microsoft and Google also have capital as one of their competencies. Such companies are very stable and tough to compete against. A company should therefore always target making capital as one of its competency.

  •        Address an issue
Companies that work to solve specific issues and problems can easily define their strategy and mission statement. And those who are the first to meet unmet needs usually are the next big thing.

Take Napster for instance. It was the first popular online music sharing service. Although it was surrounded by controversies, it was unique and was always going to capture the market. Similarly Fedex addressed the issue of slow shipping and made it express, eventually becoming a success.

  •       Target market
Providing services and products without even knowing which customer is being targeted will always leave the company unsure how to best present customized solutions in the future for that market. Thus the primary target and the secondary target markets must vividly be kept in mind when selecting a business idea.

Consider GAP Its primary market is a white collar person. Diesel on the other hand targets more fashionable and casual people. Both provide customized products since their target market is clear.

  • Uniqueness
This is the most important aspect to consider. When you have shortlisted an idea, do a market analysis of it and consider the competitors. Ask yourself; how can I provide a better service than the one they are offering? Why should a customer come and buy my services and not theirs?

Be unique and don’t completely imitate someone else’s services. Add a special feature to your service that your competitors are lacking and can’t match. Simple examples could be making your service reliable, cheap, fast, or even custom-made to your customers liking.

Sharp’s example fits here perfectly. Its uniqueness is its command over specialized optoelectronics 
technologies; it invested heavily in it and built multiple products in that domain. Its competitors just couldn’t match the amount of research and development that had gone into the field by Sharp.

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