How to develop a business idea
Enterprise Nation founder Emma Jones gives us some of her tips for developing your own business idea.
Every great business starts with an idea. But coming up with your own can be difficult.
Will my business idea work? How should I protect it? Is it a good idea to begin with? These are all questions that any entrepreneur should be asking themselves before registering a new company.
Here, Enterprise Nation founder Emma Jones provides some tips on how to come up with a business idea, and protect it.
Will my business idea work?
The best way to come up with your own business idea, ask yourself three questions:
- Have you spotted a gap in the market? Tried to buy something that you just can’t find? Maybe others are looking too.
- What is your passion, hobby, or skill? Turning this into a way of making a living is a great way to run a business as it never really feels like work!
- Have you seen someone do something that you think you can do better? Could you produce a similar product with a more luxury feel? Deliver it in a different way, or for a different price?
The answers to these questions will help you come up with an idea for your own business.
The ideas we’re seeing perform best in the market are those that are ‘niche’.
By this I mean a business idea that delivers a clear product or service to a clearly identifiable audience, for example shoes to ladies with big feet, or HR services to the food industry.
Coming up with a niche idea keeps your marketing costs low, as you know where to find your audience, and it keeps customer loyalty high as customers can only get what they’re after from you.
Evaluating a business idea
It’s important to take some time to evaluate your business idea after you’ve come up with it so that you can minimise any unforeseen issues that may impact the realisation of it down the line.
A great place to start on this would be to test out your idea with the friends and family focus group.
Ask those close to you if they like the idea and if they feel it plays to your strengths.
After you’ve done this this, take the idea a little further and test it with market research to get some data behind your idea.
You may know the famous story of how Innocent Drinks started. The three founders who thought they were on to a good idea needed to test if the market felt the same.
To do this, they took their smoothies to a local festival, and above their stand had a sign saying ‘If you think these smoothies are good enough for us to give up our day job, put the empty bottle in the ‘yes’ bin. If not, the ‘no’ bin.’ At the end of the day, the ‘yes’ bin was overflowing, they gave up their jobs, and Innocent was born!
Share your idea with potential customers. Do this online using tools like Surveymonkey and Wufoo or meet customers face to face at markets, popups, or with a clipboard on the high street or school yard etc.
What you want to know is:
- do people like the idea
- would they pay for it
- how much would they pay
- where are they currently shopping for such a product or service
- and what do they like (or not like) about their current provider
Another great route for testing your idea with the market is through a method known as crowdfunding.
This is where you present your idea on a website such as Crowdfunder, Kickstarter or Indiegogo and the ‘crowd’ decides whether they like your idea enough to financially back it.
Some people tell me they are nervous about sharing their idea, for fear that someone will steal it. But rest assured, in most cases, no-one else could deliver an idea the way you have in mind, so don’t be afraid to share it to get feedback,.
That said, any responsible business should take some precautions to keep their information secure. This extends to the idea behind the business itself!
Let’s take a look at how to do this.
How can I protect my business idea?
You can protect your idea through intellectual property protection, which comes in four forms:
- Patents - this is when you’ve come up with a groundbreaking idea or new invention. Patents can be expensive to file but it does leave you with the option to licence it out for others to take to production once protected. So if, for whatever reason, you decide not to produce your product yourself, you can still make money off of your idea.
- Trademark - you can register a trade mark to protect your brand, eg the name of your product or service. It costs £170 to register a trademark via the Intellectual Property Office in one class and then £50 for additional classes.
- Copyright - this comes automatically (so there’s no need to register) and applies to work you have completed such as illustration and photography, written work, software development etc.
- Design - this is to protect the look or appearance of a physical product you may have designed, such as a textile design or shape of a handbag. Registering it means your design is protected for 10 years. The fee to register a first design is £60.
Visit the Intellectual Property Office (IPO) website to register and find out more on all these forms of intellectual property.
If you're struggling to work through the legal ins and outs of protecting your business idea, you should consider getting out and attending a workshop on the subject. This way if you have any questions, you can ask an expert The British Library Business and IP Centre hosts these in London and across 9 regional libraries to meet with intellectual property experts.
With your idea determined, tested and protected, all that’s left to do is turn that idea into business reality through delivering on what you’ve promised to your customers.
To find out more about starting and running your business, head over to our Small Business Knowledge Centre.