6 Steps to Find Breakthrough Small Business Ideas

6 Steps to Find Breakthrough Small Business Ideas

by David Gaudreault, Serial Entrepreneur, Online Marketer, and Personal Branding Passionate

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This article provide 6 steps to find breakthrough small business ideas. A proven procedure to move away from the obvious and find alternatives… alternative to come up with a high potential business ideas that will positively impact your community and ultimately change the world for the better! #businessideas, #howtofindbusinessideas, #smallbusinessideas, #findbusinessideas #businessideasstartup #businessideasentrepreneur #smallbusinessideas #onlinebusinessideas #choosingbusinessideas

There are diverging schools of thought on how to find breakthrough small business ideas.

Some people say that trying to reinvent the wheel is a waste of time, personally I don’ agree. In fact, copying ideas or business models is risky and counterproductive.

There are so many things that still need to be invented or to be improved in the world that you need to push your limits and move out of your comfort zone to innovate, make a difference in the life of people and ultimately change the world!

Although existing business models are tempting, RESIST!

Resist from going in the old distribution model, in transportation, in old school retailing, in the restaurant business, etc. Unless you can reinvent the business models with a creative idea, avoid these easy paths.

As the author of Zero to One and co-founder of Paypal, Peter Thiel said:

EVERY MOMENT IN BUSINESS happens only once. The next Bill Gates will not build an operating system. The next Larry Page won’t make a search engine and the next Zuckerberg won’t create a social media platform. If you are copying these guys, you aren’t learning from them and you are certainly not being creative and innovative.

You may also be interested read: 15 MINUTE BUSINESS PLAN FOR STARTUPS | BUSINESS MODEL CANVAS MADE EASY

Let’s see the six steps to finding a high potential idea.

1-Observe the World from a Macro Perspective.

Photo by Drew Graham on Unsplash

Look at well-known issues like global health, accessibility to medical cares, education, cybersecurity, democracy, industrial waste, traffic, women safety, water access, climate change, adult literacy, over-consumption, inequity.

The list of well-known problems in the world is limitless and they are all waiting for you to come up with creative and innovative solutions to solve them.

So at this stage get a general idea of which global issues appeal to you.

2-Observe the World from a Micro Perspective

6 steps to find a breakthrough small business idea - micro.jpg

Photo by KT on Unsplash

Try to see how these macro problems identified in #1 affect your community on a day to day basis.

For example, how does traffic affects your city?

Do you see deficiencies in the education system? Childhood Obesity problem? Health issue?

Do you see democracy issues?

At your superstore, look at all the products with over packaging or the overly low price of some products that could never be manufactured in a fair trade environment.

In your house, consider the amount of waste you generate in a day!

At this stage, try to figure out how the global issues observed in #1 take shape explicitly in your life and choose the one or two problems you want to spend time-solving.

3-Think Out of The Box

6 steps to find a breakthrough small business idea - think outside the box

Photo by Guillaume Bolduc on Unsplash

Move away from the obvious scenarios and identify alternatives… alternative processes, alternative systems, alternative approaches, alternative models, etc.

Let’s say we look at traffic issues in your city. There are the bold obvious solutions such as building more lanes, adding more roads, adding public transportation, etc. This is obvious and the opportunity is never found in the obvious scenario.

Let’s consider the problem of traffic differently.

If you live in a major city, you are certainly aware that finding a parking in the city is a real headache. What if we use parking as an incentive to encourage people to do carpooling, a potential solution to traffic.

Let’s say we provide a free parking to anyone doing carpooling?

By filling the empty seats in the cars, it will instantly decrease the number of cars on the road, relieve the public transportation and decrease the needs for new roads and additional infrastructures.

So instead of investing millions of dollars of public funding to build new roads, you imagine a creative model that fixes one person problem, “finding a parking”, and leverage it to fix another bigger problem, “traffic”.

It is exactly what Marc-Antoine Ducas, a serial entrepreneur from Montreal, did with netlift.me.

His company rents parking lots all around the city and provide a free parking to anyone doing carpooling using their mobile app.

With this solution, Marc-Antoine and his team were able to think out of the box and find a simple solution, a new alternative, a way to better organize an existing system, to bring a solution to a big problem.

6 steps to find a breakthrough small business idea - netlift.me

This example demonstrates that you don’t need to be a technological genius to come up with a genius small business idea.

The minimum viable product, the mobile app was fairly simple although they now have quite advanced algorithms.

The real challenge was to imagine the right business model and put all the pieces together to make it work.

So at this stage, you should consider all aspects of your identified problem, read about it a lot to become an expert about everything related to your identified problem.

4-Test Your Solutions.

Now that you are an expert on your issue, you should have the knowledge and global vision to identify potential innovative solutions, alternatives.

These solutions are in fact hypothesis, assumptions because you don’t know if any of your solutions will actually work.

In the NetLift example, Mark did not come up with the right solution overnight. He tested different concepts intensively for over a year before coming across the right solution.

So what you need to do at this stage is to test each of your assumptions, measure the response, adjust your solution and do it again until you get a viable concept.

It takes time, but the moment you discover a virtuous cycle, you got your big idea for your small business and if you execute it right it will forever change your life.

5-Challenge Your Concept With the 7 Question Test

It was not randomly that I introduced Peter Thiel’s book earlier. In his book Zero to One, he provides a set of 7 useful questions to measure the validity of your breakthrough small business idea.

6 steps to find a breakthrough small business idea - Zero to One
  1. The Engineering Question: With your idea, are you creating breakthrough technology or significant incremental improvements to a product, a process, a model, etc.?
  2. The Timing Question: Is now the right time to start your idea? You can have the best idea in the world if the market is not ready for it, it will be a flop. Sometimes when you are too ahead of your time, the industry is just not ready for it.
  3. The Monopoly Question: Are you starting with a big share of a small market?
  4. The People Question: Do you have the right team (or do you have the capacity to bring together the right people to turn your idea into a reality)?
  5. The Distribution Question: Do you have a way to deliver your product to your customers?
  6. The Durability Question: Will your market position be defensible 10 and 20 years from now?
  7. The Secret Question: Have you identified a unique opportunity that others don’t see?

You don’t need to answer positively to all 7 questions, but if you reach 5 or 6, consider that you are in a very enviable position.

6-Challenge Your Small Business Idea With a Basic Mathematics Test

Too often entrepreneurs start executing an idea without doing the simple math to validate the financial viability of their idea.

By estimating simple metrics like profit margins, sales, and market size, you can quickly evaluate the financial viability of an idea.

Usually, if you followed the previous steps, over the long run your target market should be of significant size and if you successfully found an innovative idea, this market should be attainable.

Ideally, you should be targeting a large portion of a smaller market, a niche.

Back to our example, let’s take a look at the simple math to validate the financial viability of this Netlift :

  • The main cost is the parking rental which I estimate to be about 400$/parking/month.
  • A viable price per ride would be 5$/ride/person.

As a side note, these numbers are not rocket science, I’m just making some realistic assumptions for the purpose of the demonstration.

  • Average number of passengers per ride: 2
  • Average number of drivers per parking per day: 3
  • Occupancy rate: between 80% and 100%

Occupancy 80%: 5$ X 2 passengers X 3 X 0.80 X 30 days = 720$ /per parking/month

Occupancy 100%: 5$ X 2 passengers X 3 X 1 X 30 days = 900$ /per parking/month

Before any optimization, we get revenue per parking between 720 and 900$ which represents a gross margin between 44% and 55.5% which is viable in term of margin.

Considering a very conservative number of 400 parking spaces for a medium size city, the monthly revenue would be between 290k$ and 360k$. This has clearly the potential for a home run!

From the moment you get a viable concept, all your efforts should now be transferred to the execution. It is one challenge to find a good idea, but it is another even bigger challenge to execute it. It usually starts with a Business Model Canvas, a model used to draft the main blocs of your business.

Learn more about Business Model Canvas: 15 MINUTE BUSINESS PLAN FOR STARTUPS | BUSINESS MODEL CANVAS MADE EASY

Conclusion

As a wrap-up, we have seen the 6 steps to find a breakthrough business idea are :

  1. Observe the world from a macro perspective
  2. Observe the world from a micro perspective
  3. Think out of the box
  4. Test your solutions
  5. Challenge your concept with the 7 question test
  6. Challenge your small business idea with a basic mathematical test.

If you follow these steps, you will not only start a small business, but you will start a high potential business that will most likely impact millions and change the world in its unique and own way!

You may have noticed that I used the word breakthrough “SMALL” business ideas throughout the entire article, while these six steps can clearly lead to a great success and therefore a big business.

I consider that all businesses start small and require a lot of work.

In order to succeed, make sure you start your business with a breakthrough business idea and build the foundations of your business in your community. Develop and test your model with your people and make sure to have a solid viable concept before going out to impact more people in other areas.

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Who is David Gaudreault?

David Gaudreault Bio - David's Way

I'm an entrepreneur, a maker, an online marketer...and Personal branding passionate.

I help entrepreneurs develop two essentials for building a successful startup: (1) building a strong personal brand and (2) building solid foundations of passive incomes to gain professional freedom.

I also help entrepreneurs find their big ideas, execute them right, impact millions with their businesses, and change the world.

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