How to find a business idea?

There can be at least three approaches to finding a business idea

• effectual way
• causal way
• through personal experience

The effectual way: This approach has already been explained earlier. It involves looking at your resources (skills, experience, contacts, capital, location, land, etc.), and working out what type of business one can build using the existing resources. This is the most pragmatic approach and can lead to results much quicker than other approaches.

The causal way

This approach attempts to find a market gap. This begins with analyzing market trends, and coming up with an emerging customer need or want which cannot be fulfilled with existing products or services in the market. This approach involves using scientific or statistical techniques to work out the details, and extent of the demand. The market size if found substantial, the product or services is which would fill the gap is considered viable. This approach involves too many theoretical assumptions and pushes the entrepreneur into hubris where it becomes difficult for him or her to realize the changing market dynamics or any mistake in the analysis. This approach often leads to inaccurate results but creates an impression of accuracy, and precision in analysis, often deluding the entrepreneurs, and investors about the hidden incorrectness. This approach must be avoided.

Through personal experience

This approach is perhaps more commonly used by entrepreneurs. When you experience a personal need (or problem), you often think or even develop a solution to address that need. The same solution may also be beneficial for others, so it is converted into a product or solution, and a business is built around the same to seamlessly deliver the solution to the others in need. The personal experience of going through pain or personal desire to solve the problem also becomes the driving force behind the entrepreneurial idea. The entrepreneur becomes passionate, and subsequently works harder, and with perseverance to convert his or her idea into a reality. The challenge is the lack of resources which the entrepreneur may not possess. So it may take a longer time to gather the resources necessary to convert the idea into a real business.

It is recommended that one may start a business first using the first option (effectual way), and once successful then divert the resources toward the idea emerging from the third option (through personal experience). One will not just have sufficient financial resources to experiment on the proposition, but will also have the necessary experience of building a business, which is a whole lot more crucial than financial capital. Another alternative to gain experience is to work for a small company operating in a market domain where your idea also fits in, finding such a job will not be easy of course. If you are lucky enough to have such a job then you can use the experience, and try to save some money, and then try to start your own company. But leaving a job after a few years of experience, when you may also have a family to feed is not going to be easy. The social pressures in Pakistan make it even more difficult.

Remember! A business idea is just to set your initial direction, it may change drastically as you move along. The problem you are trying to solve may remain there, but the product or service may change as per what the customer needs or what you can offer keeping in view your available resources. You must not become too emotionally attached to the product or service you may have worked hard to develop! Customer advice must be involved at every moment of product development. How this will be done, is explained next.