Great business opportunities often involve unmet needs, low competition, scalability and personal relevance. A common question, however, is how to identify a good business opportunity. In brief, it involves staying observant, asking the right questions and testing your ideas. Join us as we dig into how you can turn everyday problems into successful ventures.
Everyone can solve problems. At its core, entrepreneurship is simply problem-solving. Thus, everyone can be an entrepreneur. It’s hard, but nobody is stopping you.
Whether you’re looking to upgrade your career or venture out on your own, identifying problems and coming up with innovative solutions are crucial so you can find a business opportunity worth your time.
It starts with priming yourself to see and identify problems, which sounds simple but proves difficult in practice. To help, we’ve come up with numerous actionable tips to help you see, find and solve problems to spot any great opportunities that come your way.
Qualities to Look for in a Solid Business Opportunity
The first step in finding the right business opportunity is knowing what qualities to look for—green flags, if you will. Without understanding these markers, you could let a great potential business pass you by, or start a service that doesn’t actually meet customer needs. Below are six common characteristics that can help you learn how to identify a good business opportunity.
1. A True Market Gap
A market gap refers to an unmet need that customers are expressing. This could be through negative reviews or even consumers creating their own solutions in less-than-ideal situations. If there is a large dissatisfaction with a target audience or market, this can be a sign that an opportunity for a business to disrupt the market is ripe.
2. Heightened Demand with Little Competition
Areas that have very high consumer demand but little players in the space is a common green flag for entrepreneurs. For example, when Apple switched from lightning cables to USB-C ports, many online product stores created new products to fill this need, as the demand was low at the time. This is a prime example of high demand with no competition.
3. Ease of Scalability
Scalability—or the ability for a business to grow rapidly and efficiently—is another important marker of a business opportunity. If an idea for a product or service is easily scalable (e.g. it can reach new markets quickly, it can serve a large customer base efficiently) then it could be a good time for you to step in with an idea.
4. Easily Disruptible Industry
An industry that is inefficient, whether due to technological or operational hurdles, can spell a strong opportunity for the right entrepreneur. Companies in a certain space that commonly state “It’s always been done that way” can be a goldmine for business owners who want to change a space, whether it be through new technology, changing company culture or creating better customer relations.
5. Feasible for You to Accomplish
For an opportunity to be a good idea, it needs to be something to accomplish. Consider if you have the time, resources, skills, technology and operational structure to accomplish the solution you’re proposing. No matter how good an opportunity looks on paper, if you can’t accomplish it, move on.
6. A Personal Pain Point
A more intuitive way to tell if a business opportunity has some potential is by assessing if the opportunity contains a personal pain point—something that bothers you that you think could be improved upon. Personal questions can be a small way to start asking larger, more market-focused inquiries to see if there’s a true market need.
How to Set Yourself Up to See Business Opportunities
Now that you know some key factors to look for when scoping out business opportunities, here are some ways you can set yourself up to see the right opportunities day after day. Part of learning how to identify a good business opportunity, in fact, involves positioning yourself to see them, finding problems and brainstorming solutions.
Position Yourself to See Opportunities
Opportunity is all around you all the time. But the larger part of the equation is priming yourself to see it and take action. This process looks different for everyone, but it always includes being present wherever you are. If you often work in co-working spaces or coffee shops, take time to observe your environment.
Strike up conversations with strangers. Immerse yourself in the details you normally miss. Note your observations. Do this often and you’ll create a habit of noticing the world around you in ways you hadn’t before.
Look For a Problem
Although it sounds simple, what you may think is a problem is really only a symptom of a larger underlying issue. For example, you might notice your local coffee shop is losing customers because there is always a 10-plus-person line. You might think the problem is understaffing, but the real problem is a 20-year-old espresso machine that wasn’t built for the volume it sees now. Symptoms are everywhere; problems are harder to identify. Start with your own life and work to dig deeper than the symptoms.
Identify a Solution
This is not the time to reinvent the wheel. You’re going to have a lot of bad ideas, and that’s expected.
Next to your list of problems, throw out ideas for solving them. In the beginning, don’t worry about viability or cost; these are the training wheels for spotting business opportunities. As you prime your brain to observe, identify and solve, alternative ways of thinking will become second nature and slowly improve.
9 Ways to Find a Hole in the Market
Business opportunity ideas are all around us. A simple way to notice an opportunity is to look for a gap in the market—an area where a solution is needed in some form. Here are nine ways to help you learn how to recognize business opportunities in everyday life:
- Upgrade: Take a basic product and add value or status, like artisanal cookies.
- Downgrade: Take a status product and remove the frills, like Spirit Airlines.
- Bundle: Combine multiple products, like a camera and a cellphone.
- Unbundle: Dismantle bundled products and specialize, like a modern typewriter.
- Transport: Introduce a successful product into another region.
- Mass-Market: Scale a product to the national level, like extra-virgin olive oil.
- Niche Down: Capitalize on an ever-segmented market, like a store that sells only lightbulbs.
- Get Bigger: A one-stop shop, like Sam’s Club and Amazon.
- Price: It’s common knowledge that generic brands offer better prices without losing key ingredients.
How to Identify Business Opportunities Through Networking and Research
Knowing how to spot a good business opportunity can also involve interacting with others. While it may be daunting to step into a room full of other business owners or potential clients, it is a critical part of finding the right business opportunities. Here are some strategies you can implement immediately.
- Try using online platforms. A simple online search can bring up a veritable mountain of business programs and online groups that you can join. These groups can give you the opportunity to discuss your opportunities with peers and veterans in the business.
- Get involved on the ground. Instead of travelling thousands of miles to a more prestigious event, consider joining local business groups or workshops in your community. This will allow you to find specific pain points in your area that you can address and confirm with your potential customers—those closest to home.
- Be genuine and authentic. Networking that isn’t done with humility and a desire to connect with others is going to be a zero-sum game. Focus on truly being yourself and not masking the type of business owner you are. You’d be surprised at the connections you’ll make just by being yourself.
What to Do After Finding a Business Opportunity
Though somewhat outside the scope of this piece, knowing what to do when you’ve found the ideal business opportunity is important. Here are some SUCCESS articles to help you find your next steps once you’ve got a great idea in the tank.
- Business Idea Validation – Learn how to validate or confirm a business idea
- What is a Minimum Viable Product? – Learn the ins and outs of an MVP
- How to Grow a Small Business – Simple strategies for busy owners
- AI Tools for Small Business Growth – Leverage AI to boost opportunities
A New Business Opportunity is Just Around the Corner
Evaluating business opportunities is a critical step in finding a successful venture that’s right for you. Problems and solutions are all around business owners, from the technology we use every day to the people who come in to fix our homes. For opportunistic entrepreneurs, everyday situations can turn into opportunities—you just have to know where to look.
Feel like you need a bit more of a confidence boost to find your next big idea? Join SUCCESS+™, a professionally curated set of resources based on your own personal strengths and weaknesses. Sign up now for a 30-day risk-free trial and help your new business idea flourish to its full potential.
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