A business idea is a concept envisioned by individuals or teams that can be monetized through the delivery of products or services. Serving as the foundation for entrepreneurial ventures, a robust business idea is essential for the development and success of new enterprises. It encapsulates the initial vision that guides market research, product development, and business strategy, ultimately contributing to economic growth and innovation.
Characteristics of a Promising Business Idea
A business idea is often linked to its creator who needs to identify the business's value proposition in order to launch to market and establish competitive advantage.
For businesses, this could mean: creating new ideas, new product development through research and development, or improving existing services. Innovation can be the central focus of a business and this can help them to grow and become a market leader if they execute their ideas properly. Businesses that are focused on innovation are usually more efficient, cost-effective, and productive. Successful innovation should be built into the business strategy, where you can create a culture of innovation and drive forward creative problem-solving.[1]
These successful companies were built on sheer innovation and we can see how valuable they have become in the short time they have been around or have been focusing on innovation. When Tesla's value is compared to that of General Motors, we see that the market capitalization of General Motors is $53.98 billion today [5] in which the company has been around since 1908 [6] whereas Tesla was founded in 2003 [7] and has achieved 50% of General Motors value within 12 years.
A unique selling point (USP) is the factor that makes a company or a product stand out from its competitors, whether it is through; pricing, quality, customer service or innovation.[8]
Each successful company has a unique selling proposition (USP). A USP can be created through the element of being first to a market, for example Uber was the first company to allow for taxicab hailing via mobile app.[9] Because Uber had reached this market first, it had a USP and therefore it received loyal customers. However; with fierce competition copying Uber's business model, Uber has had to develop its service through innovation. [1][10]
Business ideas that solve problems are fundamental to developing the world and companies such as Curemark are one of many who do this. Curemark is a biotech company founded by Joan Fallon, who noticed that a lot of the children she treated were low on an enzyme for processing protein and since then she has quit her job and has built Curemark to solve this problem. Curemark has now raised $50 million and is on its way to solving a problem that truly exists.[11]
Profitability is a business's ability to generate earnings compared to its costs over a certain period of time.[12] This is possibly the most important aspect of any business idea in the long term, as this is what makes a business survive in order to keep having the impact that it has. Profitable ideas need a strong revenue stream against its costs and this tends to create the success of the business, however, some companies defy this and make losses to begin with, yet are still exceptional business ideas that are worth billions.