New businesses are the backbone of the economy, especially small enterprises. There are over 600,000 new small businesses in the United States every year, according to the Small Business Administration. They provide almost half of all employment in the country and bring in billions of dollars worth of revenue to the country.
There are many kinds of small businesses, and a lot of them belong to massive chain franchises owned by different franchisees but belong to the same corporate family. This includes profitable Subway franchises and more niche businesses. However, you may want to open something that’s complete your own.
You can use small business loans to open your own enterprise. But if you want your new company to have any hope of succeeding, you’re going to need a stellar business idea.
Below are five methods you can use to come up with profitable and successful small business ideas.
Look for Niches
Many small businesses fail because they don’t have adequate profits. This low cash flow issue can be caused by lack of customers. If you want to open a successful new enterprise, you’ll need to find a profitable niche. A niche refers to a stratum of consumers that no one else is catering to. Identify a niche that can give your business a steady supply of customers.
For example, a few years ago, there were relatively few businesses who catered to the needs of vegans. Today, many small shops and food providers make a tidy profit by offering vegans with alternative food supplies.
Go to a Different Locale
If you feel like your current neighborhood has enough businesses to cater to the needs of its residents, consider moving to a different area. The temptation to start a business in the place where you reside is understandable, but if your current community is already saturated with all sorts of enterprises, you will come up against heavy competition.
Instead, look for a different area where with fewer enterprises. One neighborhood may need restaurants, or a laundromat or a pet supply store. Determine which of these companies the community may need the most and start filing for permits.
Another great way of determining what your small business should be is assessing what your current skill set is. Unless you have a very generous endowment or an angel investor, you will play an integral role as one of your company’s first employees. What are your skills? Did you undergo any valuable training from your previous business experience?
For example, if you used to lay pipes for a plumbing business before opening your own business, you may want to open your own plumbing contractor company. This means that you’ll have the experience, the contacts and the training necessary to provide your customers with excellent services.
Provide a Solution
Every customer that enters a shop or a company is looking for a solution. They could be looking for a meal to satiate their hunger or If you want your small business to have a regular stream of customers, you may be able to do so by providing a solution for common or prevalent problems. People will always need food, medicine and other services. It’s determining which specific problems you’re going to solve that can lead you to a marvelous business idea.
For example, your neighborhood may have plenty of groceries and food marts, but do they have a specific store for Asian ingredients or for artisanal pastries? Determining what specific problems you can solve with your new business can be the key to staying open and profitable for a long time.
While this may seem counterproductive to starting a novel business, remember that the needs of your potential customers should still be the priority. While you could be more interested in opening a small art gallery in your neighborhood, unless you can prove there’s a booming market for art in the community, you could be closing down in the year.
However, if there is a large market for, say, Korean beauty products or the need for a wash-and-fold, you should forgo starting something novel for opening something successful instead. If you start a successful in slightly unoriginal business, you can you the profits of such endeavors to finance your more eccentric enterprise.
Opening a new business requires courage, determination and creativity. Coming up with a successful business idea requires all three skills as well. Doing it right and choosing the best idea is essential to make money and make your dreams come true.