3 Tips for Choosing a Business Idea

By Braveen Kumar 

The small business ideas we’ve covered might be easier to run when it comes to logistics, but that doesn’t make them easy. There are at least three things you should keep in mind as you consider your options, no matter what business you decide to start.

1. Focusing on a niche makes marketing easier

As with any business, marketing is what unlocks your success. It’s not enough to know that there’s demand for your products—you need to figure out ways to reach the people that are most likely to buy them. You need to get the right visitors to discover your products.

Luckily, marketing is a lot easier when you’re catering to a specific audience or identity (e.g., vegans, board game lovers, photographers in your city). You can produce social media content that resonates with these people or run ads that target their interests. Taking this approach also helps you project a consistent brand because you’ll have a more specific idea of who exactly you’re talking to.

Think about how you can zero in on a specific audience for your products and how the business you build can serve them. If you already have a sizable audience (a blog, a YouTube channel, or an Instagram account), maybe you can even find a way to base your business off of that existing audience.

2. Pricing is about more than profit

Price your products too low and shoppers might assume they’re low quality. Price them too high and you risk scaring some customers off. In any case, you’ll need to find a sweet spot that also lets you factor in the cost to acquire customers and offer discounts, especially if you plan on paying for ads.

With many of the small business ideas we’ll explore in this post, you may not be shipping your products, but you still need to cover the cost of shipping. Consider your shipping costs and how they will vary in the different countries you want to serve.

Many online sellers try to bake their shipping costs into their retail price so they can offer free shipping, or at least a reasonable flat rate. Others focus on encouraging shoppers to add more items to their cart with conditional free shipping (e.g., free shipping on orders over $50) to maximize their profit.

At the end of the day, your prices can be tweaked and you can experiment with a variety of pricing strategies until you find one that works for you.

Photo by Andrea Piacquadio from Pexels

3. Test, learn, and grow as you go

The pursuit of perfection can be one of the biggest hurdles in getting a business up and running. Keep in mind that nothing is set in stone.

Products can be swapped in and out fairly easily (especially when you’re not stuck with stock). Your store can be redesigned. Your prices can be adjusted.

You can switch to a better supplier. And you can validate all of these decisions based on the dozens of signals you have at your disposal (traffic, how much time people are spending on your site, reviews, abandoned carts, etc.).

If your idea just isn’t working out the way you planned, think about how you can pivot before you quit.

There are aspects of your business you can always salvage if you try a different product or approach. The brand you invest time into creating and the followers you amass on social media or in your email list can be assets you repurpose for your next business idea.

Supply without as many demands

Thanks to a combination of technology, third-party suppliers, and the ability to quickly test ideas online, it’s easier than ever to build a business and start making sales without getting caught up in sourcing products, renting space, and managing inventory.

With this approach, you can test ideas before you invest in them, or start making money on the side without all the inventory-related commitments that might stand in your way.

The small business ideas covered above can even be combined in a variety of ways to start a business that’s uniquely yours. If the idea of sourcing, storing, and shipping inventory kept you from starting a business before, begin with an inventory-free, low-investment business model and grow from there.

Small business ideas tips and FAQs

How to start your own business

To start a business, you need more than just a dream. To put the wheels in motion, you’ll need to:

  1. Use the time you have available. It’s good to have a balance of ambitious and realistic with your business aspirations.
  2. Identify a business idea. This could come from your personal interests, a market opportunity, an experience—anywhere, really.
  3. Validate your business idea. This is where you identify if your idea is viable or not. Are people willing to spend money on this?
  4. Find a business name. A strong name should be short and simple, memorable, and original.
  5. Make a plan. Your business plan is critical for keeping your business on track, as well as securing partners, investors, lenders, and more.
  6. Understand business finances. Open your business bank accounts, secure funding, and set up strong bookkeeping and accounting processes.
  7. Develop your product or service. The fun part! This is where you bring your product or service idea to life.
  8. Pick a business structure. Your business structure influences taxes, operations, personal liability, and more. Choosing the right structure is about balancing the legal and financial protections you need with the flexibility offered by different options.
  9. Research licenses and regulations. Your business is subject to the laws governing businesses in your area, as well as laws and regulations specific to your industry. It’s important to understand this to avoid bigger problems down the road.
  10. Select your software systems. Accounting, email, ads, project management—you need an entire tech stack to run your business.
  11. Find a business location. Identify where you can open up shop based on space, retail needs, and fulfillment needs.
  12. Plan workload and team size. If you plan to do all of the work yourself, you’re limited by the time you have available to invest. If you plan on hiring help, you’ll need to account for those costs—as well as the time involved in finding and onboarding freelancers or employees.
  13. Launch your business. Leverage your network, build buzz with promotions, and test paid ads to get word out about your newly launched business.

How to come up with business ideas

There are many ways to come up with good business ideas of your own. You or someone you know might have a poor personal experience with a company—and you know you can do better. Or maybe there’s a complete gap in the market: for example, demand for a specific product but no one meeting it. Other ideas come from everyday moments, in the shower or right before you fall asleep.

How to brainstorm business ideas

If you’re feeling stuck for business ideas or want to come up with more, there are a few ways to brainstorm even further. Write down all your ideas. Keep a brainstorming board, be it tactical or digital, and plaster your ideas there whenever they come to mind. Then revisit it with fresh eyes. There’s power in numbers, too. Recruit help from colleagues or friends and family to brainstorm new ideas. Survey your existing customers or audiences and get their ideas. Look at what people are saying on social media or searching for online. Start with lots of ideas and then refine your list to the top ideas to explore further.

How to legally protect a business idea

Entrepreneurs have a few options when it comes to legal protection of their small business ideas, both now and in the future. The right one depends largely on the types of businesses you’re talking about.

  • Copyright. Copyrighting protects your intellectual property, meaning that others can’t use it without your permission. This applies to text, art, photography, music, graphic design, and similar mediums.
  • Trademark. Trademarking is another intellectual property protection. Essentially, you “own” a word, phrase, logo, symbol, or design—preventing others from using it.
  • Patent. This is applicable for inventions—a patent prohibits anyone else from making, selling, or using your invention in their business for a period of time.
  • Confidentiality and nondisclosure agreements (NDAs). These legal documents prohibit people from sharing information as outlined in the NDA.
  • Noncompete agreement. If you hire employees or contractors, you can have them sign this document, which prevents them from working with direct competitors.
  • Workforhire agreement. Another document—this one only for employees—that means any work they do during their term of employment belongs to the employer instead of the individual.
Photo by kelly samuel from Pexels

How to get funding for a business idea

One of the toughest but most important parts of starting a business is finding the money to get your idea off the ground. There are a few ways to get funding for your business idea:

  • Small business loans. Shopify Capital offers both loans and grants to businesses, making it a great place to start.
  • Merchant cash advances. If you’re in a bind and need fast cash, you can apply for cash advances through a bank or Shopify Capital.
  • Investors. Lots of investors look for the next big thing—the types of businesses that go viral. Craft a pitch for your business idea to present to investors.
  • Crowdfunding. Crowdfunding is similar to getting investors, except you need lots of investors who are each willing to make a small financial commitment.
  • Fund it yourself. It’s not realistic for everyone, but low-investment business ideas make it easier to come up with the cash yourself. Just be aware of the risks involved.

Braveen Kumar is part of the content team at Shopify where he develops resources to help aspiring entrepreneurs start and grow their own businesses.

3 Tips for Choosing a Business Idea

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