7 Ways to Identify Real, Money-Making Business Opportunities
Terrified of going "all in" on a potentially poor-performing business idea? This list can help.
Entrepreneurship is on the rise, with over 550,000 people going into business for themselves each month in the United States alone. Of course, it's one thing to start your own business. It's quite another to actually make any money off of it.
So, how can you know if your next great idea really is a great idea? Pay attention -- the following seven tips will help you be better prepared to identify business opportunities that could earn you some serious cash in the not-so-distant future.
1. People are paying for other products in your niche.
One simple way to gauge whether your business has any potential marketability is to find out what people are already buying. Google Trends is an excellent resource for discovering which topics and products are receiving the greatest level of interest.
Examining trends for a product category over time will provide clear insights as to whether interest is waxing or waning for your niche idea. The more market research you perform, the easier it will be to identify your target audience.
2. It solves a real problem.
Successful, scaleable businesses try to solve a problem that consumers face on a daily basis. The more integrated (and seemingly insurmountable) a problem is in your customers' lives, the more vital your solution quickly becomes. Not all problems are created equal, though.
Take large-scale logistics, for example. As Max Lock, a close colleague and 22-year-old CEO of Fleet, told me in a recent email, focusing on needs will always be more sustainable than wants.
"Major industries like logistics continue to face challenges on a global scale due to documentation difficulties and other solvable problems -- I saw it everywhere. Creating solutions to the issues these major industries are actually experiencing is far more useful than trying to address things that most people don't view as a problem. Dealing with the latter would be little more than a waste of time."
Logistics is one thing, but there are a host of real problems from all sorts of industries people face on a regular basis. If you're struggling to discover a money-making opportunity of your own, speak with those you know and trust. They'll likely provide you with the starting point you need to get to work on a marketable solution.
3. You've already made a sale.
It can be hard to gauge whether your product or service will be a success when still working a 9-to-5 job. But, this doesn't mean you can't test out your idea on the side. Providing freelance work through Upwork can help you determine if there's an actual demand for your business services.
Selling homemade items through an Etsy shop will help you find a market for your products. Attempting to make real sales as a side hustle before going all-in on your business will give you a much clearer sense of direction.
4. You understand the costs.
It goes without saying that some business ideas take a lot more financial effort to get up and running than others. A freelance blogger who works from home won't have nearly the same type of overhead expenses as a custom furniture manufacturer. It is essential that you understand the costs of your business before launching your product or service.
Your expenses should directly influence your price point and plans for growth. If you don't have a clear strategy for earning more than it will cost to run your business, you should probably keep your idea on the back-burner.
5. There is a healthy market.
Not all industries are created equal. Advances in technology have made things like travel agencies and video rental stores obsolete. It doesn't matter how much you love your idea -- the cards are stacked against you.
Do your market research. There isn't much room for growth when you try to enter a dying industry. Looking at overall trends will help you determine if an idea provides long-term opportunities for growth and financial success.
6. It stands out from the crowd.
Cookie-cutter ideas rarely become a major success.
Money-making business opportunities have key points of differentiation that set them apart from other companies in their niche. This doesn't mean you have to completely reinvent the wheel with your product or service. Instead, you need to find what you do better than the competition.
While a truly unique product will certainly stand out, so too will a much lower price point or higher-quality manufacturing. A unique selling proposition should emphasize your brand personality while appealing to your ideal customer. If you can easily identify what makes you unique, your business is much more likely to be a success.
7. You're passionate about your idea.
While all of the previously mentioned factors are essential for your business idea to be a success, you won't get far if you don't truly love your idea.
"Every successful small-business owner and entrepreneur must have a passion that drives them forward -- a core belief that keeps them pressing on, even though others don't necessarily have the same vision," wrote Clate Mask, co-founder and CEO of Infusionsoft, in a piece for Entrepreneur. "The difference between those who push through difficult times and those who do not is passion."
Time to start earning is now.
There are never any guarantees when trying to start your own business.
But, that doesn't mean you have to go in completely blind. No matter where you're at in life, you can become a successful entrepreneur and achieve the financial freedom you desire. As you put in the time and effort to ensure you've found a quality opportunity, you'll be better equipped to achieve the right results.
Entrepreneur Leadership Network Contributor