What is a good business idea?

This question has been answered countless times by entrepreneurs and experts from around the world. There is no ending list of what constitutes a good business idea, but there sure are some qualities one should look for. The main goal is for the idea to provide a solution to a problem that is very near to the people. Most of the people coming up with business plans; create a product or service that solves a problem that isn't even there.

Furthermore, it should be something that is in tune with your personal values and mission in life. You don't want to create a product or offer a service that you know you can't be passionate about.

In summary, the basic criteria that constitute good business ideas are:

  • Finding problems that need a solution.
  • Making sure the idea aligns with your personal values and mission in life.

If your idea fulfills these two criteria, then you are on the right path towards finding a good business idea.

Where does one find problems to be solved?

First of all, look around you. Take notice of some things you have lying around and think of them as solutions to certain needs or problems you have. Take a calculator, for example, it fills the need of finding quick answers to different types of math problems, without having to do them by head. Or let's go to the streets; take notice of the stores you see. For example, the barber shop fills your need of getting a regular hair cut, or to give you a nice modern look, in order to feel clean and good about yourself. If you start thinking in terms of problems that need solutions, you can easily come up with business ideas that might be worth considering.

How do I develop a good business idea?

There are different ways one can work on finding a good business idea. One such method is "PIS$" and it stands for:

  • P – Problem
  • I – Idea
  • S – Solution
  • $ - Cash/Monetize

The process is simple. Let's take the calculator example again:

  1. P - Define the problem. In this case we have the need of solving quick math problems without using too much of our own brain power.
  2. I – Brainstorm how one might be able to tackle your defined problem, without getting too concrete yet. In our case, one could think of something that automates the process of math-solving, where one can type in a formula, such as "5+3", and it would return a value of "8".
  3. S – Now one can think of more concrete measures of putting the idea into practice. How can one automate the process of math-solving? Since for simple calculations, one doesn't need much processing power, a simple device can be used to accomplish the objective à a basic calculator is born.
  4. $ - Think how one can monetize the idea. Do you license the intellectual property behind the calculator? Do you sell the device itself? This is up to each individual to decide.

It is noteworthy that the process doesn't have to end after one round. So if one reaches the third step and finds that the solution one has found brings a new problem to the table, then one can absolutely return to the first step and continue to work on the newly found challenge to create an even more complete business idea.

Having a good business idea is just the beginning of the process. It is very important to evaluate the market to see how your competition is doing, and to evaluate oneself to see how you stack up against your rivals. One amazing resource worth recommending that will help you take your ideas to the next level is The Million-Dollar Idea in Everyone: Easy New Ways to Make Money from Your Interests, Insights, and Inventions.