273: How to come up with a great business idea in 2022

273: How to come up with a great business idea in 2022
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I have an analytical approach to finding a service that has a real opportunity to launch a business, and it starts with making a list of ten services that you think you could provide. You can find a list of about 200 businesses that I think are great sweaty startups on the Businesses I Love page of my website, check these out if you need some help coming up with ideas, but don’t be afraid at all to stray away from this. 

The first step is to consider key criteria for a successful business:

  • Are the services becoming more popular?
    • Most services are–people are outsourcing more and more of their daily life. You don’t need to steal customers to have a successful lawn care business when more people are getting their lawn mowed every year!
    • Look at statistics and get the data you need to analyze total spending in your area and total population growth. Are people spending more on what you will offer each year?
  • What’s unique about your town and how can that translate to a business?
    • College towns can have services designed to students, vacation towns can be open to Airbnb management, etc.
  • How will future change impact your business?
    • Change is good, it brings on new opportunities. Ask yourself what the future holds and if there are any tailwinds coming that you can use to drive growth.
  • What’s unique about your skill set?
    • Being tech savvy and great at digital marketing translates well to almost every service business, as does selling. If you have a background in any service, like an old summer job painting houses, that’s a great place to start.
  • How much capital do you have?
    • How are you going to acquire equipment in a low-risk way? Can you rent what you need and service all of your customers in one or two days a week until you start taking on the job full-time?
    • How long can you live on your savings? What’s your current debt? How long can you survive before profitability? A lot of times you can start these companies while you have a job, and that’s usually the best option

Build your list with these questions in mind, but don’t let them limit you. Now make a list of ten specific services that you could bring to your market:

  • List five common services with a huge customer pool and low barrier to entry
    • Examples include lawn care, landscaping, house cleaning, pest control, etc.
    • These can be commoditized to compete on price, but if you can do this right that won’t be the case
    • These are usually the best places to start if you don’t have much money or experience
  • List three niche services where only a few companies service the population in your town, but the customer pool is still relatively large
    • Examples include home office design, mobile pet grooming, holiday light setup, etc.
    • Thousands of customers need the service, but not everybody can do it
    • You don’t need huge volume to make a living with these
  • List two high-skilled services that are in high demand and under-supplied
    • Examples include deck builders, HVAC technicians, and electricians
    • The barriers to entry are higher as you may need special equipment, certification, or skills, but you can charge more and they often present the best opportunity

Once you have your list, find three companies that dominate the market in your area for each idea and assess them on the following:

  • Speed: How busy are they? How long does it take to get a quote or get serviced? Are they booked out for weeks? How many customers do they have?
  • Accessibility / digital marketing: Do they have an online presence? Social media? Are they easy to find? How is their customer service? Can you schedule and pay online?
  • Pricing: Don’t compete on price, but know what your competition is charging. Oftentimes they’re not charging enough.

If you find something that you can offer better, faster, and cheaper than the competition, that’s your opportunity. Look for signs that the people running the company aren’t doing a good job of managing the business.

Build your list, refine your ideas, shrink the list, and jump in. There are no shortcuts. It can take weeks, months, years. It’s not fun to do this stuff. Winning is a lot of work. Do the things it takes to win. They’re not fun, but put your head down and do everything to make it happen.

Three Key Takeaways

  1. There are a ton of strong service business opportunities with varying levels of skill and expertise needed, you can absolutely find one that will succeed in your area.
  2. Take the time to look at your competitors and find a business where you can be better, faster, and maybe even cheaper than your competition, but don’t compete on price alone.
  3. This isn’t easy work, that’s why there’s so little competition. Focus on the hard work so you can find success and have fun down the road.

Find out more in this exciting episode!

Business I love list: https://sweatystartup.com/businesses-i-love/

Check the show notes here: https://sweatystartup.com/the-sweaty-startup/

Join our Real Estate community: https://sweatystartup.com/rec

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About Me

I started the Sweaty Startup in December of 2018 because I believe the Shark Tank and Tech Crunch culture is ruining the real spirit of low-risk entrepreneurship.