A Step-by-Step Guide on How to Come up with Business Ideas

This is a self-help guide for coming up with innovative business ideas, sifting out the winners, and evaluating their market potential.
Marcel Proust once said, “The real voyage of discovery consists not in seeking new landscapes, but in seeing with new eyes.” And the same goes for innovation.
This four-step process will help you take off your blindfolds and uncover potentially brilliant business ideas — and maybe some funny ideas to share at a stand-up comedy gig if all else fails. 

Step 1: Adjust your mindset.

Adjust your mindset by letting go of self-inhibiting thoughts and exaggerated expectations.

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When embarking on new territory, your first instinct is to doubt yourself, your abilities, and your circumstances. You end up generating a set of limiting beliefs instead of creative ideas
Remind yourself that in the early stages, your focus is to discover ideas. Evaluating their viability comes later.
The second detrimental factor to generating business ideas is believing that all your ideas need to be 100% original. This is an unrealistic expectation.
Business ideas don’t need to be completely disruptive. Ideas can be a simple modification of an existing business/product or an addition of a new feature that serves a need that has been ignored by others.
A notable illustration of this concept is the creation of the Post-it Note. Arthur Fry and Spencer Silver noticed a need for small memo papers that you can stick to just about anything and turned their idea into over $2 million in sales in the first year alone.
To summarize, adjust your mindset by restraining unrealistic expectations, ignoring self-doubt, and avoiding premature evaluation of the ideas that will come to you. In other words, fire your inner critic.

Step 2: Allow your brain to make new connections through list-making.

Now that you have the right mindset, it is time to get some ideas flowing.
Mark Levy, the founder of Levy Innovation LLC, is a marketing strategist, positioning consultant, and the author of “Accidental Genius: Using Writing to Generate Your Best Ideas, Insight, and Content.
In his e-book, “List-Making as a Tool of Thought Leadership”, he outlines a list-making technique that he recommends to his clients, thought-leaders, and entrepreneurs.
Instead of making a single, random list of your thoughts or ideas, Levy suggests using this technique to broaden your view, look at things from new vantage points, and allow novel ideas to emerge without much effort.
Here is a summary of Levy’s list-making technique that will train your brain to generate a constant supply of innovative ideas. Some parts have been altered to make this technique more applicable to business ideas.

1. Brainstorm a master list.

Initially, decide where you are in the process:
A. You are generating random ideas. You are starting with a blank canvas with no specifics in mind.
B. You have an idea of what kind of business you would like to start, but you need to come up with an innovative idea, positioning strategy, new features, etc. 
Now, what is a master list? A master list is like a table of contents. Your objective is to make a list of expansive topics that wouldn’t normally fit together. You will later turn some of these topics into lists. But for now, fill your master list with all the titles you can think of. 
Let’s look at some examples. 
Your master list will look different based on where you are in the process. If you are an A, your list might look something like this:
The following questions are just examples, feel free to write your own.
  • What are my interests/hobbies/passions?
  • What am I good at?
  • Which business industries am I interested in?
  • Business ideas I have had in the past?
  • What problems can I solve?
  • As a consumer, what were some pain points that I have experienced while interacting with other businesses?
  • List of products/services that can make my life or the life of those around me easier.
  • List of businesses/tools/services I wished existed.
  • Why do I want to start a business?
  • How can my knowledge or expertise benefit other people?
  • Which brands/businesses inspire me? Why?
  • How can I make an existing business idea better?
If you are more of a B, get creative with your master list. You already have an idea of what you want to do so now it’s time to zoom out to see things from a fresh perspective. Your list will probably look completely different based on your topic, but here is an example to get your juices flowing:
  • What do I know about (this topic, business, or industry)?
  • What excites me about it?
  • What scares me?
  • What are my interests/hobbies/passions?
  • What are my skills/expertise?
  • What successes have I had with this (topic, business, or industry)?
  • What other businesses does this one remind me of?
  • What are the characteristics of the audience in this industry?
  • Examples of problems that need to be solved.
  • What do I have to offer to this (topic, business, or industry)?
  • What are some new concepts that I can introduce?
  • What are the pain points?
  • What are my assumptions about it?
  • How can I reframe or mix ideas from different industries into this industry?
  • What are some stories, metaphors, or analogies that come to mind about this (topic, business, or industry)?
  • What new features can I add?
  • What is my experience in this field?
  • How can I combine my experience from a different industry into this one?
  • What do I need to understand or learn more about?
  • Who is my competition? What are they doing well? What can I improve?
This step shouldn’t take more than a few minutes. Jot things down as fast as you can. Levy recommends listing about thirty titles before moving on to the next step.

2. Explore your topic through multiple lists.

Your master list is now filled with topics you can explore. Scan your master list and pick five, ten, or fifteen different titles. Skip the titles that feel boring and unnecessary. Pick the titles that seem valuable and intriguing.
Write each title you picked at the top of its own page. Using separate pages is important because you will shuffle the pages in later steps.
List as many items as you can under each title. Don’t get caught up with how short, long, organized, or messy your lists are. Allow your brain to spit out as many thoughts as you can about each title without letting that inner critic creep back in.

3. Make meaning from your fresh vantage point.

Man standing on the moon and looking at earth. He is seeing things with fresh eyes from his new vantage point.
Spread out your lists in front of you and shuffle through them. As you look from list to list and item to item, ask yourself about what you see. Give this step some time, attention, and curiosity.
Levy says, “Seeing differently happens almost instinctively because the unusual lists and active questioning have altered your vantage point. By standing in a new spot, what’s in front of you will be different. You’ll merely report on what you see.”
Your brain will start making connections between the lists, discover things you haven’t considered before, and formulate new ideas.
While studying your lists, write down all the thoughts that come to you. Your thoughts might be new ideas, observations, associations, patterns, opinions, hypotheses, etc. Jot every thought down.

4. Build an Inventory of new thoughts or ideas.

The last step of the process is to turn the fragmentary thoughts you wrote down in the previous step into thought chunks.
What is a thought chunk?
“It’s a piece of prose containing a complete thought. That prose piece may be a sentence or two or three long. It may even stretch into a couple of pages. Its length isn’t critical. What is important is this: If you read one of your thought chunks—even ten years from now— you’d understand what it meant instantly.” – Mark Levy
Writing out your thoughts into thought chunks is a necessary step because as you are writing, you are working out the kinks of the new connections and observations your brain just made.

You might get some light bulb moments for potential business ventures as you are going through this step. If not, don’t sweat it. This ideation technique has just primed your brain and generated a new set of valuable connections. Store your thought chunks in a safe place and give yourself, and your mind, a well-deserved break.

Step-by-step list making technique to use for coming up with business ideas. Brainstorm a master list of topics. Write each topic on its own sheet of paper, and start making your lists. Shuffle through the pages when you are done, note down observations and come up with business ideas.

Step 3: Take a mental break and let your ideas incubate.

Whether you have identified a few ideas during your list-making exercise, or you feel like it’s at the tip of your mind, taking a mental break is a must.
Have a Kit Kat, go for a walk, make a cup of coffee, or do any lightweight task that doesn’t involve mind-numbing activities. Let your brain connect more dots by distracting yourself with a task that is not mentally heavy.
Your inner critic might tell you this is the opposite of what you need to be doing, but letting your thoughts incubate is an essential part of the process.
Psychology Wiki defines incubation as “a process of unconscious recombination of thought elements that were stimulated through conscious work at one point in time, resulting in novel ideas at some later point in time.”
Ideas will start presenting themselves to you out of the blue. Jot down your light bulb moments as they come to you. This can happen over the course of a few days.
For any ideas you have already identified, jot down any tweaks to improve them.

Remember, you can always repeat the List-Making Ideation technique with a narrower approach to refine your ideas. Make your master list with a single idea or business in mind. This will allow you to broaden your perspective while digging deeper to refine your initial inspiration.

Step 4: Sift out the winners and evaluate their market potential.

Identify Your Best Ideas

You now have an inventory of new ideas to pursue. Pick one or two that you are most excited about. To assess your ideas, ask yourself:
  • Does this idea have merit?
  • Does my idea fill an unmet need in the marketplace?
  • Does it deliver an existing product/service in a new form, produce a product/service better or cheaper than competitors, or in other ways in which value can be added?
  • Will people pay for it? If not, What can I add to make it viable?
  • If this idea already exists, what are my differentiators? How can I compete?
As you go through the assessment questions, don’t panic or cross out ideas from your list. You have to remember that many ideas need some fine-tuning before they hit the market.
Likewise, you shouldn’t jump straight to production. You have to refine your ideas first to avoid unnecessary costs, reduce uncertainty, and lower your risks.

Conduct Preliminary Research

Ideas are formulated in your head, but it is critical to develop and fine-tune your ideas for the real world. Similarly, an execution plan needs to be tailored to the current market conditions.
The number one reason businesses fail is there is no market need (CBInsights, 2019) or due to a lack of understanding of the market, target audience, competition, etc.
The world is massive and diverse; your customer base will likely exist outside of your immediate circle of family and friends. The easiest way to conduct preliminary research is to burst your bubble, talk about your ideas publicly, and gather insightful feedback from unbiased individuals.
Ideastag is an online discussion tool where you can post your idea, parts of your idea, or open questions related to it. It is the easiest way to gather qualitative feedback to fine-tune, de-risk, and evolve your initial ideas. Sign up for a free account and start discussing your ideas.
Examples of what to gauge by posting about your idea:
  • Test the market potential, demand, and readiness for your idea. Will people pay for it? Is there a customer base for your idea? Do people need it now?
  • Find out specific pain points that your idea solves. Talking to people might bring new issues to the forefront that you might have otherwise ignored.
  • Ask specific questions about others’ experiences with possible competitors. If you have already identified a competitor, talking to their customer base will help you establish better positioning for your new business.
  • Validate a business concept. Test out your own business concept or ask questions that help you transform an idea into a profitable business.
  • Evaluate details such as features, product or service details, strategies, or implementation options. Draft a post with the details you want to test and gather feedback to tweak and bullet-proof your business idea before getting to work.
Two people discussing a new business idea.
Taking a step back and listening to the thoughts and comments of unbiased individuals can morph your ideas and plans into a successful business.
This is called idea validation. It increases your probability of success and can help guide your efforts moving forward.
As you take in the feedback from your preliminary research, allow your idea to mature. Don’t be scared to make necessary changes. The more you do before you launch, the less drastic shifts you will have to make afterwards.
This concludes our guide to coming up with successful, innovative business ideas. Happy thinkin’ and testing.

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