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5 Crucial Ingredients of the Perfect Business Idea

You are an entrepreneur with a burning passion to change the world. You know that you have the mindset and the tools necessary to be successful… You can “feel it”.

Just one problem – you need a business idea. And it needs to be a good one.

A couple days ago, I gave you an in-depth guide on the best way to pick the perfect name for your business or startup. But what about the step before name selection…

How do you pick the perfect business idea?

Many times it seems like the best business ideas come from a random flash of genius. You’re enjoying a nice, hot shower, singing your favorite Katy Perry song Pink Floyd solo and…

Business Idea Shower

*sings sweet Pink Floyd guitar solo*

BAM!

A brilliant business idea comes out of nowhere and forcefully latches itself onto your brain.

Isn’t that how Zuckerburg came up with Facebook? One of these days I’ll finish watching The Social Network.

Seriously though, how are you supposed to separate the good business ideas from the bad? Especially if this is your first startup or if you’re working alone, it’s easy to get caught up in the never-ending mental argument over the viability of your business idea.

Will it make money?

Will people respond to it?

How likely is it to flop?

Will it ever make a difference?

These are all questions that your nagging subconscious will force you to answer if left unchecked.

Fortunately, as you continue reading I’m going to give you a simple list of ingredients that every good business idea should have. These will allow you to objectively evaluate your business idea instead of relying on pure guess-work.

Ingredient 1 – Responsive Audience

The first and most important ingredient is a responsive audience.

In other words, your business idea should cater to a group of people that you can actually change. Your target audience should be one that will take action towards a specific goal.

Responsive Audience

Your future customer base…

For example, last week I read an article in Bloomberg about the massively successful startup, OkCupid. For those of you who don’t know, OkCupid is a matchmaking service with a focus on local dating, and they have an app that will automatically set you up on a blind date. The way that they use local data has made online dating easier and more authentic than ever before. Because of that, they have a user base of 3.8 million people, 1 million of which are active daily, and they’ve experienced a 33% growth every year since 2004.

Now, clearly this is a successful business. Many of you may be thinking that you could never come up with an idea as high-impact as OkCupid.

But you can!

While innovation, convenience and attention to detail is a big part of OkCupid’s success, the real catalyst behind their explosive growth is the responsive audience they cater to.

Just think about it – what audience is more responsive than single people who desperately want to go on a date? I can’t think of very many.

So, now you need to answer these questions for yourself:

Who will your business idea impact?

Does your audience have a real motivation to respond to your idea? Why or why not?

Fortunately, I’ve already written about how to validate an audience’s response to your business idea, so check out that guide if you need more help evaluating this ingredient.

Ingredient 2 – Unique Selling Point

If you know anything at all about marketing or copywriting, then you’ve already heard of this ingredient.

A unique selling point, or USP, is something that makes you different from every other competitor in the market. Your USP is what your audience can’t or won’t get from anyone but you and your business.

So, for example, let’s look at StartupBros. What do you think is our unique selling point?

Honestly, you could probably find several. For instance, both Kyle and I are successful Internet entrepreneurs. Our goal is to equip you with battlefield-tested tactics and ideas instead of abstract theory or regurgitated marketing-speak.

But there are other legitimately successful entrepreneurs with blogs… What makes us different?

Two things – we’re here to break the rules, and we want you to do it with us. StartupBros is about creating a community of like-minded entrepreneurs all on their way to online success. We’re not teaching a class of students, we’re more like guides in a mastermind group. That’s something you won’t find anywhere else.

I’m not going through this with you just to brag, but to demonstrate that without our USP we would be just another blog in the endless sea of business and marketing blogs.

Before you move on I have one quick disclaimer:

Being unique is important, but don’t be different for the sake of being different. What separates you from your competition must be something that is noticeably beneficial to your audience. Being different just to be different will make you look like an amateur.

Ingredient 3 – Realistic Business Plan with Clearly Defined Goals

This ingredient pretty much explains itself, but I’ll still say a couple things here.

First, as I said in Lee Schneider’s interview with me about college, persistence is one of the most important traits for a successful entrepreneur. The reason that we need this trait is because all entrepreneurs fail, and persistence is what lets us get back up.

Ask anyone with cold calling experience… You mark your progress by how many “no’s” you get, not by how many “yes’s”. Being an entrepreneur often requires a similar mindset.

So, the important thing here is that you can create a realistic business plan before you start. And it’s extremely important that you establish clear goals beforehand in order to quantify your progress.

I’m not saying you should write out a full-fledged business plan like most are taught in school – in fact I’d recommend against it. But you need to at least have an idea of how your business is going to run and how you are going to grow it.

For me, this means sitting down with a whiteboard or a piece of paper to “map things out” and tear the idea apart. I usually use Steve Blank’s Business Model Canvas and some good old-fashioned brainstorming.

Business Model Whiteboard

A StartupBros Business Model…in this case on the window of a bus

However, recognize in advance that your business plan and goals may evolve as your business idea plays itself out. Plan to adapt.

Don’t underestimate the importance of this ingredient. As I have said in previous posts, mapping out your goals and setting up milestones is perhaps the most crucial part of being successful in any venture.

Ingredient 4 – Scalability and Potential for Automation

I say “potential” here because launching an Internet business almost always requires lots of hands-on work throughout the initial stages.

Whether it’s brainstorming sessions with your team, writing articles for your blog, consulting with a developer, or building an audience on social platforms, you’re going to have to put in some serious time, energy and money to get things off the ground.

If you evaluate your business idea for automation potential from the beginning, you will make sure that on the other side of all that initial work is a happy-fun-land filled with treasures and trophies beyond imagination.

The simplest example here would be selling an info product. You will spend a lot of time and money creating an info product. Then, it will take even more time and money to promote that product.

But, when all is said and done you’ll have a steady stream of traffic paying you lots of money to let them click a button and download a file… After the initial launch it takes substantially less effort to keep the snowball rolling, and that’s all thanks to automation.

Be sure your business doesn’t depend on your time and money to grow in the long run, or else it’s growth will be very limited. You must have a plan to scale your business up in a cost and time effective manner.

Ingredient 5 – Personal Excitement

The last crucial ingredient for your business idea is completely subjective, because each one of you reading this has a different set of likes and dislikes.

It’s important that your business idea gets your heart pumping.

But, understand this – I’m not telling you only to pursue something if you’re passionate about it, at least not in the way that most people take that advice.

For example, Steve Jobs – the man who most recently pushed this idea of “follow your passion” – was not born an innovative tech-geek. He was known for walking around barefoot in college, and as a young man he spent several months on a psychedelic-filled spiritual journey through India. Not exactly the basement-bound nerd most of us might imagine.

What I’m saying here is this:

While Steve Jobs wasn’t born to be the king of Silicon Valley, he WAS born to be a mover and shaker. He was born an entrepreneur, and he was passionate about any idea he believed could change the world.

In a similar way, your business idea should excite you. It should be something that you can see throwing yourself into 100% and then some. If you’re not passionate about your idea, if you don’t see how you can change something, then you should probably go back to the drawing board.

On the other hand, if your business idea includes all five of these ingredients, then it’s time to throw ‘em in the pot and see what you can cook up. Chances are you’ll create something that a lot of people genuinely love, and that’s what this whole entrepreneur thing is really all about.

Now it’s your turn – What did you think about my 5 ingredients for a good business idea? Anything I should add to my business-cookbook? Let me know in the comments!

by Will Mitchell

Will Mitchell is a serial entrepreneur and Founder of StartupBros. You can learn more about him at the StartupBros About Page. If you have any questions or comments for him, just send an email or leave a comment!

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51 comments… add one

  1. Great tips. I’m surprised I am the first one to comment here. While reading this post, I began to get sidetracked because I started to think about what are the differences between creating a business vs creating a startup. Perhaps that is a topic for another blog post. There are similarities between the two, but they are also quite different.

    Reply
    1. Hey Raymond, I’m also surprised! Great idea for a blog post, definitely adding that to our list. You’re right, they’re similar, but the differences between them could mean life or death for entrepreneurs who try to work against them. Thanks for the tip!

      Reply
      1. Awesome – I can’t wait to see what you come up with. I might also add that to my list of things to blog about. I’m going to approach the topic differently than you because I am just getting myself started. Some things to consider: do all startups turn into a business? Or can a startup remain a startup over time? I wish I could actually start researching and writing about this now, but I got some other responsibilities to take care of! Have a great Monday.

        Reply
        1. Sorry Raymond, I’m just seeing this now. Those are great questions – did you write your post yet?

          Reply
          1. I have not. But if I were to, I think I’m now in a better position to answer those questions. How was Austin?

            Reply
            1. That’s good to hear, what have you been doing that put you in a better position? Austin was great, made some awesome connections and have fun doing it!

              Reply
          2. For some reason, I can’t reply to: “That’s good to hear, what have you been doing that put you in a better position? Austin was great, made some awesome connections and have fun doing it!” because the REPLY button/link is missing. So I will reply here.

            I’ve been reading quite a few books about startups. I’ve also been watching a lot of videos. I’ve also been going to startup Meetups in my area. I have a clearer idea between a startup and a business now, but I am in no way an expert.

            One thing I’ve been doing that’s been really helpful is pitching my idea to people whenever I can. The feedback is so valuable. I might think I have a good idea, but until I get enough feedback from actual people about how they see value in it, I’ll have to keep tweaking it and making little changes til it is just right.

            It’s kind of like cooking something new – “does this taste good?” No, well then I will have to add more pepper…

            Reply
            1. Hmm, that is a weird issue…

              Awesome to hear you’ve been absorbing so much of it – it’s never ending! Were actually thinking of doing a similar thing that I could use your feedback on.

              Were working on a new project were calling “StartupHotel” (for now). It will basically be a 2-5 day hotel meetup for aspiring entrepreneurs, designers, and developers. Our goal will be to help everybody leave with a functional business that stands a chance. Every night there will be a mini “pitch competition” where teams can get feedback from experts on where they need work. Rooms will be available for sleep when needed, food and drink, tables for each team in the conference room, yada yada…

              What do you think? Should we move forward?

              Thanks,
              Will

              Reply
          3. Hmm. It turns out replying to your first reply ordered the replies correctly.

            Reply
            1. Yea…weird issue, maybe just a bug with me working on plugins right now (hopefully)

              Reply
          4. It sounds like something I would want to go to. I have an idea, some mockups done in indigostuidio (which is a great and free prototyping tool), and a draft business model.

            But now I’m at a wall. I don’t know how to program, and I don’t know any programmers. And I don’t have several thousand to pay someone to outsource it.

            Someone recommended I go to a hackathon and get an MVP built over the weekend. If it builds traction, then it’s something that could be taken seriously….

            So yeah. What you are working on is definitely something that people would want to go to.

            Reply
            1. Awesome. Yea, that would be exactly the type of thing we’d want to do. Bring together good ideas, talents, and mentors. The goal would be to leave there with a sustainable business, or to know if there is one behind your idea.

              We’ll probably be in touch, I’ll need more feedback soon!

              Thanks man!

              Reply
          5. No problem. I’m happy to help.

            Reply
        2. It sounds like a great idea. Would you describe it as a more engaging hackathon?

          Reply
          1. Yes kind of, with a focus on mentorship and creation of an actual company. We just thought this up a few days ago, so that’s about as much as we have so far. Any ideas are welcome :)

            Reply
  2. All important necessities. It’s crucial to go into any type of business venture with a plan!

    Reply
    1. Absolutely! I’m a big believer in having a set goal before you get started. If you don’t have a set destination, you’ll end up nowhere!

      Reply
  3. I love this,I hope to meet with you soon…from Nigeria!

    Reply
    1. Hope to meet you soon too, as long as you’re not one of them Nigerian Princes :-P

      Reply
  4. Hi talking about automatization, how fond are you of amazon fulfillment do you think it is a tool worth using for automatization or are there other cheaper options in the market?

    Thnaks for spreading the knowledge my friend!

    Reply
    1. Hi Eduardo,

      Amazon’s fulfillment program is definitely a reliable option for automation. Just make sure you can make money before you send them anything! I’ve never worked with that program specifically, so I’m unsure of the exact details, but I know there are tons of businesses that depend on fulfillment by Amazon and do very well with it.

      Hope this helps,
      Will

      Reply
  5. You rock for answering thanks men!!!!

    Reply
    1. No prob ;)

      Reply
  6. Great post! Im slightly unsure of your stance on passion….do you think its really necessary? Were you passionate about airguns or did you simply see an opportunity?

    Reply
    1. You need to be outrageously driven, no matter what the business. To create any business, it’s going to take an amount of effort and work that most people will never understand. To do it, you need to be SO FUCKING MOTIVATED and CONSISTENT that most people will think you’re nuts.

      I’m passionate about music and politics, but I have an UNWAVERING DESIRE to achieving my business goals. Passion can help, but to become a successful entrepreneur takes so much more.

      Passion can also hurt; think about the countless number of people who you don’t hear about – the ones who ran their businesses into the ground. People chasing passion in the opposite direction of obvious business decisions.

      It’s more important to constantly work at improving yourself and your ability to build any company. At a certain point in my life, importing airsoft guns made sense for me. If something makes sense for you, you’ll naturally be drawn towards it. I had fun doing it, but I have fun building any company.

      Maybe I’m just passionate about building businesses and don’t realize it, but I don’t think that’s it. I’m passionate about constantly improving as an entrepreneur, and importing was a hugely valuable stepping stone.

      Reply
  7. Great info. …. thank you

    Reply
    1. No problem Tina, glad to help!

      Reply
  8. When I initially left a comment I appear to have clicked the
    -Notify me when new comments are added- checkbox and
    now every time a comment is added I recieve four emails with the exact
    same comment. There has to be a way you can remove me from that service?
    Thank you!

    Reply
    1. Sorry about that Mea! You should be all fixed up now :)

      Reply
  9. Great article Will,

    Thanks for the insight, looks like you put a TON of work into that article, pretty long article, nice one though.
    Time for me to escape the rat race.

    Cheers

    Reply
    1. Glad you liked it! Hope we can help you escape the rat race :)

      Reply
  10. Hi,
    Your posts are very informative.
    I wanted to know do we need some permission for selling products on ebay in usa. I have a visa with valid work permit. Can I straight away get products shipped from my home country and start selling them here. Or there are some regulations?

    Looking forward for your posts…

    Reply
    1. Glad you liked the posts Sona! Unfortunately, I’m not too well versed on international law, and definitely not enough to give legal advice! I would personally look at focusing on your domestic market, but if not – do some research! Sorry I couldn’t help more.

      Reply
  11. I do not even understand how I ended up right here,
    however I thought this publish was once great.
    I do not understand who you are however definitely you are going to a
    famous blogger for those who aren’t already. Cheers!

    Reply
    1. I’m not sure how you ended up here either, but I’m sure glad you did! :)

      Thanks a lot for the kind words, hope to hear from you more in the future! We’ll see if your prediction comes true :)

      Reply
  12. Hi, loved your post. Great information. Thank you.

    Reply
    1. No problem Maria, thanks for reading :)

      Reply
  13. That article really encourages me even more to pursue an individual entrepreneural career. Thank you so much! I even got two fresh book recommendations.
    Next step for me? Apply the experiences from your post about the import business :)
    I enjoyed reading!

    Reply
    1. Glad I could help out Nick – good luck to you! The real challenge is always staying motivated and keeping up the momentum, but I’m sure you can do it ;)

      Reply
  14. Really love this article Will…lots of sites talk about all of these, but they make it like WAY complicated. I like it nice and concise :-D :-D

    Reply
    1. Haha, happy to help Pieter. It’s all about the cliff notes ;)

      Reply
  15. Hello,

    I am in the process of sourcing for clothing sample maker. I already have a shopify store, working on our collection has been a challenge, to say the least. We have been sourcing for almost 2 years, and still no progress due to a lack of finding the right sample makers. We found a store on etsy, but they kind of keep going back and forth with their fabric resources and their progress on making the samples. Please please please if you can help put us in touch with someone right, or at least recommend someone please help! We’re are stuck and we want to get this thing going. Our plan was to produce the sample collection for Spring/Summer 2014, but we are already late as the fashion moves fast, and the collections for 2014 are already out…so we will have to postpone or come up with another collection for Winter 2014…. so PLEASE help us if you can!

    Thank you and I can’t tell you how glad we are we stumbled on your website.

    Reply
  16. I think these are great ideas but I think you left one out that I love to use for idea discovery and validation. Speaking with my ideal customers and market directly and using a method called Idea Extraction. A process that helps you discover your markets biggest pain points and issues. Then you create solutions based off those pains. Only moving forward with those ideas when they’re validated with pre-orders. I’m actually working on teaching a course on this subject.

    Reply
  17. Hi Will,

    I really like what you said about having a unique selling point. As there are soooo many blogs, websites, articles etc out there, you have to get noticed and stand apart from the crowd.

    Naomi

    Reply
    1. Definitely Naomi, and it’s only going to get worse! By 2016 we’re going to be drowning in content. Get started NOW, find an angle to differentiate yourself, and OWN that angle – while you still can!

      Reply
  18. Great content, Will!

    Do you think finding a good business idea is more related to luck or to a structured process?

    Cheers,
    Martin

    Reply
  19. Hi Will Thank you for this information ..I am especially interested in initial concepts
    ..You are successful because of your USP .Making your blog a masterclass .in itself sums it up .. Generally its impossible to get the value you give FREE …
    A name is very important ..if only it makes you focus
    . May i ad a suggestion ? Another important factor is marketing it
    (I have an experimental testmyidea ..and built a list of 12.000) but my final decision to use yobrain is a shot in the dark around the idea that it will be more effective marketing to reach my target audience (. I will know after launch ! )
    I wonder if you will comment on ..Lead generation ?

    Just ordered your book SMU….cant wait for your launch ..Sorry !

    Thank you for your great info Keep it coming Ian

    Reply
  20. Hi Will SORRY found what i was looking for your archive search ..

    Ian

    Reply
  21. Getting the right combination of things is very important.
    Like learning how to make a chain reaction in a nuclear bomb.
    But this is in a way to make business grow and get customers.
    You have got to get that ump that takes off and then it is passed on to
    the next person. More like an infection of spirit and drive.
    This has the nucleus of what you have and what they enjoy, can be most
    anything from song to maybe a very high quality game. It has that unique
    quality and that spurs it on like the “Play it Forward” thing.
    This become a chain reaction and that feeds on itself.
    One friend pass your website to all his friends and those
    pass it on to their friends the better that pass along chain works the
    better and more they like your website you have.
    This is nothing but a compounding progression driven by the number of
    those feeding the connection on to the many friends all over the web.
    Bottom line this is the essence of making the connections.
    The more you have what the customers want the better they will run back
    to your website to get more of it.
    Bottom line of business is to find what customers needs and wants are and fill those needs and wants.
    The more you can sing to the audience the more they hear what makes them want more.
    Getting in tune so they hear the music and respond to the beat.
    But beyond that they continue to spread the word thru action.
    Then this becomes a self promoting system grabbing more and more customers to fill their wants and need quickly.
    To much fluffy stuff and the customers stop hearing the music and get lost in
    the rhythm and you loose that momentum.
    Some of this is about their feelings and drive for a quality life and they are
    driven to share that dream and those ideas to their friends.
    There is sometimes passion and deep concern to achieve and to succeed.
    These are the things that make people different.
    Their sharing is just part of their wanting to help others when they find that
    golden ring and reach for it and telling others about the chance to live a
    higher quality of life and get more out of it.

    Henry David Thoreau
    “I went to the woods because I wished to live deliberately, to front only the essential facts of life, and see if I could not learn what it had to teach, and not, when I came to die, discover that I had not lived.”

    Reply
    1. Awesome, awesome bit on the importance of creating chain reactions. Reminds me of Gladwell’s “tipping point”.

      Reply
      1. Henry David Thoreau said…
        “The price of anything is the amount of life you exchange for it.”

        Reply

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