introduction
The year 2008 is remembered for many reasons, but one reason that will go down in history will be the global economic collapse. While many companies were struggling to stay afloat during this difficult time, several companies laid the groundwork for a billion-dollar business and continue to operate successfully today. Airbnb, for example, started during a recession, and as a result, has been able to generate billions of dollars in revenue to date. The question then arises: If there are still opportunities available to entrepreneurs during economic downturns, then how do entrepreneurs consistently identify new business opportunities, no matter what market they’re in?
The idea of being able to identify new business opportunities does not come from luck or perfect timing. It comes from learning how to identify opportunities using a structured process that includes observing, analyzing, and thinking strategically about the business world. Today, with the rapid pace at which our world is changing due to tech, globalisation and changes to consumer behaviour, the ability to spot an opportunity has become a huge competitive advantage.
To provide assistance to those wanting to find new business opportunities, this article discusses three proven methods for discovering them: identifying unmet needs of customers; researching the trends and statistics of the marketplace; and creatively utilising strengths and/or weaknesses.
Identifying Unmet Needs of Customer
Identifying How and Why Customer Pain Points Present Business Opportunities
At the core of every successful business is a simple concept: it provides a solution to a customer’s problem better than what is currently available. If a customer’s unmet or poorly-addressed needs are consistently found in the marketplace, that gap is where the majority of new business opportunities can be developed.
Example from the real world
The founders of Netflix realized that the way traditional video rental companies operated was ineffective; the late fees and limited selections were a pain point for their customers. By adopting a subscription-based model and eliminating both of these issues, Netflix succeeded in revolutionizing home entertainment. The opportunity to create Netflix existed because of more than just technological advancements; the founders also took the time to understand where the frustration lay for their customers.
Differentiation of Traditional Market Research from Behavioral Insights
Traditional market research often looks at demographic information and market size to determine what customers want, while this method utilizes behavior to gain insight into what customers experience. Rather than asking customers what they would like, which may not always be articulately answered, this method observes how customers are struggling and identifies opportunities that have been overlooked by competitors.
Looking at Market Trends and Data
How Trends can forecast business opportunities
The market is constantly changing and evolving throughout history simultaneous to; advances in technology, changes to regulations/policies, significant changes in culture, and the state of the economy. Hence, by utilizing a systematic approach to tracking the trends in which you are doing business; you will be able to spot an opportunity within your business model ahead of anyone else.
The types of trends to look for to determine economic opportunity are:
- Technological (artificial intelligence, automation, digital platforms)
- Social (telecommuting to work, sustainability, wellness)
- Economic (cost pressures, new ways of pricing)
- Regulatory (changes in policy bringing new demand)
The validation of Opportunities through data
To take advantage of trends, you must support your awareness of those trends by way of data collection. The information available through public reports, market analysis, and industry research allows you to determine whether an opportunity is a short-lived phenomenon or some potential opportunity.
Using What You Know and Finding What You’re Missing
Transform Your Existing Skills and Expertise into New Business Opportunities
Sometimes it isn’t necessary to create something completely different in order to succeed as an entrepreneur. More often than not the best opportunities for success in business come from the intersection of your strength(s) and the inefficiencies existing in the market place.
Examples of leverageable strengths could be :
- Your experience and/or knowledge (expertise) of a particular industry
- Your relationships with others within that industry (networks)
- Your proprietary information or capabilities
- The trust your brand has earned from customers or the relationships/loyalties established by your customers.
By leveraging or utilizing these strengths against the problems that haven’t been solved or that have not been addressed, you can step into established markets with an advantage.
Evaluating the Inefficiencies in the Market
Market Inefficiencies are typically created when:
- Processes become far too complicated and expensive (in terms of how things get done).
- Fragmented services or inconsistent deliverables exist in the market place.
- Customers, owing to their limited alternatives, have accepted subpar customer service levels.
- Technology has not yet been effectively applied.
Inefficiencies can also be found in areas like:
- Having manual processes for industry segments that traditionally rely on being offline.
- Having high-priced intermediaries (middlemen) and little value added through their services.
- Old (outdated) pricing structures, methods of pricing and/or distributing a product.
Real-World Examples
By using technology and digitalization to create new business models that solve traditional banking issues, FinTechs have addressed many of the inefficiencies existing within banks today such as slower payments and limited access to banking service(s).
Differences Between Innovation-Based Models and Our Model
Unlike the innovation-based model, which primarily focuses on the invention of new products/services, Our Business Model focuses on the optimization and repositioning of (your) existing products/services.
Final Thoughts
In conclusion, Finding Business Opportunities is More Than Luck. Business Opportunity identification is a systematic approach. This article identified three distinct methods as the most effective way for finding business opportunity; Unmet Customer Needs Analysis, Market Trends/Data Analysis, and Leverage Existing Business Strengths to Improve Market Inefficiencies.
The combination of all three methods will enable Entrepreneurs and Companies to discover business opportunities regardless of the current Market Conditions. When an Entrepreneur or Company is entering a Mature Industry or Navigating an Emerging Industry; Listening to Customers, Staying Current on Industry Trends, and Strategically Utilizing their Strengths will always remain constant principles.
Future-focused Companies that embrace Continuous Learning, Utilize Data to Drive Decisions, and Establish a Customer-Centric Culture will be the Companies best positioned to discover new opportunities in Business. The marketplace continues to change, however, those Companies/Eentrepreneurs who prepare to recognise the opportunities by being savvy will always find them.
Action Points
To identify your next successful Business Opportunity, start by researching a Market you know well (Example: Local Restaurant Market). Identify one of the TOP THREE (Frequent Customer Frustrations, Current Industry Trends OR Poorly Managed Businesses) that you can Improve. The next BIG Business Opportunity could be waiting just in front of you!