There is more to business than just a great idea, but coming up with that great business idea is a solid start. If you’re looking for a profitable business idea, here are six ways to hatch ideas and separate the good ones from the future flops.
There are three simple criteria for a new businesses:
- They have to be reasonably complex so they are not easily replicated,
- They need to be scalable beyond the limited number of hours in a day, and
- They need to have a steady cash flow.
Potential or aspiring entrepreneurs seem to face two huge problems when it comes to developing an idea:
1) We don’t think we have any good ideas, so there’s nothing we can possibly see succeeding. This is the guy who’s always telling you about a new project he wants to start, and then you find out two weeks later he’s already completely abandoned it.
2) We think we have too many good ideas, and we are completely confused as to which one we should run with long-term.
It’s relatively easy to sit and jot down ideas, but without diving deeper these ideas will never hold any weight. This is why you should ask yourself these four questions when idea mapping.
- What do your friends complain about that you find effortless?
- What do your friends say you’re great at?
- What do your friends say when they introduce you?
- What would you do if you had 3 hours free every week?
1. Ideas rarely materialize out of thin air.
Occasionally you may be struck with inspiration from seemingly nowhere, but a good business idea needs more substance to it than shiny appeal. Sometimes your idea imitates a successful, easy-to-copy business concept, but then you may find yourself facing heaps of competition in record time.
In the small business economy, there are certain businesses that tend to be more financially successful. If you are thinking about starting, investing in, or using a small business, our list of the most profitable small businesses, which is in no particular order, might help you hone in on something worth your while.
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One of the biggest challenges a new small business must face is obtaining the capital necessary to support their initial growth without any business history.
2. Failure can actually be good for your business.
You’re going to fail in business. Even if you start a business and it runs successfully overall, you will still have small setbacks. Failures will cause you to scratch your head and reevaluate what you’re doing and why. These are your best opportunities to learn and grow, so embrace them.
3. Iterate your ideas.
You can control your failures by planning for them. So, instead of fully implementing your great idea, you can test your idea in small sprints. That way you can learn what works, what doesn’t, and make changes accordingly.
4. Understand the impact of time.
A profitable business idea isn’t all that great if you don’t—or can’t—open the business quickly, and generate enough cash from customer demand to pay your bills. In truth, this is a common reason for failure among entrepreneurs. They come up with a concept for a business, but by the time the concept is turned into reality, it’s no longer a viable business idea or you’re out of cash.
5. It’s not what you know, but whom.
One of the most important traits any modern entrepreneur can have is excellent networking skills. Having “connections” in your industry—people who have experience and insight—is an incredible asset. If you’re starting your first business, chances are there will be things you don’t know about the industry—or even business itself
Many great business ideas go belly up because the startup wasn’t promoted. If you want to sell, people need to find you. As you flesh out your business idea, look at how you will promote it and who can help you.
Entrepreneurs come up with good, bad, and great ideas for new businesses. The challenge is figuring which are which. This list is one way to pan for gold in your bank of business ideas and find the nuggets most likely to be your next great idea.
Here are the 15 most profitable industries in 2020, ranked by net profit margin:
- Accounting, tax prep, bookkeeping, payroll services: 18.3%
- Legal services: 17.4%
- Lessors of real estate: 17.4%
- Outpatient care centers: 15.9%
- Offices of real estate agents and brokers: 14.8%
- Offices of other health practitioners: 14.2%
- Offices of dentists: 14.1%
- Specialized design services: 12.8%
- Automotive equipment rental and leasing: 12.5%
- Activities related to real estate: 12.3%
- Warehouse and storage: 11.6%
- Offices of physicians: 11.5%
- Nonmetallic mineral mining and quarrying: 11.2%
- Medical and diagnostic laboratories: 11.1%
- Other schools and instruction: 10.5%
And now for the least profitable industries:
- Oil and gas extraction: -7.6%
- Support activities for mining: 0.6%
- Beverage manufacturing: 0.8%
- Grocery and related product merchant wholesalers: 1.9%
- Lawn and garden equipment and supplies stores: 2.0%
- Miscellaneous durable goods merchant wholesalers: 2.3%
- Petroleum and petroleum products merchant wholesalers: 2.4%
- Grocery stores: 2.5%
- Automobile dealers: 3.2%
- Building material and supplies dealers: 3.2%
- Continuing care retirement communities and assisted living facilities for the elderly: 3.3%
- Other motor vehicle dealers: 3.3%
- Home furnishings stores: 3.3%
- Furniture stores: 3.4%
- Beer, wine, and liquor stores: 3.4%
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This post was written by fdfadmin