Identifying your PROFITABLE OPPORTUNITY
This is Part 1 in our 5-part New Business Plan.
The first step in developing a new business plan is to identify your PROFITABLE OPPORTUNITY. What is your 'big idea' for a product or service that actually has consumer demand? And notice the key word, 'PROFITABLE'. An OPPORTUNITY is no good if it can't make money!
Profitable opportunities can exist in many places.
Growing market – many opportunities exist because the market for a product or service is growing, and is not showing any signs of slowing down. Not only can you ride the wave, but niche opportunities for product variations start to appear as products proliferate.
Unfulfilled demand – the market may not be growing, but that doesn’t mean that all demand is being fulfilled. Many conservative companies are quite happy with their sales volume, creating long customer waitlists. Go ahead…fill that void and meet that demand!
New trends – new trends will always appear, and astute marketers can actually create them! Look for long term trends, not fads that won’t last. For example, the aging of the baby boom generation will create many long-term opportunities for health care services.
New distribution – existing products often find new opportunities simply by developing new distribution opportunities. Check out the Sephora vending machine! Online, in particular, has created incredible new selling opportunities.
New markets – perhaps a product that has been successful in one market can be brought to your market. Many crafty entrepreneurs develop products based on the success of similar products in far-away markets.
Superior location – yes, the market may be competitive, but you can grab market share simply by capitalizing on a superior location. This is especially true in new, developing communities.
Be the first – hey, this one is a no-brainer. The first to introduce an innovative new product or service will have a head start and will be the early market leader. Be careful of two things: being on the ‘bleeding edge’ (consumers weren’t ready for your product), and developing a great product with no barriers to entry.
Weak competition – listen, if an existing company is weak, they deserve to get their asses kicked. You can create a profitable opportunity simply by getting in their and doing it right.
Competitive difference – this is the most important one. The best companies develop a competitive difference, or advantage, to give consumers a real choice. Make it better, cheaper, longer lasting, more flavourful…whatever it is, you get the picture.
