8 Ways To Find Profitable Business Ideas

Updated: April 16, 2021

How do you come up with a good business idea? How do you know what type of business venture would be profitable today?

In this post, we’ll take a quick look at 8 idea-generation techniques that I often use whenever I’m on a “business idea hunt“.

I hope these eight strategies can help you discover that “big idea” – that profitable business, which will make millions for you someday.

1. Get a notebook and write down whatever comes to your mind.

pet-rock

I’m sure business ideas often pop into your head while you’re in the shower, or while driving or waiting in line. The next time that happens, write it down.

Don’t filter or censor them, no matter how silly that business idea sounds. Some of them are “rough coal” that can later reveal a diamond when polished.

For example, do you think it’s a good business idea to sell rocks as pets? Yup, take a piece of rock and sell them to people as something they can treat as pets. Silly right?

But here’s a fact… Gary Dahl did just that with “Pet Rocks” and he earned millions from it. The idea isn’t so silly now, right?

2. Look at businesses that failed.

closing-time

Businesses fail for different reasons – wrong location, weak marketing strategies, bad timing, mismanagement, and many others. Find a business that closed down, and see if you can correct their mistakes and make it profitable.

There was a coffee shop at the commercial complex in our subdivision, which eventually closed after a few months because of poor sales. A year later, a new coffee shop opened in the same location, which remains open until today. What happened?

The first coffee shop targeted young urban professionals – the “Starbucks crowd”. Meanwhile, the second one targeted students and designed the place to be a tambayan – a change in its target market was all it needed to become profitable.

3. Read lifestyle and business magazines, both online and offline.

magazines

Are you hoping to catch the first wave of a business trend? Chances are you will stumble upon it in lifestyle and business articles. No, you will not read about it there – the business idea will come to you while you’re reading.

When news about the rise of the local BPO industry was read by a friend several years back, he thought that English skills education would be a good business idea. So he put up a language school, which now serves as the primary training center for several call center companies.

Newspapers and magazines usually write about the current business landscape. You, as an entrepreneur, should be able to look beyond the horizon and visualize what will be out there. This is how you become a business pioneer.

4. Innovate on quality, service or price.

spaghetti

A product or service can either be the best, fastest, or the cheapest – but it’s almost impossible to be all three. So choose a product, and find an iteration that doesn’t exist yet.

Let’s say you want to put up a pasta business in your area. Currently, there’s a Jollibee nearby where people can buy affordable spaghetti (fast and cheap).

Meanwhile, there’s also an Italian restaurant around the corner that’s popular for their great-tasting pasta that’s served in minutes (good and fast).

Fortunately, no business offers the third type, good and cheap.

Now, how about doing a home-based pasta delivery business? It can be the best (because it’s your homemade recipe), and the cheapest (because you have no rental costs) in the area.

You’ll be surprised at how many people would be willing to wait just to have your delicious and affordable pasta. Of course, improving your delivery time would certainly help, but it’s not as important as being the best-tasting and most affordable spaghetti in your area.

5. Or just do it better, faster or cheaper.

burger-joint

Your neighbor beat you to the home-based pasta delivery business, so you decided to just put up a burger joint.

This time, see which of the three qualities can you use as a competitive edge. In short, ask yourself if you can eventually be the best, the fastest, or the cheapest.

Pick two qualities and see who your competition will be. If you decide to be the fastest and the cheapest, then you’re going after the burger market of the nearby Jollibee, which means you only need to match their product quality but improve on your convenience or price to be able to beat the fast-food giant.

Put up your burger joint adjacent to theirs, then put a sign that says “Your food is served in 30 seconds or you get 5% discount” – people will surely flock to your business, especially when they see long lines inside Jollibee.

6. Pick a spending market and solve one of their problems.

airbnb

Entrepreneurs are problem solvers. If you offer a good solution, then people will most likely spend to have it. The key here is to pick a demographic that has purchasing power and discover what their most painful problems are.

One of the highest costs when traveling is hotel accommodation. Not everyone can be a backpacker and stay in budget inns, especially if you’re going on vacation with your family. Meanwhile, households can always do with some extra income.

So why not help these households rent out their spare rooms (or houses) to travelers, at rates lower than hotel prices? And this was what AirBnB did, a website that started in 2008, which has grown to become a 10 billion-dollar company today.

7. Complement a successful business.

iphone-case

Smartphones and tablets are a billion-dollar industry. Do you know what else is a billion-dollar industry that won’t exist if these devices were not invented?

The tech accessories market! Yes, the makers of cellphone casings, screen protectors, charging adaptors, and many more.

But more than these little accessories, you’ll also see major companies adapting their products to accommodate this market. That’s why there are now music speakers with iPhone docks or bags with dedicated pockets for laptops and tablets.

Pick a product or service that’s making lots of money, and see what complementary business you can offer to its customers. It can be as simple as improving their experience, or solving a problem that arises from having that product.

8. Spend more time with thinkers.

thinkers

To rephrase a popular saying… small minds talk about people, average minds talk about events, but great minds talk about ideas.

So if you’d like to have the great mind of an entrepreneur, then stop gossiping about celebrities, or talking about the latest scandal, and spend more time brainstorming business ideas with other like-minded people.

No, you don’t have to change your set of friends (but you can if you want to). You can easily start by participating in an online forum, attending an event, or joining an organization to network and meet these thinkers, who are always ready to exchange thoughts and business ideas with you.

How about you? Any other tips on how to find profitable business ideas? Please share them in the comments section below.

And don’t forget to subscribe to Ready To Be Rich because we’ll be talking more about business in the coming weeks, and you don’t want to miss these articles.

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Photo credits: dolmanxaxlil, hofmeister, rodrigogalindez, andreasnilsson, thebookpolice, litgreen, sharynmorrow and steve

15 comments

  1. Amazing article… all good points. It is a matter of fact that it opened my mind and keep moving forward. I was in the verge of closing my idea in joining bazaar until this article refreshes it.

    Thank you very much!

  2. Great article! Thanks for sharing these information. I learned a lot, I mean, I was reminded what I was supposed to to. 🙂

  3. Great list, bro Fitz. It sure is refreshing and in good timing especially now that it’s summer, lots of problems will arise that need solving by the entrepreneur minds. 🙂

  4. Exciting times fitz! I am now venturing into my own business, while still employed, but targeting to be able to do my business full time within the year. Your articles has always helped me hone and develop that entrepreneur in me that I knew always existed.

    Keep up the good work and hope to meet you one day!

  5. thanks for this great article sir Fitz! 🙂

    I will spend more time & make friends with Entrepreneurs to acquire assortment of business ideas.. 🙂

  6. […] 4. 8 Ways to Find Profitable Business Ideas […]

  7. I agree to item 1. I always have a notebook with me for free writing so as not to forget the ideas or any thoughts. I usually came up with ideas in places where I commute or even walking down the street.

    Needless to say, it is in taking action with the ideas generated that matters most 🙂

  8. Hi Fitz. I find your blogs, enlightening, so rich of practical tips.. I have a question, to be able to beat the goliath in your choosen line of business, like for me a spa, do i need to lower the rates of my services? They have membership cards that offer 50% discount, i don’t have. I am puzzled how to come up with the idea to beat their marketing strategy. Thank you for your time.

  9. Hi Mae, you should focus on your unique selling proposition.

    If you’re a customer, why would they choose your spa over the others in your area? The reason should be strong enough for them to choose you over the advantages that other spas in your area.

    Once you figure that out, market your business using that as your main selling point to your target market.

    Remember, there’s quality, service and price. If you don’t want to compete in price, then see how you can offer better quality and service.

    Short to say, your target market will not be those who are looking for affordable massages, but perhaps those who are willing to pay more for a better experience.

    Jollibee Yum burgers are cheap, but there are those who would spend more for a Wagyu Burger instead.

  10. Hi Fitz, Thank you for this awesome article. Very simple and easy to understand. I agree with the number 4. I think it’s the key to be ahead and to slug it off with big time business.

  11. With the events of March, April and now May 2020 and so many business ventures closed or on very limited operating conditions, the thought stuck me that we need to add at least one or two “virus proof ” income streams. In our situation, I have a good SS monthly check from the US and I trade tax free, earning weekly income, inside my ROTH IRA account. My wonderful wife is very good at what she does. Even now, off peak season she still has some work flow, all of witch is on-line. Happily, just as her work began to slow, a gentleman who is doing deliveries to us because he can not work his regular job approached my wife and ask her if she would conciser writing his dissertation for a higher level degree that he is working on. My thinking is, all well and good but what about the future? Where I am older than my wife I am thinking one or two more income streams under my wife’s control that are virus covid-19 proof. We operate three local business here in the Philippines, all of witch are idle at this time. Our online gigs really did “bring home the bacon” during this crisis. Additional virus proof income would be a great addition. Now, where is my notebook?

  12. I will take the oppertunity to update my comment above, one year later. Like so many other families, we had our young troops at home during the 2020 school year because of the covid-19. Beautiful Bride saw a need for tutorial services but how to deliver the service when one or one classes are NOT a safe method? She started by developing a few re-usable education kits for our youngest to help him on things he struggled with. While working with him, she filmed the interaction.

    After editing, she posted the ” class session” to a special account and soon offered the classes on-line. A few “education kits” were given as gifts to friends who had done us a favor and some of those folks began to post their delight with the kits on FaceBook and other places. My wife now has orders for on-demand classes in from all over the Philippines, Australia and the US. Classes may be viewed in either Tagalog or English, depending on the subject. A customer simply orders the kits they want. When their package arrives they have the very same reusable materials seen in the video and a product-key that allows them access to the class video for a set period of time.

    An off-shoot of the new business: A few schools were so impressed with the kits my wife produces, they inquired if she would be willing to manufacture their school’s custom materials. While she would not have time to personally produce every single item (these are very large orders), I can envision her doing all the set-up and a trial run. After that, I can see our troops after school and likely several outer folks with all the part time kit assembly work they desire.

    How about that, a really old school method to develop a brand new business. Find a need, fill the need. In keeping with the same mission statement as our very first business, we want a portion of this new business to be part of the support for an orphanage we have tried to help since we first learned about the institution. They suffered badly during the covid-19 lockdown and even lost much of their roof from typhoon in 2020. Anything that brings the kids a little joy, some education or comfort is, we feel, worth effort to make it happen.

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