How To Spot A Good Business Opportunity

Updated: November 2, 2021

The problem for most people who wants to become an entrepreneur is coming up with that winning business idea. And more often than not, when looking for such opportunities – “business fads” are all we see.

Pearl shakes, internet cafe, squid balls, laundry shop – these are just a few of the trending businesses that we’ve seen come and go over the years.

These businesses usually go “out of fashion” within a couple of years, and only those who have truly established themselves in their niche will survive.

After that, those rookie entrepreneurs who tried to catch the wave will close shop, be betrayed by their own market, defeated by competition, and left wondering what the “next big thing” would be.

So what’s the best way to come up with a good business idea? How do you exactly spot a profitable business opportunity before anybody else?

Big Business Ideas 101

Know yourself
It’s a fact that business opportunities are everywhere, but it’s also a fact that not all of them are meant for you. Never jump on a business opportunity just because it’s there.

Before you even consider a business idea, ask yourself first:

  • What am I good at?
  • What do I love to do?
  • What resources are available for me?

It’s advice as old as time – always follow your passion.

But beyond that, evaluate yourself and see how much time can you commit to the business, how much start-up capital can you raise, and who among your network can help you in this venture.

Raise your awareness
Once you’ve determined the niche you’d want to go into. It’s time to open your eyes and look for opportunities that are in line with your skills and passion.

If you’re good at cooking, then seek out business opportunities in the food industry. If you love sports, then your big business idea might be in the health and fitness industry.

Again, focus on what you’re good at, and what interests you most. Forget and sort out business ideas that are not compatible with your lifestyle and personality.

Solve a problem
Now that you’re looking in the right direction, it’s time to find that big business opportunity. And when it comes to this stage, the first question you should ask yourself is, “What problem can I solve?

Provide services, fix problems, remove obstacles, create new products, innovate, and improve on existing ones – these are just some of the things you can do as an entrepreneur.

For example, what business can a stay-at-home mom build? What problem can her knowledge, lifestyle, skills, personality, and resources solve?

Well, she can produce and sell healthy baby food to other moms. She can innovate and create a line of educational products for children. She can put up a store for her home-baked goodies.

There are countless possibilities – and all you need is creativity, focus, and commitment. Take it from Dorothy Gerber, who sold ready-to-eat healthy baby food to moms who didn’t have time to make their own.

Or from Julie Aigner-Clark, who created Baby Einstein and innovated on children’s home education. And from Debbi Fields, who gave us Mrs. Fields and the comforting joy of her cookies.

All of them are stay-at-home moms who built a business empire inspired by their love for their children.

Follow through
A business idea is worthless unless it’s put into action. A lot of us can actually spot good business opportunities every day, but choose to remain passive and simply daydream of the possibilities.

Challenge yourself, get out of your comfort zone, and follow through on your entrepreneurial dreams. You’ve already got that winning business idea, it’s now time to make it real.

Need some more help? Follow my step by step guide to starting a business here.

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  1. This should be read by most Filipinos.

    if not the “fad”, the usual is they go to the “default businesses” which are either sari sari store or buying vehicles for public transport.

  2. I don’t really agree 100%. Laundry biz is not a fad. People will launder as long as they wear clothes. It’s not always a business policy to “only do where you have passion”. As you can see, most of the tycoons have diversified businesses and it’s hard to equate passion to their diversified ventures. I think the most important is how you manage every business – that should be the passion. Based on my experience, good business opportunity has the following criteria: 1. it should be expandable which means you can put as many branches as you wish. If you only do where your passion is, chance is you can’t expand it if you can’t make a system and that’s part of good management, 2. it has less fixed cost and if it doesn’t, it should be easy to increase production, 3. it has less inventory, 4. it’s easy to monitor so that you don’t have to be there to keep it running, 5. the products or services are not meant to be used or availed only once, 6. You have options to choose your suppliers. 7. of course, return on investment must not be more than 3 years.

    If you choose to do where your passion is, make a system for it to be profitable, measurable, expandable, cannot be duplicated by others with ease, and franchise it! – that’s the best business opportunity.

  3. You are so right with the ongoing business fad right now, the milk tea shops. Few of my friends are actually in this business right now. I hope they will be one of the businesses that will survive.

    Follow your passion and do the things you always love will always be the best advice for first time entrepreneurs. Just don’t be discourage by temporary setbacks and failures.

  4. @Rogie
    Some business coaches call this attitude the “sari-sari store mentality” which refers to the habit of Pinoys of copying fad businesses.

    Thanks for giving your insights. Indeed, to have full potential for growth, a business should be sustainable, scalable and innovative.

    Sustainable doesn’t just mean profitable, but also systematic and manageable. It should be scalable, which means the system can easily be duplicated for expansion and possibly, franchising. And innovative, so it could stay ahead of the competition.

    For first-time entrepreneurs – that may be a lot to process. And developing a business to become this “well-oiled machine” takes time and effort – and this is where passion really plays an important role because the willingness to succeed at what you love will take you through the challenges along the way.

    For tycoons – passion… I believe, has gone beyond the usual “human interest” and has shifted to the love of “building a business”, “providing jobs” and “challenging oneself to excel in unfamiliar territory” – which explains why most of them have diversified ventures.

    Off the top of my head, you can put up an investment company, or a learning institution where people can study about financial products. You can also do mentoring programs, and stock trading membership clubs (just like Bo Sanchez).

    Tell your friends to find ways how they will stand out from the crowd. They can’t just be an “ordinary” milk tea place. Develop a niche, continuously market their brand, and innovate.

  5. What if the kind of business you are passionate about and would like to venture into will not really be lucrative? Do you forego your passion then? Pursue something else more lucrative but isn’t really your number one love? 🙂

  6. Hi fritz. I simply want to start a business of somebody elses business that just stopped bec of health reasons. The family doesnt want to continue and no longer interested. I am seeing the market in there. I would be able to create jobs and help people i know.The problem is, i dont know the secret recipe and getting it would mean money. If its not patented product, how would I be able to negotiate?Could you please help how to pitch the deal? Thanks a lot

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