Starting with a Good Idea: Forty Concepts for a Small Business (Concepts 6-17)

Welcome to the Canada Business audio workshop. This 6 part series will help you with basics of starting and growing your business and will cover some of the most challenging aspects of business ownership.

In this introductory episode we will discuss 12 of the Forty Concepts for a small business.

6. Take Advantage of A Market Switch

When groups of consumers move from one type of product to another on a long-term basis, new business opportunities can result. Market switches create demands for new products and services.

Some Examples

The switch from traditional styles of children's bicycles to BMX bikes provided an opportunity for a bicycle shop to establish a BMX racing club and racing track. This racing involvement helped the shop to capture a large share of the BMX market.

A woman took advantage of the market switch from record albums to cassette tapes by packaging cassette recorder-head cleaning kit.

To take advantage of the market switch from large to small cars, a company designed and manufactured bicycle and ski racks designed for small cars.

An office machine repair service anticipated the market switch from typewriters to word processors and began to specialize in repairing word processing equipment.

How To Do It

Discover major changes in consumer buying habits by:

• reading marketing research reports and trade association research forecasts;
• observing current fads that could potentially turn into long-term changes;
• observing new products that are growing in popularity; and
• analysing changes in your own buying habits, especially when you stop purchasing an item that has become obsolete and begin to buy replacement items with entirely different characteristics.

Find products which are associated with a market switch by:

• analysing the advantage of new products to find those which are greatly superior and will likely replace more traditional items; and
• looking for new technologies or new products based on new concepts which are revolutionary for an industry.

Look for a major product or service that is needed to meet changing consumer demand, but has not yet been provided, and find a way to provide it.

When the major product in the market switch already exists, look for related services or products that can be used in association with the major product.

Ensure that there is a demand for the product/service you would like to provide.

Key Questions

• Can I think of any market switches that have recently taken place?
• Can I think of any market switches that may be occurring now?
• How can I take advantage of these changes in consumer buying habits?
• Can I address a current market switch by providing the major product or service?
• Can I provide secondary products or services related to a new major product?
• Have potential customers indicated a need for the product/service I have in mind?

7. Capitalize On A Growth Trend

Growth trends occur when increasing numbers of people indicate an interest in certain industries or activities. You can capitalize on such growth trends by offering a product or service related to the growing industry or activity.

Some Examples

There is a growth trend toward personal fitness and health. To capitalize on this trend, several firms are manufacturing physical fitness equipment, while others are offering various types of fitness classes. One company developed and now markets digital jogging meters which monitor a person's heart rate while running.

A woman who manufactured facial cream for women expanded her marketing strategy to include men, capitalizing on men's increasing interest in skin care.

Travel continues to be a growth industry. A local businesswoman took advantage of this by establishing a school for travel agents to help meet the demand for travel agency staff.

Increasing numbers of people are becoming interested in personal enrichment, growth and development. Many companies and individuals provide seminars, conferences, courses, books, consultation and retreats to meet the needs of this market.

How To Do It

Identify growth trends by:

• reading books and magazines on social and economic trends;
• talking to community trend-setters;
• asking librarians to name the current most popular books;
• observing growth trends in other areas or countries, especially the United States, particularly, California;
• observing the expansion of new retail specialty stores;
• attending speeches by society's innovative leaders, members of think tanks, or market analysts;
• and asking frequent travellers for their impressions of growing trends or factors in other places that may affect directions of local society.

Make a list of growth trends and select those which interest you most. Consider how your knowledge, experience and abilities could help you to meet the demands of new market trends.

Select specific growth trends to study in depth. Find out the causes, main issues, effects on society, and future possibilities.

Watch for opportunities to introduce products or services that fit into a trend.

Talk with potential customers to find out whether they would purchase the product or service you want to offer.

Key Questions

• What current growth trends can I identify and what products/services could I provide which would fit into a current/future growth trend?
• What activities or industries are likely to experience growth in the future?
• Who has indicated a need for the product or service I am considering?

8. Take Advantage Of New Fashions Or Fads

Fashions and fads are constantly changing or being "re-invented". You can take advantage of this by providing a product or service that caters to contemporary fashions or lifestyles. Such a product or service may be something which does not yet exist, or it may be an item which already exists but would benefit from greater promotion. Alternatively, it could be something which existed in a past era -- an idea ready to be recycled (e.g. bell bottoms).

Fashions offer longer-term business opportunities while fads are more intense and provide short-term opportunities. Because a fad experiences a rapid rise and fall in popularity, the opportunities presented require a more finely tuned response, first to provide goods, then to reduce inventories.

Some Examples

The thriving T-shirt industry addresses a broad fashion opportunity, and at the same time caters to fads through the designs and messages which appear on the shirts.

Many companies have targeted the "young urban professional" lifestyle, offering expensive foreign cars, high-quality homes and furniture, high-fashion clothing, and fine quality and trend-setting dining out experiences.

How To Do It

Focus on a basic subject area (e.g. toys, clothes, lifestyle, recreation or business).

To identify current fashions and fads:

• pay attention to magazine and television advertisements;
• read leading-edge trade publications relating to industries which interest you;
• read popular magazines that cater to fashionable and trend-setting people;
• talk to people you know to get their opinions on current and future fashions/fads;
• observe the fashions and fads on the street around you, in the U.S. and other parts of the world;
• attend trade and fashion shows;
• and develop contacts in the world's major fashion centres and regularly exchange information with them.

Transfer fashion ideas from other industries to your own areas of interest.

Imitate/promote fashions from popular movies, TV shows or celebrity lifestyles.

Develop fads for special events or occasions. These might include sports events, annual celebrations or holidays, large conferences or concerts.

Determine whether there is a market for the product or service you want to provide.

Key Questions

• Which industries are fashion sensitive?
• In what industry would I like to promote a fashion or fad?
• What items from past eras are ready to become popular again?
• What upcoming events could I use as the basis for a fad?
• Is there a market for the idea I have in mind?

9. Cover Market Gaps Or Shortages

Market gaps or shortages can occur when a needed product or service is not available or when customer demand is greater than the current available supply. Opportunities then exist for someone to step in and meet that demand.

Some Examples

Each summer, the demand for rental houseboats was greater than the supply of boats available in a community resort area. A company began building houseboats to sell and complemented its sales program by renting the unsold units to the local resorts during the peak season, enabling them to place a reduced pricing on these and later sell them as demos (resulting in more sales with no net loss of income).

A hotel employee noticed that there was a demand for a mattress repair service and none existed. She quickly signed contracts with several hotels and opened a mattress repair business.

A computer store employee who realized that there was no well-developed source of second-hand computers for clients on a budget opened a second-hand computer store.

How To Do It

To find situations in which needed products or services are not available or in short supply:

• ask distributors, agents and retailers what items they have difficulty obtaining;
• check delivery times and availability for orders of popular products and services;
• ask companies to identify services which they need but have difficulty obtaining; and listen to people when they complain about products they cannot find or mention services they wish were available.

Look for potential supply shortages caused by companies going out of business, changing their production focus or shutting down temporarily. You can do this by:

• watching out for such news in newspapers, particularly on the business pages;
• reading trade publications; and
• analysing lists of companies in receivership or bankruptcy.

Key Questions

• What market gaps am I aware of?
• What supply shortages am I aware of?
• How could I find other market gaps and shortages?
• What market gaps and shortages could I meet by providing needed products or services?
• Which potential customers have indicated that my perceived gap/shortage is genuine?

10. Imitate A Successful Product Or Idea

It may be possible to find a successful product, service or other business idea and imitate it.

Some Examples

A clothing manufacturer imitates high-fashion originals and offers them at a lower price.

Some companies produce imitations of popular board games.

A cookie shop is an imitation of a successful New York operation in almost all respects except the name.

How To Do It

Look for what is selling well and assess future market potential.

Identify the key factors responsible for the success of a product or service.

Find out how to make a product or which resembles an item you have identified as successful. Make sure you could do this in a cost-efficient way.

Before you commit yourself to the product or service of your choice, check carefully for potential conflicts or infringements relating to patents, copyrights or licences.

Talk with potential customers to find out if there is a demand for your planned product or service.

Key Questions

• What items or services are selling well? Is that market demand likely to continue?
• What popular products or services could I imitate?
• What potential customers would purchase my imitation?

11. Find A Good Product That Has Failed

A good product or service sometimes fails due to inadequate marketing, inefficient production methods or other reasons. In such cases, an opportunity still exists to make the product succeed, by identifying the causes of the previous failure and eliminating them.

Some Examples

An inventor failed to market a foot massager successfully. A woman with marketing knowledge and experience took over the product and helped it to succeed by using different marketing techniques.

A restaurant with a good concept failed because of poor management. A second try under new management was successful.

How To Do It

Ask bankers and accountants if they know of any good products or services that have failed due to poor management, marketing or other factors. Consider whether any of these could be improved for a second attempt.

Look for business failures and analyse the causes, to identify situations which you could try again after solving the original problems. Such failures can be located by watching for bankruptcy notices, talking with bankers, reading auction notices, reading trade newsletters, or talking to accountants who specialize in receivership.

Look for ideas that failed because they were ahead of their time, but might be successful if reintroduced.

Look for ideas that were successful originally but then became out of style at some point and failed. Some of these may be ideas whose time has come again. To rediscover old ideas, read old magazines and catalogues.

Advertise in newspapers and magazines for good ideas or products which people tried to market, but failed.

Identify your strengths and look for second chances in areas where your talents could be the deciding strategic factor for success.

Talk with potential customers to find out whether they would buy the product or service.

Key Questions

• What services or products have failed in the past?
• Could any of these be made successful now through new marketing methods, new management techniques, better financial support or different business strategies?
• What changes would be needed to successfully reintroduce the product or service I am considering? Could I carry out those changes?
• What potential customers have indicated the re-introduced product or service could succeed now?

12. Transfer A Concept From One Industry To Another

It is occasionally possible to take an idea or method from one industry and successfully transfer it to another.

Some Examples

A company which used a specific process to join electrical cables side by side applied the same technique to sailboat rigging.

Concepts of computerized inventory control were transferred to feed rationing in the cattle industry -- each cow was fitted with a device which permitted computers to automatically record and monitor daily food intake by controlling access to a feeding trough.

How To Do It

Take note of any good ideas you see, and think of other industries or settings where they could be applied.

Identify a problem in one industry or sector of the economy, and look for potential solutions in other industries which could be transferred.

Develop methods of applying ideas from one industry to the problems of another.

Assess the potential effects of using ideas or procedures from one situation to solve problems in another.

Talk with potential customers to find out whether they would buy the product or service that results from the transferred idea.

Key Questions

• What ideas or concepts do I know of that have been especially successful?
• In what industries have these been used?
• Could these ideas be applied to another industry? How?
• What good ideas could I adapt to another industry or activity?
• What good ideas from my own industry could be successfully adapted to other industries?
• What good ideas from other industries could be applied to my industry?
• Is there a market for the product or service that is created as a result of a transferred idea?

13. Invent A New Product Or Service

Inventing a product or service which meets an existing but unaddressed demand can create an excellent business opportunity.

Some Examples

An entrepreneur recognized the amount of work hospital personnel went through to prop patients up in their beds. He then invented the mechanical hospital bed.

A inventor realized that it can be difficult to organize closets efficiently. He invented a closet organizer, which is now sold in most building supply stores.

How To Do It

Concentrating on products and processes which are familiar to you, try to think of ideas for products, processes, or services which would enhance or improve existing situations ("What we need here is something that would....").

Observe products or services that could be made more effective to save time, effort or money.

Look for products and services that people are requesting, but which do not exist.

Examine present products and services from various perspectives to see if there are elements that could be added, subtracted changed or combined, to produce improvements.

Read newspaper columns and magazine sections devoted to consumer topics, including people's ideas about products and services which they would like to see offered or invented.

Use creative thinking to come up with an entirely new product or service.

Before proceeding with an invention, seek professional advice from a patents attorney. They are listed in the Yellow Pages of your telephone directory under Patent Attorneys and Agents - Registered. Each city has a patents receiving office which will accept and deliver your patent to the federal patents office.

Obtain free booklets on patents, copyrights, industrial designs and trademarks from the Canadian Intellectual Property Office of Industry Canada.

Key Questions

• What services or products are needed but don't exist?
• What consumer needs could be met by a new invention?
• What processes familiar to me could I improve by inventing a new procedure, product or service?
• What ideas do I have that I could develop into inventions?
• Is there a market for my invention?

14. Create A Market Demand

Sometimes you can create a market demand for a product or service by magnifying the popularity and image of a special person, group, enterprise, event or idea.

Some Examples

When Terry Fox, a native of B.C., started his Marathon of Hope, media coverage of the individual and event created a distinctive market demand. All across Canada, people donated to the Canadian Cancer Society and bought products in support of cancer research.

The City of Kelowna is offering one million dollars to whoever captures Ogopogo, the legendary creature of Lake Okanagan. Several Ogopogo products are sold in souvenir and gift shops .Ogopogo is used for promoting tourism in the region.

How To Do It

Look for an event, person, group, enterprise or idea that has the potential to be magnified through careful publicity or promotion. Consider whether the object to be magnified has the ability to capture people's imagination. Either focus on an existing object or create a situation yourself as the basis for magnification. Opportunities could be provided by: athletes, entertainers, politicians, business speakers, special features of an area such as mountains rivers, or industries, newsworthy events, performances of special feats by extraordinary people; or imaginary people and things.

Devise a promotional and publicity strategy for the object you have chosen, and think of off-shoot products and services you could market.

Investigate and get professional advice on contracts, patents and licences.

Contact everyone who would be involved in your planned promotion and make a proposal.

In the case of an event, begin to organize it.

For an object being promoted by someone else, explore related products and services you could provide as part of their promotional plan.

Key Questions

• Who or what could be magnified to become the basis of an income-generating enterprise?
• Could I provide the necessary publicity and promotion?
• Could I create a demand for the products or services I have in mind? How?
• What product or service could be sold in relation to a person, event or object that is already prominent and popular?

15. Serve Unique Client Groups

Unique client groups can be served by adapting or tailoring an existing product to meet the special needs of a particular group of potential customers. In some cases, meeting the needs of a unique client group may involve creating a new product especially for them. The needs of these groups could relate to characteristics (left-handed, overweight, disabled), lifestyles (occupation, leisure activities, income, age), owned assets (cars, boats, houses) or other factors.

Some Examples

An existing educational, recreational or other community service may be offered in a foreign language to meet the needs of a particular ethnic group.

A store was established to supply products for left-handed people.

A woman opened a laser-engraving service where boat-owners could bring glasses, dishes, cutlery and other objects and equipment to have them personalized.

How To Do It

To find a unique client group you would like to serve:

• analyse the Yellow Pages to find groups with specific interests, activities or occupations (truckers, sports groups, doctors, brides, seniors);
• check with your local Canada Business or library for directories of associations;
• analyse newspaper stories to identify special interest groups;
• observe unique sections of your city (ethnic areas, for example, or areas with large numbers of retired people or young children);
• identify groups which live in remote or unique regions; or
• analyse magazines produced for special interest groups.

Analyse the special needs of a group by studying the unique characteristics of the people and observing their activities.

Identify products and services which are not offered to unique groups, or are not well-tailored to their needs.

Find products, services, resources or assets that can be adapted to meet a group's special needs, or create new products for a group.

Talk to members of the client group to determine whether there is a market for the product or service you have in mind.

Key Questions

• Where can I find a group of people with special needs that are not being addressed by the marketplace?
• What unique group of people could I serve with specialized products or services?
• What product/service could I modify to better serve the group I want to serve?
• Have I talked with the people for whom I am considering providing a specialized product to determine whether there is a market for it?

16. Take Advantage Of Circumstances

Consumer goods and services can be provided as a response to situations and circumstances arising from events of the day. These might include social events, economic changes, business or industry developments, new laws, environmental events or other occurrences.

Some Examples

Deregulation of the telephone industry opened up opportunities for private enterprise to compete with large established telephone companies to sell and install phone systems for motels, hotels, office buildings and other commercial facilities.

In a city where many citizens were concerned about a health epidemic, a nurse became a distributor for an easy-to-use medical kit which allowed people to self-test themselves for the disease.

How To Do It

Develop the attitude that every experience and situation provides an opportunity for someone.

To recognize situations and circumstances which can provide a business opportunity:

• observe mass media news reported by newspapers, radio and television;
• analyse current news stories in magazines;
• keep informed about local events;
• look for unexpected or sudden changes in society, the economy, legislation, politics, the environment or business that leave many people in an unfamiliar situation.

Create a product or service that may:

• help people in a crisis (group therapy, useful supplies);
• help people to celebrate or remember the event (souvenirs, museums);
• provide an experience related to the event (trips, movies); or
• help people forget the event by diverting their attention (entertainment, activities).

Key Questions

• What current situation could provide a business opportunity?
• What products or services could be provided to address a market created by a current situation?
• Could I provide any of them?

17. Find People With Under-Used Skills

These people may be retired, unemployed, attending school or university, or employed in an occupation which does not use their best skills and aptitudes. They may be available for full-time or part-time work, and their skills can be used to enhance existing business activities or as the basis for new opportunities.

Some Examples

A businesswoman started a word processing and computer data entry service, distributing piecework to people who had computers in their homes.

Three unemployed tradesmen bought and renovated an older home for resale.

An unemployed accountant and teacher designed a computer-based training package to teach accounting to high school students. A retired marketing manager joined them to promote the product across North America.

How To Do It

To identify people who have valuable skills, talents or knowledge, but are not working regularly check with job placement agencies; ask training institutions for names of unemployed graduates; and check with student employment centres.

If you employ people to work at your existing business, find out whether any of them have specialized training or experience in a field not related to their current job. Consider how their skills can be used to exploit new opportunities.

Locate employees with specialized training who are on temporary leave from their jobs for such reasons as maternity leave, academic studies or personal renewal. They may be willing to join special project teams on a short-term or part-time basis.

Check lists of industry association members to find people who are not currently working with existing companies in the industry.

Attend meetings of unemployed people with specialized skills (i.e. engineering or teaching) to identify skills which could be used in new business opportunities.

Analyse the skills of people you know who are currently out of work, seeking new opportunities, permanently or temporarily handicapped or disabled, or limited by circumstances (such as the need to care for children) to part-time participation in the workforce and think of how to take advantage of their individual or group talents.

Investigate a project to determine whether it could be handled by the under-used talent that is available to you.

Conduct market research to find out if the service or product you are considering is saleable.

Key Questions

• Who do I know who has under-used skills, knowledge or talents?
• Where can I find people who have under-used skills?
• How could I work with them to develop a new business opportunity?
• What customers exist for the product or service I am considering?

This concludes our introductory episode of the Canada Business audio workshop series, for further information on anything discussed in this episode please contact the Canada Business service centre near you by calling 1-888-576-4444.

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