How to come up with business ideas in 2024

Are you keen to spread your wings and start your own business? You’ll be in very good company. According to official statistics, there are more than 5.5 million businesses in the UK, in sectors as varied as information and communication, online support services, and retail.

The overwhelming majority of these are small. In fact, over 74% of UK businesses are entirely operated by only one person. That’s certainly an inspiring statistic, highlighting that you don’t need anyone by your side to create a thriving business of your own.

What you do need, however, is inspiration. Unless you’re lucky enough to have a “Eureka” moment, with a fantastic concept suddenly coming to you out of the blue, then you’ll have to invest a bit of time into coming up with a business idea that’s right for you.

The “right for you” part is important. After all, there’s certainly no shortage of small business ideas to explore, and as a budding entrepreneur your task will be to filter out the ones that don’t fit with your personality, expertise and circumstances.

That’s why we’ve put together this guide explaining exactly how to think of a business idea that is the right fit. We’ll discuss the factors to keep in mind, as well as the practical steps to get your business off the ground.

How to come up with business ideas

Coming up with a business idea from scratch can seem like a tough task, especially if you just sit down in front of a notepad or laptop and try to force inspiration to come.

Fortunately, the task can be made much less daunting if you take a more methodical, two-step approach. Let’s get into it.

Step one: identify your business category

Before you even start to brainstorm specific business ideas, you can work out which business category you’d like to go down by asking these key questions.

Can I monetise my existing skills?

It’s never been easier to take on career-boosting skills like coding or cookery through part-time and online courses. That being said, making your current skills and experience the foundation of your business will allow you to get your idea off the ground more quickly and with less financial outlay.

So, look to your own areas of expertise and think about what kinds of business ideas might be a natural fit. You might want to create a business that exists within the exact sector you’re already familiar with – just like the experienced estate agents who came up with the idea of entirely-online estate agency Purplebricks.

Or, you might pivot to a new industry while still utilising your skillset. Think of Jeff Bezos – he had no experience as a bookseller when he set up Amazon as an online bookstore, but, crucially, he was an experienced techie with lots of experience in online customer service.

What pain points can I address?

Pain points are persistent problems, or unmet needs, currently experienced by consumers. Businesses succeed by fulfilling these needs and fixing these problems.

Some pain points are so significant that offering a neat solution can fundamentally change a particular industry. 

For example, the MyFitnessPal app achieved global success by making it much easier for dieters to track exactly how many calories they consume each day. The pain point here was the inconvenience and hassle of having to write down lists of foods and manually calculate calorie counts.

Of course, you don’t have to be quite that radically innovative in your thinking. You can find business inspiration in smaller, more subtle pain points which you can address. There are a number of ways to identify these:

• Think about aspects of your daily life, and what kinds of challenges tend to frustrate you personally, no matter how trivial or small

• Ask friends and family if there are any problems they’ve encountered with products and services they use day-to-day

• Scrutinise social media sites like Twitter, Facebook and NextDoor, paying attention to common complaints and criticisms people post about

Make notes of these, no matter how diverse and far-ranging they may be. Which ones get your mental cogs turning? Could you potentially apply your pre-existing skills to create a business that can solve one or more of these issues?

What existing products or services can I improve?

Originality is overrated, and you don’t have to dramatically disrupt a business sector in order to stand out and succeed. Indeed, many businesses flourish simply by providing a slightly better product or service than their competitors.

There are numerous ways you can potentially add extra value to existing products and services. Let’s run through some of them.

Cost

Many businesses thrive by providing a cheaper alternative to products and services already available. If, say, you decide on how to make money from home. You’ll have lower overheads compared to larger businesses which have to pay for premises and staff, and that alone may allow you to undercut their prices and cultivate customers.

Alternatively, you might decide to offer budget versions of pre-existing products. For example, if you’re creating arts and crafts items, you might use lower-cost materials to position yourself as the “cheap and cheerful” choice.

Convenience

Another way you can add value to an existing product is by providing your own version in a way that’s more convenient for customers. This can be a major selling point in our hectic times, when so many people are increasingly time-poor.

Offering subscription-based deliveries of popular products can be an excellent way to get customers’ attention. Take the example of Harry’s, the company which sells shaving sets online, automatically dispatching new blades and skin care products to subscribers every few months. Is there a market you could enter with a similar delivery-based business model?

Branding and customer experience

It’s possible to provide a near-identical service or product type to what’s already available, yet distinguish yourself by offering a better customer experience, or more eye-catching branding. Take the example of domestic cleaning. There are bound to be many cleaners available in a given area, with many advertising their services on online marketplaces.

Imagine creating your own company website with a striking aesthetic – perhaps something playfully retro, with bold polka dot colours and cartoonish images of dusters, marigold gloves and vacuum cleaners. 

This will already make you come across as a more established and passionate business compared to those who simply post ads online.

Now, imagine taking it a step further by giving cleaning tips in TikTok videos and on Instagram. This will enhance the customer experience still further, and potentially bring in more customers who will trust and warm to your brand. And all without you having to offer a particularly innovative service.

What trends can I capitalise on?

Remember when fidget spinners were a thing? All of a sudden, these peculiar little toys were everywhere, for reasons few people could really fathom. The craze didn’t last, but brought hefty revenues for those savvy enough to capitalise on their soaring popularity.

This is an extreme example of a “flash in the pan” fad. But it illustrates how important it can be for budding entrepreneurs to keep up with trends and fashions by reading news articles and following trending topics on social media. 

After all, many such trends won’t be so fleeting, and actually signal the emergence of new, permanent business opportunities you can explore.

A prime example of this is the rise and rise of the SaaS, or software-as-a-service, sector. SaaS businesses provide software to clients (often other businesses) on a subscription basis. 

They’re convenient, easy to integrate and easy to upgrade, which is why usage has really taken off. Some of these companies, like Slack and Monday.com, are worth billions. But there are lots of smaller, highly specialised SaaS startups too.

The point is that, in recent years, takeup of SaaS tools has soared around the world, with subscription software rapidly becoming integral to how many companies operate. This has provided big opportunities for savvy people with coding skills who’ve paid attention to this trend.

What genuinely excites you?

When pondering how to come up with business ideas, remember that you have to enjoy the career path you put yourself on. Coming up with a winning idea for a new kind of mail delivery cake company is a bit pointless if you don’t enjoy spending long hours in the kitchen. 

And there’s no sense in dreaming up funky new app ideas if you prefer work which allows you to get out there and meet customers face-to-face.

The bottom line is that setting up a business is hard work which may require you to work evenings and weekends, deal with setbacks, and power through uncertain periods. And you won’t muster the motivation to do that unless you genuinely have an affinity for what you do.

Step two: brainstorm like you mean it

Taken inspiration from your life, your passions, problems you’ve encountered, and existing businesses you can potentially emulate (or even compete with)? Then it’s time to commence brainstorming business ideas. 

This process may sound self-explanatory, but there are some good rules of thumb for optimising the creative process. Here’s how to brainstorm business ideas in the most efficient way possible.

Use a mind map

It’s important to organise your thoughts while brainstorming. An easy way to do that is by creating a mind map. Although the term “mind map” was popularised in the 1970s, the technique itself dates right back to the ancient world – a sign of just how effective it can be for

Simply put, a mind map is a diagram that sets out your ideas in a clear way. While there are free mind map makers available online, you can easily create one using a pencil and paper. A pencil is better than a pen as you’ll be able to rub out and re-draw the map as new thoughts come to you.

You typically begin with a single concept in the centre of the page. In this case, it may be a general business category, such as “ecommerce company” or “mail order food”. Or, if you’ve already drilled down to a specific type of business, the centre of your mind map might be “print-on-demand fashion” or “luxury brownies by post”.

You’ll jot down ideas relating to your business in a circular fashion, drawing lines to connect them to the central concept. These may be related to marketing, funding, branding, unique selling points, and so on. 

You can then expand on them by drawing more lines further out to yet more related ideas. For example, the section of the mind map for marketing can have more offshoots relating to different social media platforms.

By the end of the brainstorming session, you should have a nicely laid out summary of all your ideas which you can further amend and expand (or reduce) as you continue to plan your business.

Drop your filter

All bets are off when you’re brainstorming, and this is your time to really let the creative juices flow. Remember, you’re not creating a business plan or presenting your ideas to a critical panel. Don’t censor your thoughts or dismiss anything as silly, far-fetched or impractical – if you think it, write it down.

Worried about over-complicating your mind map? You can always scribble your raw ideas down on a separate piece of paper or Word document, and then consider which ones you’d like to add to the mind map. But the bottom line here is that quantity is just as important as quality during an early brainstorming session.

Share ideas with friends or family

Even if you’re planning to set up a company on your own, it can really help to hear someone else’s ideas. So, if you have friends or family members who are creatively minded, or better still have experience in running their own businesses, then why not recruit them for a brainstorming session? 

Make some tea or coffee and just relax and bounce ideas off each other. Even if they don’t bring extra ideas to the table, this can be a great way to fire up your own enthusiasm and hear immediate feedback on your thoughts.

Create a SWOT analysis

Once you’ve created one or more mind maps, it can be a good idea to undertake a SWOT analysis for small business ideas that seem promising. The good news is this is very straightforward, despite the technical-sounding name.

To do the analysis, you simply draw out a 2x2 grid by drawing a line vertically down the middle of a page, and then a horizontal line through the middle. The top left space should be headed “Strengths”, and the top right space should be headed “Weaknesses”.

These are pretty self-explanatory. Under each heading, you should list what you regard as the inherent, internal strengths and weaknesses of your business idea. For example, startup costs may be low (a strength) but it may require tech skills you don’t already have (a weakness).

Then, the bottom left space should be headed “Opportunities” and the bottom right space headed “Threats”. By contrast to the top two spaces, which are about internal factors, these two spaces should be used to list external pros and cons. 

For example, an opportunity may be the availability of a new app or social media platform which you can make use of, while a threat may be a strong competitor company in your local area.

You may feel that the various strengths and weaknesses of your business idea are obvious. However, it’s well worth doing a SWOT analysis, as seeing the lists of pluses and minuses next to each other can clarify the business idea in your mind, and allow you to objectively assess whether this is right for you.

5 signs of a great business idea

We’ve looked at how to come up with business ideas, but how can you really tell if you’ve settled on the right one?

Obviously, every entrepreneur is different, and your precise circumstances may make some business ideas more viable for you than for other people. For example, if you’ve got a large budget to work with – perhaps from saving up, or loans from family members – then that will allow you to start a business with bigger overheads.

With that being said, here are some general signs that a business idea is worth turning from dream into reality.

You’re itching to get started

Any kind of reluctance you might feel about an idea is a red flag which shouldn’t be ignored. You can only make a success of your business if you feel motivated, and motivation will only come if you’re enthusiastic about the business idea. Listen to your gut.

Friends and family think the idea is a good fit

Present your business idea to those closest to you, and ask them for their honest feedback. The key word here is “honest”. Loved ones may feel like they should be positive and supportive no matter what. Or, they may automatically be biased in favour of the idea simply because you’ve conceived it.

So, be sure to emphasise you’d like their objective, sincere assessment of the idea and whether they see it as a good fit for you. If they do, that’s a major green flag. 

The idea is easy to understand

Simplicity in business is a strength. If you can instantly communicate what your business is about, and quickly list the reasons why you feel there will be a demand for it, then that’s a very good sign that you’ll be able to attract the attention of potential customers.

There are low (or no) barriers to entry

As we mentioned above, genuine enthusiasm for your business idea is absolutely fundamental to success. But all the motivation in the world won’t count for much if there are insurmountable barriers to making the business idea happen.

Such barriers can include prohibitively expensive starting costs, or specific technical skills that will take a long time to acquire. The sooner you can start the ball rolling on your business, the better an idea it is.

Your idea has a USP

Earlier in this guide, we said that originality is overrated in business. However, it always helps if your idea has some unique selling point (USP) that will make it stand apart from others in your sector.

This doesn’t have to be anything too radical. It may be as simple as eye-catching branding, or a more active presence on social media compared to rivals. If most businesses similar to yours don’t tend to engage on Twitter, say, then incorporating this into your idea can really give you a head start.

How to bring your business idea to life

After coming up with a business idea which ticks all your boxes, it’ll be time to make it a real enterprise. Here are the important steps you’ll need to follow.

Do your market research

Chances are you’ll already have done an amount of market research when brainstorming business ideas and drawing up the SWOT analysis. 

However, more detailed research will be required when gearing up to launch your business, so that you have a good awareness of the sector you’re entering, and the other businesses you’ll be competing against. If you’re wondering how to do market research for a small business, here are some quick pointers.

Read online reviews

A great way to see how other businesses in your sector are faring is to check online reviews. There are multiple channels you can explore, from Google reviews to sites like Trustpilot and Tripadvisor. 

Reading reviews will give you an insight into which businesses are really pushing customers’ buttons, and whether they’re falling short in particular areas such as pricing or customer service.

Delve into social media

How do your competitors reach out to their customers on platforms like Facebook, Linkedin, Instagram, Twitter and TikTok? Can you see if customers are engaging with this content, and can you improve on how they do it?

If there’s a Reddit community, or subreddit, focused on the kind of product or service you’ll be providing, the posts there may be a rich source of information on what your potential customers are looking for.

Keep up with search trends

Consumers can be fickle, and trends come and go. With certain types of businesses, particularly creative ones like handcrafting jewellery for example, it may pay dividends to be aware of what your customers are searching for online.

Sites like BuzzSumo provide in-depth analysis tailored to your business sector, for a price. However, if your budget is tight, you can make use of Google Trends, which reveals the most popular search terms related to your sector. 

You can also search relevant hashtags on sites like Twitter and Instagram so you can stay on top of what’s on customers’ minds.

Select the right legal structure for your business

At some point prior to launching your business, you’ll need to decide what kind of legal structure you’ll be operating under. Here are the main options open to you.

Sole trader

This is the most straightforward route to working for yourself. As a sole trader, you effectively are your business, and vice versa. Any money you make is automatically your own, and you won’t have to formally register, except with HMRC for paying your annual taxes.

Bear in mind that the lack of legal distinction between you and your business means that you’ll be personally liable for any losses or business debts that you may accrue.

Another potential drawback is that being a sole trader may cause you to be perceived as less professionally credible compared to being a limited company. This is only likely to be the case if your clients are other businesses – for example, if you’re running a web consultancy or copywriting agency – in which case you may find that some will only hire limited companies.

Partnership

A partnership functions in a similar way as the sole trader structure, except that you and at least one other person share responsibility for running the business. As with being a sole trader, all profits after tax belong to you and your partner(s), and you’ll all be responsible for any losses or debts incurred.

The legal formalities are also kept to a minimum, with the only requirement being to register with HMRC for your tax affairs. One of the partners will be designated the “nominated partner”, who’ll manage the tax returns and business records.

Limited company

Setting up a limited company is a more complicated process, because your business will exist as a legal entity distinct from you. 

The big advantage of this is that it brings you protection – you won’t be personally liable for any losses or debts acquired by the business. Operating as a limited company can also bring you added prestige and credibility in the eyes of some customers/clients.

In order to become a limited company, you’ll have to register with Companies House, abide by certain accounting requirements, and ensure that your business pays Corporation Tax. Having an accountant is highly recommended if you’re running a limited company.

Think about the 7Ps of marketing

Not every type of business will require the same breadth of marketing. But, regardless of how modest or ambitious your plans are, the “7Ps marketing mix” can provide a useful framework when you’re deciding how to position and promote your business.

The 7Ps in question are:

• Product – this is the core of your business, and product-led marketing is all about emphasising your USP and why your product or service is the right choice for potential customers.

• Price – the question of how to price a product or service will be based on your market research, and whether you want to position yourself on the lower or higher end of the market.

• Promotion – these days, business promotion largely takes place online, and you’ll have to carefully plan how to leverage different social media platforms, not to mention marketplace sites like Fiverr, PeoplePerHour and Etsy (depending on the type of business you have).

• Place – this is tied in with the previous P, as “place” can refer to your digital existence as well as your physical premises. What will your website look like, and will you feature blogs and other sections that are regularly updated in order to drive up your search engine rankings?

• Physical evidence – this can encompass a whole range of things, from premises to product packaging to online invoices. Making sure everything is as well-designed and professional as possible is key to establishing a reputable business.

• People – your business is only as good as the people who run it. To start with, that may just be you, and the responsibility for maintaining high standards and excellent customer service will rest on your shoulders.

• Process – this final P refers to how your business actually operates day-to-day. Good communications with your customers, an efficient system for handling complaints or challenges, and seamless tracking of incomings and outgoings are all important.

Write your business plan

Business plans are often synonymous with applying for loans and investment. But even if you’re not seeking financial backing, it’s well worth drawing up a business plan simply to clarify where you’re going and what you need to do.

Wondering how to write a business plan? There are no hard and fast rules, it’s just about putting as much salient info down as possible. This should typically include:

• An executive summary of what your business will do, and what legal structure you’ll adopt

• A summary of your target market, relevant consumer trends, and your potential competitors

• Details of business loans and other forms of funding, and your repayment requirements, if any

• An overview of your main overheads and your sales forecasts

• An overview of the tools you’ll be using, from hardware like point of sale solutions to software like SumUp Invoices.

Ready to start your business?

We’re hoping this guide has shown you how to come up with business ideas that could potentially change your life.

By taking a methodical approach to researching viable business sectors, brainstorming exactly how you’ll penetrate a market, and ensuring you pick the right tools for the job, you’ll set the foundations for what may be longstanding success.