How to come up with a Business Idea?
If you’re an aspiring entrepreneur, you want to build a business that provides some sort of value to your customers.
Value creation is the first step in a business model. Your product/ service is valuable to people when it is considered worthy enough to pay for it. Value creation can be neatly divided into five categories:
1. Value Creation in terms of entertainment
Any business or service that provides entertainment comes under this category. Examples include movie theatres, restaurants, entertainment parks, record labels, and movie production companies.
These businesses usually require heavy investments but restaurants and cafes are good ideas for a small amount of capital.
2. Value Creation in terms of physical appeasement
This category includes services and products that change or at least guarantee to change our physical appearance in some way.
Beauty parlors, nutritionists, fitness centers, and skincare clinics are some examples.
3. Value Creation in terms of necessities
This is so far the most important type of value creation. Everybody needs food, healthcare, smartphones, internet, basic clothing, and fuel.
Examples of such businesses include retailers, hospitals, clothing stores, and gas stations.
These types of businesses provide immense value to customers, however, the success of each one depends on factors such as competition, quality of the service, costs, etc.
4. Value in terms of luxury
Value creation that focuses on luxury caters to a small group of exclusive customers. Everyone can’t afford a Rolex watch or a Ferrari.
Since their products are so overpriced, these businesses generate huge amounts of revenue by catering to a small group of people.
5. Value Creation in terms of education
Universities, schools, online course providers, and language-learning centers all provide value in terms of education.
Starting such a business is a good idea if you’re willing to put in the time and effort to convince customers that your service will benefit them in some way.
You can brainstorm a great idea that provides value in terms of any of the 5 aforementioned categories. Please note that these are not the only categories of value creation.
Many other businesses fall outside the domain of this list, for example, banks, fintech, and tech companies.
