A business idea is a concept that can be used for financial gain that is usually centered on a product or service that can be offered for money. An idea is the first milestone in the process of building a successful business. The characteristics of a promising business idea are: * Innovative * Unique * Problem solving * Profitable *understandable A business idea is often linked to its creator who needs to identify the business's

value proposition In marketing, a company’s value proposition is the full mix of benefits or economic value which it promises to deliver to the current and future customers (i.e., a market segment) who will buy their products and/or services. It is part of a co ...

in order to launch to market and establish

competitive advantage In business, a competitive advantage is an attribute that allows an organization to outperform its competitors. A competitive advantage may include access to natural resources, such as high-grade ores or a low-cost power source, highly skilled ...

. A business idea is the first spark of Entrepreneurship.

Meaning of innovation

For businesses, this could mean: creating new ideas, new

product development In business and engineering, new product development (NPD) covers the complete process of bringing a new product to market, renewing an existing product or introducing a product in a new market. A central aspect of NPD is product design, along w ...

through research and development, or improving existing services. Innovation can be the central focus of a business and this can help them to grow and become a

market leader Market dominance describes when a firm can control markets. A dominant firm possesses the power to affect competition and influence market price. A firms' dominance is a measure of the power of a brand, product, service, or firm, relative to ...

if they execute their ideas properly. Businesses that are focused on

innovation Innovation is the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services. ISO TC 279 in the standard ISO 56000:2020 defines innovation as "a new or changed entit ...

are usually more efficient, cost-effective, and productive. Successful innovation should be built into the

business strategy In the field of management, strategic management involves the formulation and implementation of the major goals and initiatives taken by an organization's managers on behalf of stakeholders, based on consideration of resources and an assessmen ...

, where you can create a culture of innovation and drive forward creative problem-solving.

Examples of innovation

* Apple was a $2 billion company in 1997, then it jumped to a $700 billion valuation in 2015 as a result of the innovation that came from the Macbook, iPod, iPad, and iPhone. * Tesla built an electric car with exceptional aesthetics and efficiency, which has helped build the electric sports car company earn a market capitalization of $33 billion, with revenues up 54% since 2014. * Uber was founded in 2009 and has become a $50 billion company in just 6 years, with its simple yet unusual idea of getting a taxi with the press of a button that has completely revolutionized the way we book taxis. These successful companies were built on sheer innovation and we can see how valuable they have become in the short time they have been around or have been focusing on innovation. When Tesla's value is compared to that of General Motors, we see that the market capitalization of General Motors is $53.98 billion today in which the company has been around since 1908 whereas Tesla was founded in 2003 and has achieved 50% of General Motors value within 12 years.

Unique selling proposition

A unique selling point (USP) is the factor that makes a company or a product stand out from its competitors, whether it is through; pricing, quality, customer service or innovation. Each successful company has a

unique selling proposition In marketing, the unique selling proposition (USP), also called the unique selling point, or the unique value proposition (UVP) in the business model canvas, is the marketing strategy of informing customers about how one's own brand or product is ...

(USP). A USP can be created through the element of being first to a market, for example

Uber Uber Technologies, Inc. (Uber), based in San Francisco, provides mobility as a service, ride-hailing (allowing users to book a car and driver to transport them in a way similar to a taxi), food delivery (Uber Eats and Postmates), packa ...

was the first company to allow for

taxicab A taxi, also known as a taxicab or simply a cab, is a type of vehicle for hire with a driver, used by a single passenger or small group of passengers, often for a non-shared ride. A taxicab conveys passengers between locations of their choi ...

hailing via

mobile app A mobile application or app is a computer program or software application designed to run on a mobile device such as a phone, tablet, or watch. Mobile applications often stand in contrast to desktop applications which are designed to run on d ...

. Because Uber had reached this market first, it had a USP and therefore it received loyal customers. However; with fierce competition copying Uber's

business model A business model describes how an organization creates, delivers, and captures value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010 in economic, soci ...

, Uber has had to develop its service through innovation

Problem solving

Business ideas that solve problems are fundamental to developing the world and companies such as Curemark are one of many who do this. Curemark is a biotech company founded by Joan Fallon, who noticed that a lot of the children she treated were low on an enzyme for processing protein and since then she has quit her job and has built Curemark to solve this problem. Curemark has now raised $50 million and is on its way to solving a problem that truly exists.

Profitability

Profitability In economics, profit is the difference between the revenue that an economic entity has received from its outputs and the total cost of its inputs. It is equal to total revenue minus total cost, including both explicit and implicit costs. It i ...

is a business's ability to generate earnings compared to its costs over a certain period of time. This is possibly the most important aspect of any business idea in the long term, as this is what makes a business survive in order to keep having the impact that it has. Profitable ideas need a strong

revenue stream A revenue stream is a source (or category of sources) of revenue of a company, other organization, or regional or national economy. In business, a revenue stream is generally made up of either recurring revenue, transaction-based revenue, project ...

against its costs and this tends to create the success of the business, however, some companies defy this and make losses to begin with, yet are still exceptional business ideas that are worth billions.

High valued companies making a loss

* Snapchat is valued at $10 billion despite making a loss, because of the monetization potential it has based on the 100 million everyday users of the app. * Uber is valued at $50 billion and is making a $417 million operating loss. Despite this,

investor An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some species of property. Type ...

s are still willing to offer large amounts of money to fund the company because of the potential the company has in the longer term.

References

{{Reflist Innovation