A Business Idea vs. A Business Opportunity
Most budding entrepreneurs do not even know the differences between a business idea and a business opportunity; and as a result, they use both terms interchangeably. When they say the little things can ruin your plans if left unchecked, this can be one of them.
Now for those who are yet to identify the difference between a business idea and opportunity, I want you to know that they are not the same; and this article will help you understand the difference.
What is a Business idea?
A business idea is a concept that can be used to make money. Usually it centres on a product or service that can be offered for money. An idea is the first milestone in the process of founding a business. Every successful business started as someone’s idea. Since business ideas are usually just abstract and remain in the mind of the innovator or entrepreneur pending when it has materialised successfully or not, every business idea with prospects for growth must have the following:
A prospective market
Solve the customer’s problem
Be unique in the market
Prospective revenue sources
High prospects for profitability in the long run.
That said, starting up a business based on a business idea is never all cherries and roses because there is always an extremely high margin for failure. In fact, 9 out of 10 start-ups fail within their first 3 years, and amongst those that succeed, many more still go on to shut down within the next 10 years.
For example, Ecocash was a concept that was developed and test in house before being released to the public, it revolutionized money transfer in Zimbabwe, becoming the Colgate of toothpastes, the Coke of soft drinks.
So, unless you are willing to be patient for probably many years before you make any type of profits from a business idea, you may be better off doing something else. In all essence, a business idea is a concept without any real customers yet. A successful business idea must meet the following three conditions:
1. It must offer benefit to the customer by solving a problem or fulfilling a need. Customers buy products and services for just one reason; to satisfy a need. So, if your business idea cannot satisfy customers, it will not be successful. Every successful business idea must have a unique selling proposition.
2. It must have a market that is willing to accept it. A promising business idea must offer a product or service that would be accepted by a large market. It must also have feasible arrangements for catering to that large market as well as unique values that differentiates it from the competition.
3. It must have a mechanism for making revenue. A successful business idea must show how much money can be earned from it and how the money will be earned. Having discussed in full detail what a business idea means, let us now look at “business opportunity”.
What is a Business Opportunity?
A business opportunity on the other hand is a proven concept that generates on-going income. In other words, a business opportunity is a business idea that has been researched upon, refined, and packaged into a promising venture that is ready to launch.
Generally, business opportunities are taken advantage of by entrepreneurs because the risks are far much lower than an unproven business idea, and they create greater chances of success for the entrepreneurs.
Essentially, a business opportunity can only be considered as one when it has met some or all of the following criteria:
It must be a proven concept with several successful businesses using the same model.
The gross margins of the business must be high.
The business must have the potential to reach a break-even point within 12 months – 36 months.
The capital or investment required to start up must be realistic and within what you can raise.
You have the skills or people needed to make the business successful.
It must have the potential to keep on improving with time.
The risk level must be many times lower than an unproven idea.
After you have refined and packaged your business opportunity in your mind, you can have it documented by writing a business plan. You can then either implement on your own or sell it to someone else for profit (probably because you cannot afford the capital required to flag off the business).
The Clear Difference Between a Business idea and Opportunity
In conclusion, I want you to know that the world is filled with brilliant ideas, but the world lacks entrepreneurs who have the capacity to turn such ideas to profitable business opportunities. It is one thing to develop an idea, but it is an entirely different ball game to turn an idea into a business opportunity.
So, a major difference between an idea and an opportunity is that you can sell a business opportunity, but you cannot sell an idea (it is not entirely impossible but it is difficult).
Take Colonel Sanders for example, he tried for many years to sell his chicken recipe idea, but no one listened to him until he repackaged it and KFC (Kentucky Fried Chicken) was born. The moral to the story is, investors invest in business opportunities and ventures, not business ideas.
Now how do you turn a business idea into an opportunity? Well, you can turn a business idea into a business opportunity by conducting market research and feasibility study on your idea, writing a business plan and assembling a business team that will work with you on your idea. Only then will such idea become an opportunity that will attract investors and probably get the needed financing.
Let us know in the comments, at what stage you are with your business idea or opportunity, we are willing to help you market research, design your logo and/or brand your business at affordable prices. We believe in start ups and perseverance.