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Choosing an idea

Every good business should start with a good idea

Choosing the right idea can signal the success or failure of your business - so start by looking at your skills and interests.

Can I turn my hobby into a business?

For many aspiring entrepreneurs, there is a clear opportunity in turning a hobby or leisure activity into a small business idea. Many highly profitable businesses begin life this way. Anita Roddick, founder of the Body Shop, began by making skincare products on her kitchen table to give to friends. Don't write off your interests as something that you do just for fun - you may have a skill that other people would be happy to pay for.

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Where can I look for an idea?

If you want to run your own business but are unsure of what you want to do, there are a number of ways of identifying a sound business idea, including:

  • Look at your current job. If you work for a business where people are constantly complaining about one aspect of their work, there may be an opportunity to create a solution to their problem and market it through a new business.
  • Do you have money to invest but no idea what you would like to do? Purchasing a franchise may be the solution for you. Franchises are members of existing business networks (many of them popular high street outlets), which provide a packaged business opportunity with marketing, stock supply and administration taken care of.
  • Is there a business idea that you are really interested in, but you don't have any experience? Carefully researching the market and developing a small business in this area may be the ideal solution.
  • Do you have any hobbies that could be turned into part- or full-time business opportunities?

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Can I buy an existing business?

Buying an existing business is possible, although it can have some pitfalls. You must be clear why the previous owner is selling the business and have all documentation thoroughly checked by your accountant and lawyer. There are specialist agencies that deal with the sale of businesses and they can advise you on the availability of commercial businesses in your area. In addition, trade journals and local papers can be a good source of information on existing businesses for sale.

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How do I know if my idea will work as a business?

Once you have identified your business idea, you will need to find out whether it will work as a business. At this point it will be useful to carry out some local research to find out whether there is a market for the goods or services you plan to offer. Points to consider include:

  • Competitor information: find out whether anyone else offers the same goods and services locally. These businesses will be your direct competitors and could have an adverse effect on your business.
  • Indirect competitors: such as businesses offering similar goods and services to those you plan to provide.
  • Customer information: who will buy the goods or services you plan to offer, and what market share must you achieve if your business is going to survive?
  • Market sector information: this will enable you to build up a picture of trends and issues that may affect the market you plan to work in. You should consider whether the market is growing or shrinking, and if it is near saturation point. Any trends that may increase or decrease demand should also be considered

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Where can I find this market information?

Business information is available from a variety of sources, much of which is free of charge. Sources of market information include:

  • Your local library's reference section will carry market reports, Government statistics, trade publications and local business directories, all of which can provide information on competitors and market trends.
  • The Internet is a good source of market and trend-related information. However, you must take care to check that the sites used are providing up-to-date, UK-based material and that it is from a reputable source, such as a trade association or leading business journal.
  • Local business directories such as Yellow Pages or your local telephone directory can be trawled for details of direct local competitors.

Trade publications and directories specific to your particular business sector are another useful resource. See for a directory

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Hints and tips

  • Choose an idea that you are passionate about, as you will need to sustain your interest over a long period of time.
  • Don't write off your interests as something you do for fun - it may be possible to turn a hobby into a thriving business.
  • Make sure there is a market for your idea and carry out thorough local market research.
  • Consider other options like buying an existing business or operating a franchise.
  • Talk through your ideas with an impartial third party, such as a business adviser.

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