The businesses we find around were born out of an idea. These ideas are generated through observation, a need, an opportunity or people’s wants or needs of other businesses. Sometimes, business ideas are developed from an individual’s education or past experiences.

A business idea should answer the following questions:

  1. What products are you going to offer?
  2. What services are you going to offer?
  3. Who will buy your product or service?
  4. Where will you sell the product or service?
  5. How will the product or service be sold to the customers?

A business idea therefore is a detailed description of the intended business venture.

Therefore, before starting a business, you need to have a clear business idea with an understanding of the product and service that you intend to offer.

A business must address a certain need among the customers. People will pay for goods and services and as such a business idea must attract people since it addresses their need.

Business ideas are identified through positive and  creative thinking. They can come from different sources such as ideas built on local resources, local needs, local activities, interests and hobbies.

Task: list the kind of services or products you  can offer or supply to such kind of a gathering.

Expected answers: drinking water, umbrellas, sodas, ice cream, snacks such sweets, nuts,crisps, foodstuff, miniature fans, branded souvenirs like pens, head scarfs,caps, handkerchiefs, ties, badges,  etc

Learned lesson: business ideas are born out of a felt need in a community. These can be projected to address future related needs. From the example of the gathering above, an entrepreneur can develop a business that focuses on provision of specific items for such forums.

A business idea should answer in detail the which, what, who and how of the business


Which need does your product or service satisfy for your customer? Your business idea should always have the customer and the customer’s needs in mind. It is important to project into the future and find out what your future customers would want when you work out your business idea.


What type of product or service will your business sell? Your business idea should be based on products you know about or services you are good at. The rule of the thumb is running a business where you have a command in skills and or experience.  They must be products or services that people are willing to pay for. Analyzing various business ideas will help you to focus on the type of business you will be good at.

Definition of a product.

A product is an object that people pay for. It may be something you make yourself or it may be something you buy to re-sell. The product should answer part of the what question. Examples of products may include: food items e.g traditional foods, baked goods like cakes and cookies, tailor made clothes, ready-made clothes, tools etc

Definition of a service.

A service is something you do for people, which they pay for, for example, running errands on behalf, shoe shining, cleaning, hairdressing, repair works etc.


Who will buy your products or services? Customers are a key part of the business. It is therefore important to establish the kind of persons who will buy your product or service. Customers are also referred to as the target market. The entrepreneur should have proper knowledge of the kind of people who will be able and willing to pay for the product or service being provided for sale. If the target market is relatively small then it may be difficult for the business to realize any profit. Will you sell to a specific type of customer or to everyone in an area? There must be enough people who are able and willing to pay for your products and services or the business will not make a profit.


How are you going to sell your products and services?  A plan on what channel to use in reaching the customers is critical. If you will produce industrial items like soaps, chemicals you may consider to use wholesalers who will in turn sell to retailers and then to the consumers. On the other hand, if you are offering a highly perishable product like fresh fruit juice or a personalized service like hairdressing, then the business may need to be located nearer to the target market where you will offer the product or directly to your customers.

Starting a business calls for a lot of effort and planning. Otherwise its very easy to suffer losses if one gets into the wrong business idea

To summarize, the following key considerations must be made:

  1. What are the customers’ needs that I want to address
  2. What are the costs of providing the service or product
  3. How much will the customer be willing to pay for the service or product

Thus if you have knowledge on the customers’ wants + your skills and experiences + costs of proving the service or product + what the customer is willing and able to pay=a profitable business.

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