Business ideas are not business opportunities! Most entrepreneurs fail in the entrepreneurial conquest due to the misconception of what an idea is and what an opportunity means. While these two terms appear to be similar in many ways and often have been used interchangeably, they, however, means two entirely different things.
Most entrepreneur startups fail immediately after inception due to this inability to differentiate between these two terms. While one centers on exploring and existing market the other focuses on creating and trying out an entirely new market with its new product or service.
Have you ever wondered what the difference between a business idea and business opportunity is? Have you used them interchangeably in the past without knowing the difference? If yes, then no more after reading this as we will provide you with a clear-cutting difference between a business idea and business opportunity.
What is a Business Idea?
A business idea is simply a concept that can be traded for money. It can be a product or service that can be offered in exchange for money. Coming up with a business idea is a crucial step towards founding a business and creating a prospective profitable industry that many other people would eventually want to get into because of the success one or a few entrepreneurs have found in it. However, an idea has no commercial value yet because the concept has not been proven.
Every successful business today, started as an idea, someone’s idea but business ideas are usually just abstract and most times remain in the mind of the creator or innovator pending when it has materialized and not all business ideas, not minding how innovative will materialize as profitable.
To ascertain the profitability of an idea or its chances of success in the market, it should be tested against the following as every business idea with prospects for growth must have the following:
- A Starving market
The success of a business idea depends on its market. A brilliant business idea is doomed if it has no Market.
- Must Solve problem
Entrepreneurial success is birthed following ideas that solve a problem. No matter how innovative the idea, it must solve a problem.
- Be unique
Ensure your business idea is not conventional, it should be unique and have and offer unique products or services to your prospective market.
- Be innovative
The acceptability of a business idea depends largely on how innovative the idea is. Being innovative simply means using conventional methods that have rarely been adopted before.
- Have Earning potential
The business must be profitable in the long run.
Having said that, please also note, starting up a business based on a business idea (no matter how innovative or brilliant) is never all cherries and roses because there’s always a very high margin for failure. Studies reveal that 9 out of 10 startups fail within their first 3 years, and amongst the 1 that succeeds, many more still go on to shut down within the next 10 years.
Read Also: Top 10 Most Lucrative Businesses In Nigeria
What is a Business Opportunity?
Haven understood what a business idea is, A business opportunity on the other hand is a concept that has been proven severally in the marketplace and generates profits. In other words, a business opportunity unlike the business idea that requires conceptualization from the on-set has been researched and has long been started by several other people. You don’t have to conceptualize the startup since several or many successful businesses have started and doing the same or similar things.
A business opportunity is regarded as one after it has been found to meet the following criteria:
- Have high gross margins.
- Have short break-even cash flow time (12 -36 months)
- Have realistic startup capital
- Have the ability needed to attain success.
- Residual income potential
- Have the potential for improvement
- Have low liability risk.
Unlike a business plan that requires a whole lot from conceptualization to creating a model, a business opportunity can be started faster and easier and by exploring the already available marketing start making income.
The Difference between a Business idea and Opportunity
In conclusion, Business ideas and business opportunities are similar in the vain that they’re both concepts. But the key difference is that business ideas are unproven concepts while business opportunities are proven concepts with several successful models around.