Hobby businesses

       Pros:

      ■ You know you like it

      ■ You build on your existing knowledge base

      ■ You may already have contacts—suppliers, potential customers, distribution channels

       Cons:

      ■ You lose your source of relaxation

      ■ Your skills may be insufficient as a professional

      ■ You will have to make decisions based on pleasing customers rather than yourself

      ■ You may not be able to earn enough money

      ■ Someone else’s work experience. Often the work experience of a family member or close friend can spark an idea. Familiarity with an industry or existing business gives you some knowledge of potential opportunities, just as your own work experience or hobbies do.

      ■ Systematic research. Activities such as undertaking market research or attending business opportunity seminars have sparked ideas for a number of entrepreneurs. For example, you may be interested in a growth field such as clean energy. To start a new business in the field, you could immerse yourself in data and information to discover what’s needed or missing.

      ■ An “Aha!” moment. Most of us have at some time in our life encountered a personal need, a business situation, or an idea when fiddling around with equipment or technology, and instantly thought up a way to approach it better. Of course, most “Aha!” moments are likely based on past experience and expertise, even though we may not be consciously aware of the connection at the time.

      It’s helpful to learn about where other successful entrepreneurs got their inspiration, but that doesn’t mean it will determine your path. Thousands of different kinds of businesses, products, and niches beckon you when you widen your horizons. Rest assured that every industry in every sector has opportunities for entrepreneurs like you.

      REAL-WORLD RECAP

       Where does inspiration come from?

      ■ Previous work experience

      ■ Hobbies or personal interests

      ■ Someone else’s work experience

      ■ Systematic research

      ■ An “Aha!” moment

Opportunities in old industries

      New industries clearly offer a great many business opportunities that attract entrepreneurs. After all, they’re exciting and they’re in the news. Because new industries often grow rapidly, opportunities abound for innovative businesses and brand-new concepts.

      But, old industries also often hold entrepreneurial opportunities. Here’s why: As industries age, big corporations tend to dominate them. That should mean it’s extremely hard to compete in old industries. And it is, usually. However, once these big companies get huge, they often start to neglect or eliminate some of their smaller—but still profitable—customers or market niches.

      Huge corporations regularly jettison customers, product lines, or even entire divisions that don’t meet certain revenue levels—often in the tens or even hundreds of millions of dollars. Or, as companies expand, they develop increasingly bureaucratic procedures that alienate many of their long-time customers. Yet that doesn’t mean those customers or product lines couldn’t be profitable for smaller, hungrier companies.

      For example, when the first supermarkets opened in the ’30s and ’40s, these stores, relatively small by today’s standards, bought out local grocers, bakeries, and butcher shops, often shutting down neighborhood stores. The trend toward consolidation continued throughout the ’50s and ’60s, and as more and more people moved to the suburbs, increasingly large supermarkets sprang up there to serve them. The dawn of the “superstore” in the ’70s and ’80s led to the rise of big discount stores, such as Walmart and Target, and some of these stores eventually carried groceries as well, eliminating more neighborhood grocers. This consolidation of supermarkets, which continues today, has created opportunity for more specialty grocery stores, both large, such as Trader Joe’s and Whole Foods, and small, such as bakeries, butcher shops, and farmers markets—many of the types of stores that supermarkets put out of business decades before.

      Other innovative food suppliers that deliver directly to homes continue to change the food shopping and buying landscape. These include community supported agriculture (CSAs) and fresh-food meal kits that provide pre-measured portions of all the ingredients customers need to assemble a recipe of their choosing. In 2015, US consumers spent more than $1 billion dollars on meal kits alone.

Apply technology in non-technology industries and markets

      New technologies often create whole new industries, leading to an explosion of new businesses. Whenever a technology or device is invented—let’s say television, the computer, or the Internet—the first, often huge, business opportunities come from making and selling those specific technologies. The second wave comes from making and selling peripheral products or support services for those technologies.

      But there’s a third wave of very real business opportunities—when entrepreneurs begin to make, sell, and implement those new technologies in processes and equipment for specific industries. For example, the first wave of “cloud”-based applications (applications based in the Internet) was designed for the general corporate market (such as Salesforce CRM, an Internet-based customer relationship application) or for the general consumer market (such as Google Docs). Then, entrepreneurs seized on these new technologies to develop cloud-based solutions for specific industries, creating many new successful businesses.