The Difference Between A Business Idea And A Business Opportunity

There’s always been a wide misconception between what a business idea is and what a business opportunity is. While both may appear similar, in many ways, they’re two entirely different things.......


One focuses on trying something that hasn’t necessarily been tested to great success in the marketplace, while the other involves taking advantage of an existing market, its customer base, demand, and much more to build a thriving business.

If you’ve always wondered what the difference between a business idea and a business opportunity is, this article goes in-depth to clarify the details:


First, What Is A Business Idea
A business idea is a concept that has the potential to make money. It is tied around a product or service but has no commercial value yet because the concept has not been proven. It is usually the first step in founding a business or 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.

Since business ideas are usually just abstract and remain in the mind of the innovator or entrepreneur pending when it has materialized 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
Be innovative
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’s always a very high margin for failure. In fact, 9 out of 10 startups fail within their first 3 years, and amongst those that succeed, many more still go on to shut down within the next 10 years.

So, unless you’re 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.




Next, What Is A Business Opportunity
A business opportunity is a concept that has been proven severally in the marketplace with the presence of several or many successful businesses doing the same or similar things. The great thing about business opportunities is that you don’t have to start conceptualizing from the get-go. You simply study the market and find a way to play a role in it alongside other businesses that have been operating successfully in it for many years.

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.
In summary, a business opportunity = a validated business idea = business idea + customers

To Sum It Up
Business ideas and business opportunities are similar in the fact that they’re both concepts. But the key difference between a business idea and a business opportunity is that business ideas are unproven concepts while business opportunities are proven concepts.