How to come up with business ideas in Sri Lanka + 5 great small business ideas

Have you ever wondered what it would feel like to own your own business in Sri Lanka? 

Have you been dreaming of escaping the 9 – 5 life, but struggle with figuring out which business ideas in Sri Lanka have the best returns?

Well, if this sounds like you – you’re at the right place. 

We’ve helped thousands of businesses begin their journey in Sri Lanka. 

Along the way, we’ve learnt a thing or two about the factors that set a good business idea apart from a bad business idea.

So, if you have been wondering about how to come up with good business ideas in Sri Lanka, look no further. 

This blog will guide you through the process of coming up with great business ideas.

Table of contents.

1. How-to: Develop a good business idea in Sri Lanka
2. The best businesses in Sri Lanka solve problems
3. Validate your business idea
4. Look at what other people are doing
5. How-to: Make sure your business idea succeeds
6. Business opportunities in Sri Lanka

How-to: Develop a good business idea in Sri Lanka 

Now, this might be your first time settling into the entrepreneurial mindset.

Or, you might’ve already tried a few times before this. 

We’ve had the opportunity to help a lot of budding entrepreneurs craft and perfect their business ideas along the way.

The most common trope we’ve come across is entrepreneurs that have tried and failed multiple times solely because they didn’t have a good process in place to develop their business idea along the way.

If either of these cases sound familiar to you, here are a few steps you can follow to develop your business idea.

Step 01: Make sure your potential business solves real life problems.

Step 02: Validate your business idea.

Step 03: Observe the market. 

Step 04: Ensure that you’re passionate about what you’re doing.

Having a good, foolproof process like this can help you eliminate the bad ideas and nurture the good ones.

Let’s take a look at all of these steps in detail. 

The best businesses in Sri Lanka solve problems

You heard that right, good businesses that make the most money in Sri Lanka solve real problems of everyday people. 

Let’s put aside local businesses for a second. What about global businesses? Do they follow the same rules?

You bet!

Think about Apple. 

Let’s go back to the very beginnings of the iPhone.

What was Steve Jobs trying to solve when he and his company, Apple, invented the iPhone? 

Poorly designed phones. 

Back in 2007, technology was rapidly developing. However, the phones at that time didn’t really reflect that. Don’t get us wrong, even the team at Simplebooks have really fond memories of their old Nokia brick phones and their Motorolas. But, they weren’t the high-tech, uber-functional and futuristic phones we had all seen in time-travel movies. 

Then came the iPhone. A beautifully designed and functional mobile phone that solved a real problem people faced. Because it solved a very real problem, people lined the streets to get their hands on this new gadget.  And what followed this newfound iPhone craze? Money. A lot of it. 

Let’s take a look at a more local example.

Since we’re the ones writing this article – we’ll put ourselves to the test. 

Is Simplebooks solving a real problem? 

When we first started Simplebooks in 2017, it was really because one of our founders was very unhappy. He had been trying to register his new company for a few months, and the registration process was driving him insane. 

He couldn’t find a proper registrar that kept him informed about the process, registering a company took a long time (with a lot of delays in the middle), and the prices to register kept changing from time to time.

He. Was. Angry.

After talking to a few of his fellow entrepreneur friends, he realised that his peers were facing the same problem as well.

The Sri Lankan company registration process seemed overly complicated, there was no reliable information on how to register a company in Sri Lanka, and everybody had different prices for company registration. 

That’s when a new business idea struck him.

So, he got together with a colleague (who was a registered company secretary) and started Simplebooks.

And, how have we fared through the years?

Well, what started as a two-person company in 2016 is now (in 2021) a 30+ person company that has helped over 2,000 businesses begin their journey in Sri Lanka. 

So, the first step in coming up with a good business idea is to make sure that your idea solves actual problems. 

Validate your business idea 

You might ask yourself “But how do I know if my business idea is good?”.

This is a very good question to have.

However, you can improve upon this idea.

Instead of asking yourself “How do I know if my business idea is good?”, ask yourself “Will I, or anyone I know benefit from my business?”.

It’s as simple as that. 

As always, the best place to start looking for answers is by asking yourself. 

So, does your business idea solve a problem you’re currently facing?

If not, that’s fine.

The next place you can look at is your family and friends.

This is pretty easy to do as well. All you have to do is reach out to them. Send them a text, or write them an email, or give them a call, or better yet – invite them for a quick coffee and chat.

Get in touch with the people you’re closest to and ask them if your business idea:

1. Adds any value to their lives 
2. Solves a problem they are facing

And, when they’re giving you their feedback – remember to listen and take notes. Their responses could give you a lot of insight.

A radical approach to validating your business idea 

Here’s a completely different take on business idea validation – don’t ask yourself and don’t as your friends. 

Instead, let the market decide. 

Here’s the problem with our first approach – it only works if business your business idea is relatable to you or the people around you. 

What happens when your idea caters to niche audiences? Or demographics that are different to you and those around you?

This happens more often than you might think. 

So, what do you do then?

Market research, trial and error. You need to research your actual target audience and pitch it to them. 

Now, this carries a lot more risk. You don’t have your previous safety net. It’s a whole new world. However, you can still take the risk. Create your product or service, pitch your idea, and check if you can get paid customers. That last part is the most important bit. 

You need to have people that are willing to pay for your product or service. Take people’s feedback, re-work your idea and keep pitching until you have paying customers. If you don’t have paying customers, your business idea doesn’t work. 

Look at what other people are doing 

Now, I get that this might sound unoriginal. 

But, hear me out. 

If you’ve read Step 01 and 02, but still haven’t been able to come up with a business idea of your own – you can always try looking at what others are doing. 

Here’s the twist. Once you’re done looking at what other people are doing, try to look for what they’re not doing. 

Here’s an example:

Let’s say that you’ve looked around at the market (more specifically at what the successful start-ups are doing) and you decide that a furniture shop makes the most sense for you to start.

You notice that your potential competition does a few cool things like:

1. Letting the customers choose their own type of wood; 
2. Offers free delivery; 
3. Uses state of the art equipment.

However, you also notice that they lack a few other services like:

1. Letting the customers choose their own designs (your competition only offers a few limited designs);
2. Doesn’t offer instalment plans for wood-work; 
3. Has a very outdated web + social media presence. 

So, what do you do?

You take notes and offer your customers what your competitors offer + other services that they don’t offer as well.

This way:

1. You didn’t exhaust your creativity by having to come up with an idea yourself; 
2. You drew inspiration from those around you that have already made it; 
3. You found gaps in the market that you could profit out of 

How-to: Make sure your business idea succeeds 

You might come up with a really good business idea if you’ve followed this article up to now.

However, here’s the catch. 

To make sure that your future business has a chance at succeeding, you need to 

1. Have a vested interest in it and;
2. Have the technical skills to operate the business. 

This is a lot to ask yourself but, DON’T FREAK OUT. 

You can still succeed if you have at least one of these qualities.

Look at it this way: If you have a vested interest in your business idea, but you don’t really have the technical skills to operate the business; you can always hire someone with the technical skill set. 

But, you almost always need to be interested in your business idea. This is especially true if you’re going to start small. 

When you own a small business in Sri Lanka, you need to be able to give it your all.

This is kind of hard to do when you aren’t really too interested in the business you started. 

So, before you jump right in and begin – make sure you’re passionate about what you’re going to start. 

Business opportunities in Sri Lanka

All of the steps we’ve mentioned above should help you get started. 

However, if you’re still struggling a little – here are some of the successful new businesses in Sri Lanka that you could consider getting started in. 

1. Start an online business in Sri Lanka

Have you seen a lot of new online businesses pop up and advertise on your social media pages?

Ever wondered why?

More and more people have gotten accustomed to shopping online over the past few years.

This means that people are likely to trust and purchase from online stores more than ever now. 

You’re also at an advantage since there are a lot of infrastructure like widely available payment gateways to support your business activities. 

You can jump right in to the more common stores like:

a. Clothing
b. Jewellery
c. Computer accessories

Or, you could find niche markets that will enable you to sell unique products like.

2. Provide an online service 

If you aren’t really interested in selling products online, you can always sell a service online.

Just because we said ‘online service’ doesn’t necessarily mean all of your business’s services have to happen online.

You can choose to either run a completely online business or use the internet to help you find leads and expand.

3. Become self employed

Okay, the title sounds super vague. 

But hear us out.

If you’re already at a place in your life where you’re good at something, you can capitalize on that skill.

Let’s say you’re great at math, or you’re very educated and experienced in a certain field.

There might be a bunch of people online that are looking for the knowledge that you possess.
You can attract an audience by dispersing your knowledge either by writing about it or making videos about it.

Once you have a fair bit of traction, you can start monetizing on your audience.

You can either ask your audience to pay or invite advertisers to use your platform in exchange for money. 

4. Join the mobile food movement

Colombo is buzzing with people that are always on the move.

If you’ve ever wanted to get involved in the food industry, you can use this to your advantage.

Since people are always on the move, you don’t have to open a physical restaurant straight-away.

Instead, you can opt to start with a food truck.

This will help you keep your fixed costs really low and allow you to focus on making really good food.

Since you’re on a mobile food truck, you can always make sure you’re available at the right places.

Use this to your advantage and build some traction to begin with. 

5. Get started in IT

When we mean IT, we don’t mean just software development.

If you’re technically competent, you have a lot of options to get started in.

In case you’re good at web development, offer that as a service to people that are looking to start up a website.

If you know your way around domains and hosting, add that to your web development service.

If you’re technically competent and can help people manage their tech projects, offer that as a service.
The world of IT is very broad.

This can help you focus on a niche and monetize on that.

Start your business with Simplebooks!

Finalizing your idea and starting a business is only the beginning. 

If you’re really serious about your business, you need to register it with the Sri Lankan authorities. 

This is the only way you can gain access to perks like business loans, and gain credibility with the government and your clients.

But how do you register your business?

It’s actually not that hard. 

Here at Simplebooks, we’ve helped over 2,000 businesses register and get started in Sri Lanka. 

Our team takes care of the entire registration process so that you can focus on more important things like growing your business.

You can start registering your business right away by clicking on the button below!

What comes next?

1. Have your trademark registered 

Once you finish registering your business, you need to ensure that your brand has been protected. 

The best way to legally protect your brand is to register your brand as a trademark. 

2. Get help running your business 

Registering your company is only step one of running a legally compliant business in Sri Lanka. There are a few other legal processes you need to follow afterwards. Some of these include;

• Opening a tax file 
• Maintain book-keeping records of company transactions
• Auditing and paying tax
• Taking care of EPF/ETF requirements of the employees you hire