What sets entrepreneurs apart from other professions is their ability to spot business ideas. Even in seemingly crowded and oversaturated markets, skilled entrepreneurs can identify missed opportunities and create offerings that cater to unmet consumer needs.

While this ability comes naturally to some people, learning how to recognize ideas that have potential from duds is a skill that can be sharpened over time.

As experts, the members of Forbes Business Council have honed their ability to spot good business opportunities. Below, 16 of them share advice on “green flags” to watch for and how watching these key signs can ensure an entrepreneur finds success in their future venture.

1. An Unmet Market Gap

A top indicator of a strong business opportunity is identifying a genuine market gap or an unmet need where consumers are already improvising their own solutions. When you see potential customers struggling or expressing dissatisfaction with existing options, it signals a strong demand and a readiness to pay for a superior alternative. This is a key sign that the market is ripe for innovation. – Diogo Capela, Lamares, Capela e Associados

2. Deeply Rooted Ways Of Doing Things

Statements such as, “It has always been done that way” is a large “green flag” that there are exceptional opportunities. When a large problem is ignored, the majority of the world stops thinking about solutions, giving you the field. The longer this problem is ignored, the greater the lore that the problem is unsolvable, even when solution-enabling technologies have likely become available. – Thomas Farb-Horch, Thrive Bioscience, Inc.

3. A Subtle Societal Shift Or Change

An entrepreneur can spot a good business opportunity by identifying an overlooked or undervalued societal shift. Often, the most lucrative ventures emerge from subtle changes in human behavior, technology or culture. By keenly observing these shifts and recognizing their potential impact, entrepreneurs can identify opportunities to create products or services that address those emerging needs. – Anand Subbaraj, Zuper

4. An Inefficient Industry

Embrace a contrarian mindset to look for undervalued, out-of-favor and niche opportunities in inefficient industries. Find a location to quickly build economies of scale and gain a measurable competitive edge in smaller markets. For example, I have identified the potential of luxury RV resorts in southern Mississippi and Alabama. By the end of the year, I will own and operate over 1,500 pads. – Ben Spiegel, Redwood Capital Advisors, LLC

5. Strong Demand And Little Competition

An entrepreneur can spot a good business opportunity by seeing a gap in the market where there is a high demand. A key “green flag” to look for is strong demand and minimal competition. This is a good indication your business can thrive and grow without immediate saturation. – Barbara Schreihans, Your Tax Coach LLC

6. Subpar Existing Solutions

A good sign of a business opportunity is when you see a real problem people are trying to solve but existing solutions aren’t cutting it. If your idea offers a better way to fix that problem, you’re likely onto something valuable. – Ryan Hutchins, Peak Business Valuation LLC

7. A Clear Path To Commercialization

Spotting a good business opportunity involves identifying a market gap and understanding the problem it solves. One “green flag” is a clear path from gap identification to commercialization. The key is envisioning how filling this gap addresses a need and can be commercialized. Focus on turning the solution into a viable product or service, making it visible to customers. – Gandhi Perla, Fusion5store.com

8. Consistent Customer Feedback Or Demand

In my experience, an entrepreneur can spot a good business opportunity by identifying a clear market gap or unmet need. One “green flag” to look for is consistent customer feedback or demand indicating a strong desire for a solution that isn’t currently available. This shows there is a real problem to solve and a potential market ready for the product or service. – Shehar Yar, Software House

9. A Good CAC-To-LTV Ratio

One “green flag” to look for is if the customer acquisition cost to lifetime value ratio is above 3.5 and has a payback period of 15, 30 or 60 days. This shows that the business can enable faster reinvestment, less risk and better cash flow. These quick-return opportunities can support sustainable growth, which in turn signals a good business opportunity. – Shivangi Khurania, Udeso

10. Emotional Drive

Emotional drive is a sign that indicates genuine demand and potential for meaningful impact. For instance, PissedConsumer was inspired by an unpleasant vacation. The emotions I felt gave me an opportunity to grow on a personal level and a way to support others. Passion can fuel innovation and help build a strong connection with an audience, turning personal challenges into valuable business opportunities. – Michael Podolsky, PissedConsumer.com

11. Few Or No Existing Solutions

One way an entrepreneur can spot a good business opportunity is by identifying a clear market gap in a problem that many people face but that no one else is adequately solving. A strong “green flag” is when potential customers express a real need or frustration but there are few or no existing solutions. This indicates a demand that you can fulfill, often leading to a successful venture. – Mohammad Bahareth, Mohammad Bahareth Consultation & Research Office

12. The Potential For Recurring Income

A “green flag” for a good business opportunity is one where there is potential for recurring monthly income. This will keep the business healthy and not dependent on making sales all the time. – Allen Kopelman, Nationwide Payment Systems Inc.

13. A Solid Team And Culture

A good business opportunity goes beyond just exceptional product/market fit, annual recurring revenue and EBITDA; it’s about the people. Is the business irresistible to the best talent in your industry? Do its values align with how it treats its customers and colleagues? An organization rooted in meaningful culture will open the door for entrepreneurial opportunities. – Tim Brackney, Springline Advisory

14. An Emerging Trend

Spot the trends that have yet to reach the mainstream. Look for emerging technologies, shifting consumer behaviors or underserved niche markets that have the potential to explode. Early adoption of these trends can position your startup as a leader and innovator in a rapidly growing space. – Elie Y. Katz, National Retail Solutions (NRS)

15. A Scalable Solution

Good opportunities emerge where societal needs intersect with the potential for positive change. Look for scalable solutions that address growing trends and create value beyond profits. Seek areas to innovate at the intersection of multiple needs, such as sustainability and technology. The most promising ventures balance social impact with economic viability. – Alessandro Lombardi, Elea Data Centers

16. High Potential For A Big Impact

There’s an unmet need, of course, but I think the x-factor is impact or the ripple effect that a cool new product or service will create. Sometimes the need isn’t fully clear, but the power of the idea is. If there is potential for profound, positive change, then it could be an opportunity worth exploring, even if the immediate need isn’t fully apparent. – Suzanne Lerner, Michael Stars