Generation and sources of business ideas Igor Roitburg
Outline • Definition of entrepreneurs and entrepreneurship
• Factors considered when preparing to be self employed
• Generation and sources of business ideas
• Choosing a product and a market
• Qualities of a good business opportunity
• Business plan development
• Factors that determine enterprise success
Introduction • Entrepreneur: is one who is willing to bear the risk of a new venture if there is a significant chance for profit
• Peter Drucker (1909-2005) took this idea further, describing the entrepreneur as someone who actually searches for change, responds to it, and exploits change as an opportunity.
• Entrepreneurship is the process of starting a business or other organization.
Entrepreneurial Characteristics • Creativity
• Involves continuous learning, questioning and thinking
• Dedication
• Planning must be joined by hard work to succeed
• Determination
• Includes persistence and the ability to bounce back after rough times (Success is the motivator; money is a reward)
• Flexibility
• Ability to move quickly in response to changing market needs
• Leadership
• Ability to create rules, set goals and capacity to follow them to fruition
• Passion
• What gets somebody started and keeps them there!
• Self Confidence
• Comes from thorough planning, expertise and gives entrepreneur ability to listen without being swayed
Generation and sources of business ideas • Invite everyone in the quest for new ideas.
• Friends, family, colleagues e.t.c
• Involve customers in the process of generating ideas
• The traditional focus group needs more focus. Form advisory boards of key customers to serve as sounding boards for ideas. Identify customers who tend to buy the latest versions of your products. These “lead adopters” can provide you with insights about where the market may be headed and how your organization can best position itself.
• Involve customers in new ways
• Look outside your own field or industry for ideas on how to get customer input
Generation and sources of business ideas • Focus on the needs that customers don’t express
• Learn from customers by observing what they are not doing, listening to what they are not saying. Recognize the sources of their frustration and find potential ways of eliminating it
• Seek ideas from new customer groups
• Look at your customers’ customers and your competitors’ customers and ask how do I meet their needs?
• Involve suppliers in product innovation
• think of your organization as your supplier’s customer. You, too, have unarticulated needs. Try articulating them and get your supplier’s ideagenerating capacity working in concert with yours.
• Benchmark idea-creation methods.
• Innovation-adept firms invest in ideation sessions, read books, attend seminars, and constantly seek to improve their skills
Why become and entrepreneur • idiosyncratic entrepreneurship; those choosing selfemployment regardless of opportunity and fit with professional background for ‘other reasons’; • market-facing opportunity entrepreneurship; those choosing self-employment because of perceived external opportunity, but contrary to prior professional background; • professional entrepreneurship; those choosing selfemployment to join professional partnerships and establish a professional practice; • family entrepreneurship; those choosing self-employment to join family businesses, some of which may be professional in nature;
Why become and entrepreneur • independence-seeking entrepreneurship; those actively attracte d to self-employment by a desire for independence, not associated with economic necessity;
• Lifestyle entrepreneurs; those, particularly women and younger people, who choose self-employment because it offers improved ability to balance work and family commitments, but not associated with economic necessity;
• reward-seeking entrepreneurship; those younger people voluntarily leaving paid employment to pursue actively financial reward and improved working conditions.
Choosing a product and a product • An existing good or service for an existing market
• Difficult approach for a start up operation due to high costs and uncertain profits
• A new good or service for a new market
• Riskiest strategy for a new firm coz product and market unknown
• A new good or service for an existing market
• Expanded to include modified goods/services
• An existing good or service for a new market
• Moderate risk which can be reduced through market research
Entry strategies for new ventures • Differentiation
• An attempt to separate the new company’s product or service from that of its competitors e.g. through improved operations, features, portability e.t.c
• Nice specification
• An attempt to provide a product or service that fulfills the needs of specific subset customers
• Innovation
• Pioneering or radical innovation embodies a technological breakthrough or new-to-the-world product. Incremental innovations are modifications on existing products
Qualities of a good business opportunity • Demand
• There must be significant demand for a product or service or a gap in the existing
• Return on investment
• Potential of a venture to bear fruit in a set of time and which cover the capital
• Availability of Resources
• Sufficient resources to take business opportunity before competitors
• Skills
• You need the right skill to tap into a business opportunity
• Scalability
• Ability to grow gradually over time and adapt to changing environments
• Health profit margin
• Does the business has substantial profit margin to guarantee sustainability while meeting the market gap
• Customer retention
• Keeping customers buying from you as long as possible
Enterprise success factors • Get your service out of your head and down on paper.
• If you can’t quantify or document your service for repeatability and new employee training, you will kill yourself trying to grow the business.
• Start with a service you know and love.
• A successful services business, more than a product business, comes from a skill or insight that you have honed from experience. Now all you have to do is pass it to the many new members as you grow your team.
• Don’t let your service be viewed as a commodity.
• You need to highlight how your service is more innovative and of higher value to your target customers.
• Be a visible and available expert in your domain.
• Be accessible on social media, write a blog or articles for industry publications, and participate in conference panels and speaking engagements
• Recruit only the best people, with the right base skills
• Make sure they bring solid base skills, so your training can focus on the innovative and unique elements that your service brings to the arena.
• Practice being a good communicator.
• Make sure everyone understands your vision and values both employees and customers
• The customer experience is more than the service
• Make sure that every interaction with every customer is positive
Business plan components • Basic information
• People involved
• Product or service
• Marketing
• Production/delivery of your service
• Legal Issues
• Financial issues
• Other information
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