Unit 3: Creative Process for Business Ideas

Idea Generation:
- Entrepreneurs need ideas to start and to grow their
entrepreneurial ventures.
- Generating ideas is an innovative and creative
process.
- Idea generation can be possible through the vision,
insight, observation, experience, education, training,
exposure of the entrepreneurs.
- Idea generation is related with product selection and
project identification.
- Ideas can be generated through environmental
scanning and market survey.
- It is the function of the entrepreneur to generate
ideas for the purpose of selecting the best business
opportunities.
- Ideas can be:
a) Promising Ideas: which will be implemented
(converted into actions)
b) Marginal Ideas: preserved for future (for future
use)
 c) Rejected Ideas: which are thrown away or
dropped.

Identifying and Recognizing Opportunities/ Creative

Process
- Business opportunities are favourable conditions/
situations created by external environmental forces.
Business opportunity identification consists of three
steps:
1) Identifying Sources of New Idea Generation
2) Determining Techniques for Generating New Ideas
3) Selection of Best Idea

1. Identifying Sources of New Idea Generation:

Entrepreneur can generate new ideas from many
sources such as situation survey, present work
environment, consumer, existing companies,
distribution channels, research & development etc.
 2. Determining Techniques for Generating New
Ideas: The methods can be brainstorming, focus
group, problem inventory analysis, checklist
method, value analysis, morphological analysis etc.

3. Selection of Best Idea: It involves the selection of

best idea after evaluating them through
opportunity analysis.

Sources of New Idea Generation

i) Situational Survey: Situational survey is the analysis
of external environmental factors.
- The changes in the external environmental factors are
surveyed.
- It includes following:
a. Political-legal changes: Describe political-legal
environment, components and effect of political-legal
environmental forces
b. Economic Changes: Economic factors
c. Socio-cultural Changes: Socio-cultural factors
d. Technological Changes: Technological factors
ii) Present Work Environment: The present work
environment of entrepreneurs can be sources of new
ideas, they are as follows:
a.Entrepreneur’s vision, mission, objectives, strategies &
priorities provide business ideas for stating new
venture.
b. Entrepreneur’s effort to solve problem or identifying
opportunities also provides new ideas.
c. Entrepreneur’s experience, hobby & interest also
provide new business ideas.
d. Entrepreneur’s creativity can also be taken as sources
of generating new ideas.

ii) Consumers: The needs, wants, desires & expectation

of consumers/ customers can be taken as major source
of generating new business ideas.
- Entrepreneurs need to monitor & identify ultimate
needs of the customers.
iii) Existing Companies: The product & services of
companies can be a source of new ideas.
- The features, quality, customer preference, raw
materials used, technology used by existing
companies provide ideas for new product.

iv) Distribution Channels: Distribution channel refers

wholesaler, retailer, and agent. Members of distribution
channels are useful sources of new business ideas.
- They have the informations about both customers
and competitors.
- They also know about market conditions and familiar
with the needs of the market.

v) Outside Sources: The outside consultant and experts

can be the sources of generating new business ideas
-New business ideas also can be generated by collecting
news form television, newspaper, magazines, and
internet
 - National & international trade fairs and exhibitions
also provide excellent opportunity to know about new
product and new development so it can be taken as
sources of new ideas.

vi) Suggestions: Suggestions from friends, family,

relatives can also help to generate new business ideas.

vii) Research & Development: Scientists and technologist

working in different research and development activities
are also important source of new product idea.

- Their continuous search for new scientific knowledge

may provide base for generating new ideas.
Techniques/ Methods of Generating New Ideas
1. Brainstorming: Brainstorming is a group method for
obtaining new ideas & solutions.
- A group of people meets together to generate ideas
with focus on specific product or market area.
- The greater number of ideas is generated and
criticism is not allowed. (no negative comments on
ideas generated)
- Reverse Brainstorming: It is also group method for
obtaining new ideas focusing on negative, criticism is
allowed. The ways are found to overcome the problems.
It stimulates innovative thinking.

2.Focus Group: The group of individuals provides ideas

in a structured format.
-A moderator/ co-ordinator leads the group through
open, in-depth discussion with group members.
-The group consists of 8 to 14 participants, they are
encouraged (stimulated) to develop new ideas by
comment from other group members.
3. Problem Inventory Analysis: It is the method for obtaining
new ideas and solution by focusing on problems. The
consumers are provided with a list of problems and then
asked to have discussion over it ultimately result in an
entirely new product idea.
4. Checklist Method: IT is the method in which new deas are
developed through a list of questions or statements on
order to generate new ideas.
5. Big Thinking Approach: In this method, the entrepreneur
dream about the problem and its solutions. In other words,
thinking big. Every possibility should be recorded and
investigated.
6. Scientific Method: This method is widely used for
identifying new idea. It consists of process,
experimentation, observation, analysis and validating
hypothesis. This method involves defining the problem,
analyzing the problem, gathering and analysis of data
developing and testing potential solutions and choosing the
best solution.
7. Forced Relationship: In this method, new ideas are
developed by looking at production combination (process).
 8. Morphological Analysis: This method involves a detailed
structural analysis if the various dimension (aspect) of need
or problem.
Selection of best Idea
 Evaluation of Idea
 Profit test
 Constraint test
 Risk test
Ensuring & protecting Ideas:
1. Communicate Importance of creativity: Organization
should create innovation and creativity supporting culture
and environment. The employee should be ensured that
ideas are welcomed and recognized.
2. Facilitates Brainstorming: Enough time should be provided
in order to generate new ideas. Time should be managed
and provided for brain storming.
3. Searching Ideas: An organization should actively seek ideas
in order to encourage innovation and creativity, suggestion
box, ideas bank should be maintained.
4. Supporting Environment: An organization must be
supportive towards regarding new idea generation.
 5. Avoiding Mistakes: In order to encourage creativity,
mistakes should be tolerated to certain extent, this allows
people to learn from their mistakes.
6. Reward creativity: In order to encourage creativity and
ideas generation, employee should be rewarded for new
idea generation. Reward motivates employee to come up
with new idea.
7. Implementation of ideas: Ideas should be converted into
action, otherwise ideas remains on paper or mind.
8. Provide opportunity to grow: In order to encourage
creativity and new ideas, individual employee should be
encouraged to face challenges and grow according to their
talent.
Protecting Ideas
Ideas, creativity, innovation are regarded as intellectual
property. Intellectual property can be protected through
patent, copy right, trademarks, trade secrets etc.
i. Putting Ideas into tangible form: Ideas are generated from
human after brainstorming. They should be converted into
tangible form by storing them in files, logbook or computer
hard disk.
 ii. Securing the ideas: The ideas recorded in logbook or
computer should be secured.
iii. Intellectual property Rights: The generated ideas cab ne
secured through intellectual property right (patent,
copyright) so that ideas cannot be used and copied by
unauthorized person.
Personal characteristics of entrepreneur for idea
generation/analysis
i. Prior Experience: Prior experience in rated sector helps
entrepreneurs to recognize opportunities in the market
and generating ideas. Prior experience helps to build social
network and contact which may provide insight that lead
to opportunities.
ii. Cognitive factors: Cognitive factor is related with
knowledge, learning, intellectual capacity, insight etc.
Opportunity recognition may be an innate or natural skills
considered as cognitive process. Cognitive factors provides
entrepreneurial awareness which is also act as "sixth
sense" that allows entrepreneurs to see opportunities.
iii. Social Network: Social networks, refers social and
professional contact of an entrepreneur such as friend,
relatives, peers, group, consultant etc.
 The extent and depth of an individual social network
affects opportunity recognition. Larger the social network,
higher the possibility of opportunity recognition and idea
generation.
iv. Creativity: Creativity is the process of generating a novel or
useful ideas. Creative entrepreneur are able to seek
opportunities and generating ideas.