VIRGINIA CENTURIONE BRACELLI SCHOOL were established by successful teachers.
Cooks apply their
Daughters of Our Lady on Mount Calvary
Poctoy, Odiongan, Romblon
SY 2021-22
E N T R E P R N E U R S H I P
GRADE 12
MODULE 2
Lesson 2: SOURCES DF IDEAS FOR ENTREPRENEURIAL
VENTURES
OBJECTIVES:
1. Identify the various sources of ideas for entrepreneurial
ventures
2. Discuss alternative methods for generating ideas for a new
venture
3. Discus emerging trends that could be the source of new
venture ideas
A number of practicing entrepreneurs and business
coaches have identified a host of sources, from which we can
find business Ideas. These can be categorized into four major
sources: (a) from the product, (b) from the process(c) from the
person, and (d) from relationships.
Entrepreneurs can source their business ideas from
existing products or services. Many entrepreneurs have
introduced new products and services differentiating them from
those currently in the market. You can differentiate a product
by changing its shape, size, color, and contents. For example,
Lots'a Pizza introduced square pizzas, while Bibingkinitan
offered its smaller bite- size rice cakes. The traditional hopia,
which was made of mung beans, has been altered with the
introduction of other varieties of beans and root crops as by the
enterprising owners of Eng Bee Tin. More than just changing
the features of a product, successful entrepreneurs introduce
new products because of their dissatisfaction with those
available in the market. This is what Karl Ulrich called
annoyance-driven innovation.' For example, Grab got market
patronage in the Philippines because of the difficulties
encountered by commuters with current taxi services.
Business ideas can likewise arise from the process of
production and distribution. A firm selling pritchon, combined
the process of frying and roasting pork belly. Packaging goods
into sachets and small quantities expanded the market for
shampoos and even processed cheese. Reviving the traditional
way of baking pan de sal, and making it available throughout
the day established a market niche for Pan de Manila. Likewise,
3N Bakery became famous for its fried siopao, a deviation from
the traditional steamed pao. In targeting the needs of their
customers, Seven Eleven introduced a 24-hour retail service.
Similarly, Julie's Bakeshop launched ambulant selling of bread
by imitating ice cream and balut vendors.
When business ideas are sourced from the person, the
individual examines his/her interests, hobbies, skills, dreams,
and even his/her travels. Aside from providing ideas for
entrepreneurial venture, personal interests can sustain a
business venture at its initial stage of operation. Many small
firms producing handicrafts evolved from hobbies of owners.
Similarly, individuals who took interest in silk screen and iron-
on shirt printing have transformed their hobbies into business
enterprises.
In addition, skills learned from prior employment can
be a source of business ideas as shown in several studies. For
example, a number of preschools and other training institutions
popular recipes by establishing a carinderia or small restaurants
.Entrepreneurs who introduced milk tea and other drinks in the
Philippines drew these business ideas from their travels in
Taiwan. Many potential entrepreneurs attend exhibitions here
and abroad to get business ideas.
The last category of sources is from relations. Many
Filipino-Chinese individuals sourced their entrepreneurial ideas
from families and relatives. Children of Filipino-Chinese
businessmen are usually exposed to their family businesses at
an early age. Such exposure often leads, to entrepreneurial
inclinations in their adult years.
Friends and classmates can also be sources of business
ideas and partners. Some may start their business partnership
as teammates in school projects and eventually decide to put
up their businesses after graduation. One's neighborhood can
also provide ideas on what to produce. In a neighborhood
where provision of regular water is a problem, an enterprising
individual may start a water filtering station with free delivery
service. In the same way, busy students and young
professionals living in condominiums led to entrepreneurial
ventures that offered housecleaning and laundry services.
METHODS FOR GENERATING OR TESTING NEW IDEAS
There are several methods of generating business
ideas. We will classify them into logical thinking and creative
thinking.
GENERATING BUSINESS IDEAS THROUGH LOGICAL THINKING
Logical thinking refers to systematic and rational way
of providing an answer to a question. It is systematic since it
follows steps in responding to an inquiry. It is rational because it
adheres to the rules of logic in connecting the relationships of
variables and in making conclusions. Aside from its usefulness in
decision-making, logical thinking can also be utilized in the
development of a business idea. Some of the methods that use
systematic analysis in generating new ideas are statistical
analysis, market analysis, SWOT analys1s, and Delphi technique.
Statistical analysis raters to a systematic analysis of
data generated from a survey of individuals. Aside from giving
basic information on the population being studied, statistical
analysis can also be used for hypothesis testing on the
deterrence of the values of certain variables. Statistical analysis
can describe the trend in the demand for a particular product,
as well as show which key socioeconomic variables can
significantly influence the change in the demand for a product
elated to statistical analysis is market analysis, which is
undertaken to know the various factors that affect the demand
for a particular product or service. It can also determine how
certain socioeconomic and demographic groups ill react to the
introduction of a new commodity or a change in existing
products or services. This can be done through surveys,
interviews with key informants, and focus group discussions.
Since survey methods are very expensive and time consuming,
interviews of key informants that are knowledgeable of the
market are undertaken. Through focus group discussions, the
facilitator can elicit the same general trends that would likely
appear in a detailed questionnaire. The results from these
various methods of market analysis can be used by potential
entrepreneurs in introducing new products or differentiating an
existing commodity that are aligned with the preferences of
targeted consumers.
SWOT (strengths, weaknesses, opportunities, threats)
analysis is usually undertaken to describe the state of
competition within an industry. However, an understanding of
the strengths and weaknesses of firms, and the opportunities,
and threats that they face can also provide business ideas that
an entrepreneur can pursue.
Delphi technique on the other hand, is the systematic
way of generating ideas from a select group of individuals using
various rounds of consultations or sessions. In the first round,
the group is asked to list a number of responses to a given
question. Alter treating the data on the first round, the leading
responses are given back to the respondents in the next round.
The respondents are then asked to list a shorter number of
answers on the same question based on the leading responses
in the previous round. In succeeding rounds, the leading
responses are further listed and given to the respondents until
the final two or three answers are determined. For example,
the question can be "What are the emerging products in the
coming decade? he answers generated from the Delphi
technique can lead to the identification of potential products or
services.
GENERATING BUSINESS IDEAS THROUGH CREATIVE THINKING
New business ideas can also be generated through
various methods or exploring our creativity. As described in the
previous chapter, creativity refers to thought processes that do
not follow systematic or analytical procedures but looks at
things from different perspectives. It uses lateral thinking,
which connects ideas and reprocesses them to formulate new
ideas. More than rational thinking, creativity puts emphasis on
the role of imagination and inspiration. Some methods that use
creative thinking in identifying business ideas are
brainstorming, problem inventory analysis, free association
method, and checklist method, among others.
Brainstorming refers to an unstructured discussion of a
group to elicit ideas. Since the process is unstructured, the
facilitator and participants should entertain all ideas coming
from the participants, even those that are illogical and "out of
this world." After a fixed period of discussion, the various ideas
are processed and synthesized to come out with an answer to
the question posed at the start of the brainstorming session.
Problem 1nventory analysis 1s Similar to
brainstorming. It uses the group discussion method to elicit
ideas from participants. It is different from the usual
brainstorming because it is directed to identifying all possible
problems encountered with a specific product or service. After
identifying all the possible problems and issues with the
product or service, the participants are tasked to give
alternative solutions to the problems.
Free association method is another technique used in
discovering business ideas. It is a method that has been used in
psychology to elicit the unconscious thoughts of individuals by
expressing their thoughts associated with words and ideas given
by the therapist. It has several applications in different fields,
including business, since it can draw from participants ideas
that are associated or linked with a given idea or word. From
the process of association, the group can come out with an idea
or set of ideas that can be the basis for business ventures.
Related to free association method is the checklist
method. It is another creative way of obtaining business ideas
from target participants by listing all possibilities that ideas can
be connected to, reprocessed, and associated with. Through the
checklist method, participants in the discussion group can be
asked to list down all possible changes that can be made with
an existing product or service. A specific checklist method
developed by Alex Osborn is known as SCAMPER (Substitute,
Combine, Adapt, Magnify, Put to other use Eliminate, and
Rearrange). In this method, participants are presented with a
product or service or an idea and are asked to provide a
comprehensive list of how the product or service or idea can be
replaced, mixed, differentiated, enlarged, applied, removed,
and altered.
GENERATING BUSINESS IDEAS THROUGH TRENDS IN BUSINESS
ENVIRONMENT
The systematic methodologies and creative ways of
generating business ideas as discussed above are focused on
the product or service or idea. But there are other ways of
generating business ideas with focus on the business
environment. Some of the methodologies used include Porter's
Five Forces of competition, SWOT analysis, and environmental
scanning. These methods like market analysis, discussion, and
Delphi technique are in tense in the use of logical and
systematic analysis.
Based on the trends on the business environment an
entrepreneur can get business ideas from the bargaining
powers of its competitors and suppliers, major shifts in
government involvement in business, sociodemographic
changes, as well as technological developments. Given the
products and services offered by competitors, one possible
business idea is to lower the selling price. As we know from the
theory of demand, consumers are encouraged to demand more
of a product if its price is lower than its competitors. However,
this option may not be feasible in all cases, given that the firms
in an industry are faced with similar inputs and same prices.
Another alternative for the firm or potential
entrepreneur is to differentiate its product from existing
product lines in the industry. Product differentiation can alter
the shape, contents, and package of a product to create a brand
that would establish loyalty from its customers. Because of this
brand loyalty, even if the price of the differentiated product is
higher than the current product lines in the industry, there will
still be a significant number of customers that will purchase the
commodity .
The suppliers of major inputs can also provide business
ideas to potential entrepreneurs. The increase in the price of
raw materials for example, can put pressure on firms to seek
alternative types and sources of raw materials. For example, the
cost of printing packaging materials made the producer of
Safeguard to combine three bars into one packaging unit
instead of packing them individually. This practice has reduced
the price of packaging s0apssignificantly and has encouraged
volume sales. The abundance of water lilies along Pasig River
inspired entrepreneurs to produce mats, bags, and other
handicrafts made of water lilies. Similarly, after the eruption of
Mount Pinatubo in the 1990s many enterprising individuals
used the lava and mud from lahar to craft figurines and other
collectibles.
Changes in government regulations can also provide
impetus for new products or services. For example, the ban on
the use of plastic bags in many cities and municipalities served
as an opportunity for business opportunities to produce
ecological bags, paper bags, and other alternative packaging
containers that are environmentally friendly.
Sociodemographic changes including smaller homes
and living spaces can provide opportunities for producers of
consumer durables to produce smaller appliances and furniture
that can fit into small condominium units. Business
opportunities also abound in areas near condominiums
including food services, laundry services, cleaning services, and
repair services. Pollution in highly urbanized areas can
encourage manufacturers to make air conditioners that serve as
air purifiers as well.
Lesson 3: RECOGNIZING, ASSESSSING, AND EXPLOITING
OPPORTUNITIES
OBJECTIVES:
1. Explain the process of recognizing opportunities
2. Explain the important factors in opportunity recognition
3. Create an opportunity assessment plan
4. Discuss the different pathways to seizing opportunities
5. Explain the product planning and development process
Beyond knowing how entrepreneurial intentions and
ideas are made, there is a need to recognize and assess these
intentions and ideas as business opportunities. In this lesson we
will discuss the various stages in recognizing and assessing
opportunities and how these opportunities are translated into
entrepreneurial ventures, For these opportunities to be realized
as business ventures, the individual needs to commit resources
and should have to capacity to absorb the uncertainties of any
business undertaking.
OPPORTUNITY RECOGNITION PROCESS
Before we proceed with the process of recogn1zing
opportunities tor entrepreneurial ventures, we need to define
the concept of opportunity. According to Cambridge Dictionary,
an opportunity is a situation or occasion that makes it possible
to do something that you want to do. There are three elements
in this simple definition. First, you want to do something in this
case you want to establish your own business enterprise.
Second, there are conditions for the realization of the objective.
Third, you must make decisions or take action on these
conditions to realize your objective.
From a business perspective, an opportunity is an
exploitable set of circumstances with uncertain outcome
requiring a commitment of resources and involving exposure to
risk (www.businessdictionary.com). This definition not only
fulfills the three elements discussed above, but also provides
specific features of a business opportunity. It should be pointed
out that an opportunity will not automatically lead to a
realization of your objective. An opportunity can only be
considered as a possibility of realizing your objective since there
are elements of uncertainties in its realization. Thus, the
entrepreneur must take action to achieve his objectives. This
decision will require resources including time from the
individual and his acceptance of the risks because of
uncertainties.
Opportunity recognition often entails phases that
potential entrepreneurs take before introducing a product or
service to the market. The five stages of opportunity
recognition, according to Hills, Shrader, & Lumpkin (n.d.) are
summarized as follows:
Precondition. A preparatory stage, during which the individuals
assesses his knowledge of the market. His prior knowledge of
the market is extensively shaped by his educational
background. Aside from formal training, personal experiences
including travel, and previous employment can also provide the
individual with valuable information on the market that he
wants to enter.
Conception. This is the gestation phase, during which
entrepreneurial intentions and ideas are generated, using logic,
creative thinking, or information on the market that he wants to
enter both. Creativity is the capacity of the mind to reprocess
and recreate new ideas by connecting ideas from existing
products or services. For example, connecting ideas on the
various ways of creating bread can lead to a creative idea.
Visioning. This third stage provides the individual a hunch that
can serve as an opportunity for business. This comes about as
ideas become clearer and how the logic of connections leads
the individual to a new way of preparing bread can lead to a
creative idea.
In our previous example on connecting ideas, the preparation of
bread can lead us to an idea of toasted siopao, which takes off
from the classic steamed siopao.
Assessment. This stage involves the evaluation on whether the
idea can be realized or not. Aside from the resources needed
and technology to be used, the paramount question to the
individual is whether the idea can really be actualized. In our
stated example, the relevant question at this stage is whether
we can really toast siopao?
Realization. The last phase suggests the production of a
prototype. This is the stage when the mental construct or idea
is now felt in its tangible or physical form. Thus, the idea of
toasted siopao is produced by baking the dough with fillings
instead of steaming the traditional siopao.
FACTORS IN OPPORTUNITY RECOGNITION
A framework on recognizing opportunities crafted by Hisrich,
Peters, and Shepherd ( 2010), provided some of the key factors
in opportunity recognition. According to them a successful
recognition of business opportunities is influenced by three
major factors: (a) market awareness, (b) entrepreneurial
readiness, and (c) connections.
Market awareness (prior knowledge of the market)
refers to personal exposure to market and its components
including customers and suppliers Information on the market, in
turn, can be acquired from formal training Tools on market
analysis are usually learned from business training programs
and business education. Environmental scanning, for example,
can provide information about the market, customer needs,
and merging product lines.
Beyond formal training, experience can be a major
source of understanding the market. Your dissatisfaction with a
particular product can be part of your personal experience that
can push you to improve on the product. In the same manner,
your work experience can also provide a wealth of knowledge
about the market and its prospects.
Entrepreneurial readiness ( entrepreneurial alertness)
refers to a variety of features of an individual to start a business
venture. It covers all types of resources that the individual
possesses including financial, physical and human resources.
Aside from the resources that the individual can potentially
commit in the implementation of his potential enterprise,
readiness also includes the ability of the individual to take risks
aa manage uncertainties once the enterprise is operational.
entrepreneurial readiness not only has a direct impact on
opportunity recognition but it also has an indirect effect as it
interacts with previous knowledge on the market.
The last factor is connections (networks). Business
opportunity recognition is heightened when the individual has a
diversity of networks. Families and friends as well as business
associates can bring about opportunities that we can pursue.
OPPORTUNITY ASSESSMENT
Once an idea has been generated and an opportunity
has been recognized from it, there is need to assess whether
this opportunity is feasible to implement. Opportunity
assessment refers to the process of evaluating the likelihood
that the opportunity can be realized. Several studies found the
following elements in opportunity assessment: product, market,
cost, profitability, capital requirements, risks, and commitment.
Product or Service. A business opportunity is primarily the
potential of introducing a new product or service to the market.
This new product or service can be a result of various creative
ways of differentiating an existing product or service. Given
these considerations, the following questions need to be
answered as part of the assessment process: What is the unique
feature of the product or service? Why will the consumer
purchase this commodity? What need or want is the product or
service trying to fill? What. is the competitive edge of this
commodity compared with the existing products or services?
Market Opportunity. This element in the assessment process
refers to the appraisal of the characteristics of the market.
Included in the assessment process is the competitive
environment in the market. Is it easy to enter the market It
there are barriers to entry, can they be overcome? How strong
is the bargaining power of existing players in the market? How
different is the product or service that you want to introduce
compared to the existing products and services in the market?
What segment of the market is your product or service
targeting?
Costing and Pricing. A product which may be considered
valuable by consumers may not be affordable. Thus, the cost of
production as well as the unit price of the commodity is very
important in the assessment phase. Although there is a market
for expensive goods and services, the market however is very
limited. In such a case, the product should be highly
differentiated like Louis Vuitton bags that it can create a snob
effect on a select group of consumers. On the other hand,
consumer goods catering to the general public must be priced
appropriately because they have a lot of substitutes that serve
as competitors. The price of a product or service would depend
on the cost of raw materials and other factors of production.
Cheap and reliable raw materials and the employment of
inexpensive unskilled laborers can make your product
competitively priced.
Profitability. Part of the assessment process is the extent of
profitability of a product or service. The primary motivation of
venturing into business is to earn profit. Thus, a nonprofitable
business enterprise, however creative the business idea is, is
not worth pursuing. Profitability is based on how the market
will receive your product and the cost of producing it. There are
business ventures that are very profitable but will require huge
capital and long gestation period. A starting entrepreneur with
limited resources may not be able to pursue this option even if
the rate of profit is very high. On the other hand there are
projects with limited resource requirements and give earnings
immediately but their returns are not as attractive.
Resource Requirements. In any business venture you will need
inputs in the production process. There are two types of inputs
used in production, intermediate inputs and factor inputs.
Intermediate inputs are also called raw materials that need
further processing. Aside from cost, the concerns on raw
materials are on their availability, accessibility, and reliability.
Factor inputs, on the other hand, are called the processing
include labor, capital, and technology. Since factor inputs will
remain with the firm for some time, unlike raw materials that to
be acquired regularly, the main concerns on factor inputs are on
their productivity and costs.
RISKS. Any business enterprise will face risks in the course or
Its operations. Risks are uncertain situations that can increase
probability of loss or failure of a business venture. Risks can
come from within (internal risks) and from outside (external
risks) Internal risks, which emanate from the management of
resources, can be prepared and controlled. While external risks,
which arise from various environments affecting business, can
be managed. If the potential business venture will just face
normal business risks, the business venture can be pursued.
However, very risky business ventures may not be suitable for
beginning entrepreneurs.
Entrepreneurial commitment. The last element in the process
of entrepreneurial assessment relates to the commitment of
the individual to pursue the realization of its business idea.
Commitment may include the motivations of the individual, his
skills, experience, resources, and the amount of time he can
devote in the operation of the business. The seriousness of the
individual can define his commitment and can proceed with the
introduction of product or service.
PRODUCT PLANNING AND DEVELOPMENT PROCESS
This section summarizes the development process of a
product from its conception, introduction in the market, and
final decline. Hisrich, Peters, and Shepherd (2010), identified
the various stages that a product or service undergo in its
product life. It takes two main phases, pre- commercialization
phase and the commercialization phase.
The Pre commercialization Phase Consists of Four Stages
Idea stage. This refers to the formation of business ideas. It
starts with entrepreneurial intent and proceeds with the
development of a business idea using ot logic and creativity.
Concept stage. The refinement of ideas and visualization of an
idea that can serve as business opportunity is called the concept
stage. The initial customer evaluation also happens during this
stage. Feasibility study or market study is used to determine if
there is a demand for the product or service.
Product development stage. After the visualization of the idea
the business idea is concretized with the production of a
prototype.
Test marketing stage. At this phase the product or service is
introduced in the market after a series of evaluation and
feedback from potential customers.
Once the pre-commercialization phase has ended, the
commercialization phase follows. This phase is also referred to
as the product life cycle. According to the Vernon, product life
cycle hypothesis, any product has life and similar to any living
organism it has its birth and its consequent death. Thus, a
product is introduced in the market as an innovative product
and exits the market with the emergence of other newer
innovative products. The various stages of the product life cycle
are summarized as follows:
Introduction. With a positive feedback after a series of market
testing. The product is formally introduced in the market. At
this stage, the entrepreneur has to devote resources and time
for the marketing of the product. Hopefully, the innovativeness
of the product, its uniqueness, and the human want it tries to
answer can stimulate demand.
Growth. With a successful marketing campaign, the product is
recognized by the market. This market recognition is translated
into a decision to purchase the product. There is growth if there
are repeat stage purchases or sustained demand from the initial
and subsequent buyers. Aside from marketing cost, the
entrepreneur should make sure that the raw materials are
readily available as well as the factor inputs to produce and
supply the growing market.
Maturity. At this stage the product is widely accepted with the
emergence of brand loyalty and patronage from its target
market. The product is considered the leading brand in a
particular market with a considerable market share. To stay on
top, the entrepreneur must engage in innovative activities to
improve and further differentiate the product.
Decline. Once the market for the product has been saturated
and innovation possibilities for it have been fully explored, the
product may start to lose its market power. The decline
becomes real when competitive products with newer
innovations and creative differentiations are introduced and get
accepted by the market.
ADDITIONAL NOTES
TYPES OF START-UP IDEAS
The three basic types of ideas from which most
startups are launched: ideas to enter new markets, ideas based
on new technologies, and ideas that offer new benefits. Each of
these has its own unique features. Numerous startups develop
from new market ideas-that is, those concerned with providing
customers with a product or service that does not exist in a
particular market but does exists somewhere else. Randall
Rothenberg, an author and the director of intellectual capital at
the consulting firm Booz Allen Hamilton, says that this type of
startup idea may have the greatest potential: "There's ample
evidence that some of the biggest businesses are built by taking
existing ideas and applying them in a new context. Because it
has so much potential, this angle on new venture ideas should
not be overlooked.
Other startups are based on new technology ideas,
which involve new or relatively new knowledge breakthroughs.
This type of business can be high risk because there is usually
no definite model of success to follow, but it can also offer
tremendous promise. You should pay especially close
attention to the fundamental features of a well- conceived new
venture of this type. For starters, the technology involved
would need to be unique, better than others currently available,
feasible to implement, and focused on a market need that is
deep enough to generate sufficient sales. Also,
the founders would need to have the knowledge, skills,
resources, and connections necessary to build a profitable
company around the new technology.
Because of the complexities involved with new
technology businesses,it often becomes necessary for
entrepreneurs to pivot at some point after startup. This refers
to fundamentally refocusing the startup as it unfolds or
completely recreating it if the initial concept turns out to be
seriously flawed. According to Kevin Systrom, cofounder of
Instagram, the idea behind the pivot is to "try out new ideas,
shed them quickly if they don’t catch on, and move on to the
next new thing" In other words, if the initial idea turns out to be
unsound, it is best to fail fast and fail cheap. New benefit ideas-
those based on offering customers benefits from new and
improved products or better ways of performing old functions
account tor a large number of startups. Consider Nicky Bronner,
the 15-year-old founder of Unreal Brands, Inc. To satisfy his
sweet tooth without wrecking his health, he set out to "unjunk"
snacks by creating and selling his own version of M&Ms,
Snickers, Reeses, and other popular candies that are still as
tasty but are made of far more wholesome ingredients. Bronner
now has contracts to sell his products in Target, Kroger, and
other high- profile retailers, so it appears that focusing on new
benefits can sometimes lead to really sweet business ideas. 2-
1b Common Sources of Startup ldeas Several studies have
identified sources of ideas for small business startups. Exhibit
2.2 shows the results of one such study by the National
Federation of Independent Business (NFIB), which found that
prior work experience accounted for 45 percent of new ideas.
However, there are other important sources. As indicated in the
exhibit, the NFIB study found that personal interests and
hobbies represented 16 percent of the total, and chance
happenings accounted for 11 percent. Ideas for a startup can
come from anywhere, but for now we will focus on three
possible sources: personal/work experience, hobbies and
personal interests, and accidental discovery.
PERSONAL/WORK EXPERTENGE
One or the primary sources of start up ideas is
personal experience. Often knowledge gleaned from the
present or former job allows a person to see possibilities for
modifying an existing product, improving a service, becoming a
supplier that meets employer's needs better than current
vendors, or duplicating a business concept in a different
location. Or personal contacts (your network) may include
suppliers that are interested in working with you or customers
whose needs are not currently being met. Startup concepts may
even result from trying personal circumstances or misfortunes,
especially when the entrepreneur can use work experience or
technical skills to address the challenge at hand. Regardless of
the situation, these insights may lead you to an opportunity
with tremendous potential.
That's how it worked for Adrienne Kallweit, whose
attempts to find a suitable babysitter for her young child proved
to be more challenging than she had expected. From this
experience-which reflects a very real need for so many young
couples who need safe and reliable child care- Kallweit decided
to launch Seeking Sitters, which provides "an on-demand
babysitter referral service." Apparently, Kallweit's experience
was a great predictor of opportunity, because the company has
been expanding rapidly since it was launched.
HOBBIES AND PERSONAL INTERESTS
Sometimes, hobbies grow beyond being leisure
activities to become businesses, and they can add surprising
energy to the startup process. For instance, people who love
skiing might start a ski equipment rental operation as a way to
make income from an activity that they enjoy. Or think about
Mark Zuckerberg when he started Facebook. He didn't intend
for the venture to grow it into the massive company that it is
today; rather, he just "liked having it be this hobby and getting
people around [him excited. But in time, he recognized the
business potential of the concept, and you know now that his
instincts turned out to be right on the money! While we don't
expect all or even most small businesses to grow into life-
changing technology giants, Facebooks story proves that fun
side projects can sometimes grow into significant new
companies with serious profit potential.

ACCIDENTAL DISCOVERY Another source of new startup ideas-

accidental discovery -involves something called serendipity, a
facility for making desirable discoveries by accident. Awareness
obviously plays a role here, but anyone may stumble across a
useful idea in the course of day-to- day living. That is exactly
what happened to a 28-year-old struggling artist in Los Angeles,
Simone Gonzales, who came across some interesting fabric and
decided to see what she could do with it. "After playing with the
thick, mummy-like elastic bands and shaping them into a simple
tube skirt—no zipper, hem, or serious tailoring required-
Gonzales realized she may be onto something. She decided to
make a few skirts from it, which she sold at a friend’s boutique.
From that small start, Gonzales got enough traction to launch
her company, Pleasure Doing Business, Within a few years,
things really started to take off, showing that promising
business ideas sometimes just happen-even when you're not
really looking for them.

OTHER IDEA LEADS If the sources of startup ideas just discussed

do no reveal the specific entrepreneurial opportunity that is
right for you, examine the following methods, which have been
useful to many entrepreneurs:
 Tap personal contacts with potential customers and suppliers,
professors, patent attorneys, former or current employees or
co-workers, venture capitalists, and chambers of commerce.

 Visit trade shows, production facilities, universities and

research institutes, and successful entrepreneurs (in other
markets) who are doing what you want to do.

 Observe trends, such as those related to material limitations

and energy shortages, emerging technologies, recreational
practices, fads, pollution problems, personal security needs,
and social movements.

 Pay close attention to all forms of change, including shifts in

specific industries and markets, demographic swings, and
emerging discoveries or scientific breakthroughs.

 Read trade publications, bankruptcy announcements, and

profiles on entrepreneurs and various business opportunities
in Inc., My Business, and other periodicals.

Search the Internet, where you can find an unlimited supply

of information on the startup process and even specific
opportunities. For example, Entrepreneur magazine
(www.entrepreneur.com) offers such online tools as the
Business Idea Center, which profiles business ideas that can
be browsed by category, interest, profession, startup costs,
and other criteria.

Module 2 entrepACTIVITIES
NAME:
A. TRUE OR FALSE
_______1. Skills learned from prior employment can be a
source of business ideas.
_______2. Exposure to businesses of friends and relatives
often leads, to entrepreneurial inclinations. in their
adult years.
_______3. Entrepreneurs are not allowed to source business
ideas from existing products or services.
_______4. Differentiating a product means changing its shape,
size, color, and contents.
_______5. Making the usual milk tea into a frozen a frozen for
is one way to differentiate a product.
_______6. More than just changing the features of a product
entrepreneurs introduce new products because of
their dissatisfaction with those available in the
market.
_______7. According to Karl Ulrich called annoyance-driven
innovation is creating a product or service out of
dissatisfaction.
_______8. Business ideas can likewise arise from changing the
process of production.
_______9. Changing the process or manner of distribution is
not a good idea for start-up business.
_______10. Repacking the usual product in large quantity is a
feasible business ide and this means changing the
process of distribution.
_______11. Interests, hobbies, skills, dreams, and even his/her
travels are sources of business ideas for
entrepreneurial ventures.
B. COMPLETE EACH SENTENCE WITH THE CORRECT WORD/
TECHNICAL TER.
GENERATING BUSINESS IDEAS THROUGH LOGICAL THINKING
1. ______________________ refers to systematic and
rational way of providing an answer to a question.
2. Logical thinking is systematic since it follows
_______________in responding to an inquiry.
3. Logical thinking is __________________ because it adheres
to the rules of logic in making conclusions.
4. __________________________ refers to a systematic
analysis of data generated from a survey of individuals.
5. The results from these various methods of market analysis
can be used by potential entrepreneurs in introducing
__________________________ or differentiating an
existing commodity.
6. ____________________analysis is usually undertaken to
describe the state of competition within an industry.
7. __________________________is the systematic way of
generating ideas from a select group of individuals using
various rounds of consultations or sessions.
GENERATING BUSINESS IDEAS THROUGH CREATIVE THINKING
8. ___________________ refers to an unstructured
discussion of a group to elicit ideas. Since the process is
unstructured, the facilitator and participants should
entertain all ideas coming from the participants, even those
that are illogical and "out of this world."
9. ____________________ is similar to brainstorming. It uses
the group discussion method to elicit ideas from
participants.
10. Problem inventory analysis is different from the usual
brainstorming because it is directed to identifying all
possible problems encountered with a
____________________ product or service.
11. Related to free association method is the
___________________ method.
12. _____________________ is another creative way of
obtaining business ideas from target participants by listing
all possibilities that ideas can be connected to,
reprocessed, and associated with.
13. A specific checklist method developed by Alex Osborn is
known as SCAMPER which means
________________________________________________
_______________________________
C. Give two sample situations for each trend in business
environment that could GENERATE BUSINESS IDEAS.
Bargaining powers of its competitors and suppliers
____________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________
Major shifts in government involvement in business
____________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________
Sociodemographic changes
____________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________
Technological developments.
___________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________
_
D. Identify which of the five stages of opportunity recognition,
according to Hills, Shrader, & Lumpkin is shown in the
situation.
_______________________ 1. Ariel took Baking classes in
TESDA. He also works as crew at PIZZA DOS.
_______________________ 2. Nikko has that intention of
putting up his own pizza parlor that offers unique pizza.
_______________________ 3. Domz feels that it is a good
opportunity since he sees that a lot of people in the community
loves pizza. And to capture even the younger ones, he thinks of
using crust in in different forms (polygons, animal forms and
others.
_______________________ 4. Raiven tried to make pizza
crust in different forms. Angelo made fillings/ topping more
colorful and artful. He was able to make a pizza in different
shapes.
_______________________ 5. Amafe really evaluated if
the idea can be put to reality. He looked for different molders
that he can use.

E. Give two sample questions for each element in opportunity

assessment: product, market, cost, profitability, capital
requirements, risks, and commitment. Choose your sample
business venture.
F.
Business Venture : PIZZA PARLOR
PRODUCT: What makes the product different from the other
pizzas around?

MARKET : Will both the young and old customers patronize the
pizza?

G. COMPLETE THE PRODUCT PLANNING AND DEVELOPMENT

PROCESS

IDEA STAGE

DECLINE

H. Choose a successful Filipino entrepreneur and search

his/ her profile in the Internet. Based on the write up
on him/ her cite examples on how the role of
connections, market awareness and entrepreneurial
awareness and readiness contributed to his ability to
seize business opportunities. (SHORT COUPON BOND).

I. Search for one business venture which is a result of

accidental discovery. Tell a very short history of the
business. (SHORT COIPON BOND)

REMINDERS:

1. ONLY THE LAST TWO PAGES ( ACTIVITIES) OF THE

MODULES WILL BE SUBMITTED. DO NOT INCLUDE
THE OTHER PAGES WITH DISCUSSION.

2. OTHER ACTIVITIES WILL BE POSTED IN THE FB

GROUP.