CHAPTER TWO

BUSINESS IDEAS AND

OPPORTUNITIES

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2.1 CONCEPT OF BUSINESS IDEAS AND OPPORTUNITIES

WHAT IS BASIC BUSINESS IDEA?

• Business Idea: is a concept that can be used
for financial gain that is usually centered on a
product or service that can be offered for
money.

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 Cont’d………………..

• Your business idea will tell you;

• Which need your business will fulfill for its
customers.
• What product or service your business will
sell.
• Who your business will sell to.
• How your business is going to sell its products
or services.
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2.2 GENERATING BUSINESS IDEAS

• Business ideas are identified through positive,

creative thinking.
• They can come from different sources such as
ideas built on local resources, local needs,
local activities, interests and hobbies.

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 Cont’d………………..

• Some of the major/ broader sources of

business ideas:
• Personal interest and hobbies
• Entrepreneur's work experiences, knowledge
and skills
• Assessing the existing product and market
gaps

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 Cont’d………………..
• Many small jobs you do around your home can
be ideas for starting a business, for example
growing vegetables, cooking, looking after
children, dancing, fixing watches or machines,
washing clothes, sewing etc.

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03-Nov-18 ASTU, Entrepreneurship for Engineers, Ch-2
 Cont’d………………..

• Your interests and hobbies can give you ideas

of a new business. Telling stories, drawing
pictures, fishing, listening to music, playing
football, baking cakes are all hobbies that can
be turned into business ideas.

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 Remark:

• In entrepreneurship what is important is not

unique idea generation …….
• What is important is developing idea,
implementing it, and building successful
business.
• What is the prospective customer of your idea?
(very specific)

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03-Nov-18 ASTU, Entrepreneurship for Engineers, Ch-2
 Cont’d………………..

• The idea should match the market

• Make sure that the customers get better values
for their money than the existing business do.

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2.2.1 METHODS OF GENERATING IDEAS

• Even with a wide variety of sources available,

coming up with an idea to serve as the basis
for a new venture can still be a difficult
problem.

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 Cont’d………………..

1. Focus Groups:
• Focus group is groups of individuals providing
information in a structured format.

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 Cont’d………………..
2. Brainstorming: The brainstorming method
for generating new product ideas is based on the
fact that people can be stimulated to greater
creativity by meeting with others and
participating in organized group experience.
3. Reverse Brainstorming -Reverse
brainstorming is similar to brainstorming, except
that criticism is allowed.

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 Cont’d………………..
4. Problem Inventory Analysis: Problem
inventory analysis uses individuals in a manner
that is analogous to focus groups to generate new
product ideas.
5. Creative problem solving: Creative problem
solving is a method for obtaining new ideas
focusing on the parameters.

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 Cont’d………………..
6. Scientific Method -The scientific method,
widely used in various fields of inquiry, consists
of principles and processes, conducting
observations and experiments, and validating the
hypothesis.
7. Value Analysis -The value analysis technique
develops methods for maximizing value to the
entrepreneur and the new venture.

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2.2.2 THE CRITERIA TO EVALUATE THE IDEA

• Easiness to implement
• Originality (mere imitation vs. improved…)
• User-friendliness
• Customer acceptance
• Easiness to finance the idea
• Profit potential (5% to 15%)
• Patent protection possibility ( if innovation,
brand, …)
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2.3 IDENTIFICATION OF BUSINESS OPPORTUNITY

• An opportunity is a favorable set of

circumstances that creates a need for a new
product, service or business.
• It includes access to credit, working premises,
education, trainings etc.

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2.3.1 SUGGESTED WAYS TO IDENTIFY OPPORTUNITY

I. Observing trends : it is imperative to check

the trends in the following:
Economic trends (state of the economy)
Political and regulatory change (where are the
government priorities , incentives)
Technological force/trends (new technology;
new use of old technologies)
Social forces (social and cultural trends)

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 Cont’d………………..
II. Solving problems
• Greater opportunities reside in solving greater
and perplexing problems through offering
innovative solutions.
III. Finding gaps in the market place
• It is always imperative to look for gaps in the
market

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 Qualities of an opportunity

Attractive Timely

Opportunity
(Rather than
an idea)

Anchored in a
product or business
Durable that creates or adds
value for its buyer/
end-user
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2.3.2 EVALUATION OF BUSINESS OPPORTUNITY

• Evaluation of business opportunity may

covers:
Market size should be greater than supply
Market growth potential
Distribution with high margin potential

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 2.4 AVENUES OF BUSINESS OPPORTUNITIES

• Starting a new venture entails looking for

brand new product or existing product with
improved performance, price, distribution,
quality or service.

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 What major ways are available to start a new
business?

1. Creating new venture from scratch

2. Acquisition of the existing business
3. Franchising and purchase of business models,
concepts, patents.
• A franchise is a way to buy a business in the
name of another company.

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2.5 FEASIBILITY ANALYSIS

• It is the process of determining whether the

business idea/opportunity is feasible.
• It requires asking; is the proposed business
venture worth spending (time, resource,
efforts and energy).

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 Components of feasibility analysis
I. Product or service feasibility
• Concept statement
• An idea / opportunity should pass the concept
test stage.
• Concept statement shows a preliminary
description of a product or service.
• Concept statement helps to solicit feedback
from prospective customers; industry experts
& other technical expertise.
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 Cont’d………………..
II. Industry/target market Feasibility analysis
• Industry is a group of firms producing similar
product or service
III. Organizational feasibility analysis
• It is whether the proposed business has:
Sufficient management expertise
The necessary organizational competence
Resources to successfully launch its
product/service
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03-Nov-18
 Cont’d………………..
IV. Financial feasibility analysis
• The most important considerations at this
stage:
• Total start up cash needed
• Examination of financial performance of
similar business.
• The overall financial attractiveness of the
proposed venture.

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 End of chapter 2

Thank you!!!

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