Entrepreneurial creativity is the ability to develop new ideas and solutions to

problems. It is the ability to see into the future and generate ideas, solutions
and innovations before they are needed. It is the ability to solve your customer's or
client's problems before they even realize the problem exists.

How To Use Entrepreneurial Creativity For Innovation

An innovative entrepreneur identifies opportunities and creates value for their

customers or clients. But innovation requires creativity; learn how these two traits go
hand in hand.

Innovation is fundamental in the development of a successful business. Innovation

is taking an idea and turning it into something valuable and relevant. Creativity is
the ability to see the world in new ways, find hidden patterns, make connections
between seemingly disparate things and generate new ideas. Innovation often
drives creativity, but creativity does not always lead to innovation.

A creative and innovative entrepreneur can identify opportunities and create new
value for their customers or clients. To be a creative and visionary entrepreneur,
you must have the proper mindset.

This article will define that mindset and understand how to develop it.

What are entrepreneurial creativity and innovation?

Entrepreneurial creativity is the ability to develop new ideas and solutions to

problems. It is the ability to see into the future and generate ideas, solutions and
innovations before they are needed. It is the ability to solve your customer's or
client's problems before they even realize the problem exists.

Entrepreneurial innovation is the ability to turn an idea into reality. It is about

finding new ways to do things and making them better. Entrepreneurial innovation
is about creating new products or services, improving processes or finding new
markets for existing products or services.

Becoming a creative and innovative entrepreneur requires combining both

hemispheres of your brain. Creativity is a right-brain process, while innovation is a
 left-brain process. Therefore, you want to learn how to work with both
hemispheres of your brain and keep a balance between the two.

In today's day and age, we are accustomed and taught to use our left brain very
efficiently. However, our right brain, the key to innovation, is missing from our
curriculum. Entrepreneurship already requires you to be very efficient at using
your left brain. Learning to use your right brain more efficiently will enhance your
creativity, so you combine it with your innovations. Let's look at how you can be
more creative to become both a creative and innovative entrepreneur.

How to be more creative

There are a few key things that you can do to develop your entrepreneurial
creativity. To be creative, you need to have a mindset open to growth. Here are
some practices to be more creative:

1. Have a growth mindset. A growth mindset is a belief that your abilities and
intelligence can be developed through effort, good teaching and learning from
mistakes. This belief leads to a love of learning and a willingness to take risks.

2. Be open to new ideas. Being open to new and different ideas is a must for
innovation. So, be willing to experiment and try new things.

3. Practice creative thinking. To be creative, you need to be able to think outside

the box. You need to be able to see things in new ways and make connections
between seemingly disparate things. Practicing creative thinking regularly helps
you become a creative thinker.

4. Take risks. Yes, taking risks is vital to being creative and innovative, but don't
forget the importance of planning. A plan gives you a roadmap to follow and helps
ensure you take the proper steps to reach your goals.

5. Think outside the box. You also need to be able to think outside the box and
come up with new solutions to problems. Do not take the beaten path.
6. Be passionate about what you do. It shows in your work when you are passionate
about what you do. In addition, passion helps you think creatively and outside the
box, two main components of being an innovative entrepreneur.

7. Be willing to experiment. Try new things and see what works. Don't be afraid of
failing. Failure is a part of the creative process and can lead to new and better
ideas.

8. Practice freestyle writing regularly. Writing is a right-brain activity, especially

creative writing. It helps you access the information that your left brain cannot.

9. Engage in right-brain activities regularly. These activities include but are not
limited to drawing, painting, playing music, creating music, reading, singing,
games that require imagination, etc. These activities help you use your right brain,
making you more creative as you do these things often.

10.Last but not least, surround yourself with other creative and innovative
people. This will help to stimulate your thinking and give you new ideas to work
with.

Generation and screening of Project Ideas (Project Identification)

Generation of Ideas: Identifying suitable project ideas is the most important step in
the whole process of project preparation. The search for promising project ideas is
the first step towards establishing a successful venture. The key to success lies in
getting into the right business in the right time. The objective is to identify
investment opportunities which are feasible and promising.

Generation of an idea of producing a new product, new business, requires

imagination sensitivity to environmental changes and the realistic assessment of
what the firm can do? A project is not a product or commodity to be purchased. It
has a promise as well as a risk.

An idea regarding a required intervention in a specific area to address identified

problem is formed and developed. This idea is usually hatched through discussions
by specialists and local leaders in a community need based on issues and turned
into a proposal.

Generally project ideas are generated depending on:

• Consumer needs

• Market demand

• Resource availability

• Technology

• Natural calamity

• SWOT analysis

• Political considerations etc.,

The project idea selection is selection of project idea from available alternatives is
to be best suited to the entrepreneurs’ capacity, competence and willingness. The
project Selection includes

• Profitability

• Feasibility

• Resource-ability

• Acceptability

The basic criterion for selection of a project could be existence of a favorable cost-
benefit relationship.

People would like to select a project which requires a minimum investment, low
degree of competence, completed in the shortest time, and which has the highest
return potential.

A project idea should be SMART:

S – Specific objective

M – Measurable

A – Achievable

R – Realistic

T – Time bounded

Project identification: A search for promising project ideas could contribute

towards achieving specified development objectives. Project identification should
be an integral part of the Macro-planning exercise of the state with sectored
information and strategies as the main source of the ideas.

Generally ideas are formed from several sources based merely on some vested
interests of the individuals involved. However irrespective of their origin, project
ideas should be in general aim at overcoming constraints on the national
development effort.

Good project ideas are the key to success. Therefore a wide variety of sources
should be tapped to analyze them. To have a wide range of options, the sources of
project ideas can be categorized into two they are:

A. Micro level sources

B. Macro level sources

A] Micro level;

At micro level project ideas can be generated from various sources. Some of these
are discussed below.

1. Analysis of the performance of existing industries; A study of existing

industries in terms of their profitability utilization can indicate promoting
investment opportunities which are profitable and relatively risk free. An
examination of capacity utilization of various industries provides information
about the potential for further investments. Such study is more useful if it is done
region wise. Particularly for products which have high demand for consumption
and wide scope for production.
2. Examination of the input-outputs of various industries: The analysis of inputs
required for various industries may throw some project ideas. Opportunities exist
when {1] Materials, purchased parts, or supplies are presently procured from
distance sources with considerable time lag and transportation cost and [2] Several
firms produce internally some components parts which can be supplied at lower
cost by a single producer who can enjoy economics of scale. Similarly a study of
the output of the existing industries may reveal opportunities for adding value
through further processing of the main outputs, by produce, by products as well as
waste products.

3. Review of imports and exports; Analysis of import statistics for a period of five
to seven years is helpful in understanding the trend of imports of various goods and
the potential for import substitution. Indigenous manufacture of goods currently
imported is advantageous for several reasons. [1] It improves the balance of
payments situation. [2]It generates employment, and [3] it provides market for the
supporting industries and services. Likewise an examination of export statistics is
useful in learning about the export possibilities of various products.

4. Investigation of local materials and resources; A search for project ideas may
begin an investigation into local resources and skills. Various ways of adding value
to locally available materials may be examined. Similarly, the skills of local
artisans may suggest products that might be profitably produced and marketed.
Such assessment may consider issues such as the human and material resources,
Infrastructure facilities and market for various products.

5. Analysis of economic and social changes: A study of economic and social trends
is helpful in projecting demands for various goods and services. Changing
economic conditions and consumer preferences provide new businesses
opportunities. For example a greater awareness of the value of time is dawning on
public. Hence the demand for time saving products like prepared food items, ovens
and powered vehicles has been increasing. The other change that can be seen
during analysis is the increasing desire for the leisure and recreational activities.
This has caused a growth in the market for recreational products and services.

6. Study of new technological developments: New products are the new process
and technologies for existing products developed by the research laboratories may
be examined for profitable communication.

7. Exploring the possibility of reviving sick units: Industrials sickness is spread in

many countries. There are innumerable bossiness units which have been
characterized as sick. These units either closed are have reached the prospect of
closure. A significant proportion of sick units however can be nursed back to
health by sound management, fusion of further capital and provision of
complementary inputs. Hence there is a fairly good scope investment in this area.

8. Identification of unfulfilled psychological needs:

For well established multi brand product groups like bathing soaps, detergents,
cosmetics and tooth paste, the questions to be asked is not whether there is an
opportunity to manufacture them for satisfying an actual physical need, but
whether there are certain psychological needs of the consumers which are presently
unfulfilled.

9. Attending trade fairs:

National and international trade fairs provide an excellent opportunity to know

about new product and developments.

10. Stimulating creativity for generation’s new product lines:

New product ideas may be generated by thinking along the following lines:
Modifications, rearrangements, reversal, magnifications, reductions, substitutions,
adoptions and combinations.

B. At Macro level:

At macro level project ideas can be obtained from various sources as mentioned
below:

1. Project ideas from government policies and plan:

From time to time governments produce guidelines such as the national

development plans and session papers which spell out the directions the
government should take to achieve certain targets in various sectors of the
economy and guidelines to various organizations and individuals. The information
contained in these documents is useful in generating ideas for new projects for Ex:
If the government intends to start number of new schools in a given area then a
number of projects which of related to the establishment such schools would be
considered.

2. Project ideas from technical specifications:

For many industrial projects, ideas will usually tend to come from technical
specifications, which by virtue of their experience and for research findings will
give use full information which may lead to the manufacturing of new products or
improving the existing products.

3. Project ideas from local leaders:

For community and social projects, local leaders usually have important ideas,
which they together with their local people, have identified as being important in
improving the welfare of the people. In the case of social projects depending in
which one is to identify, there may be number of other projects which are linked to
the identified projects.

Ex: A project of constructing a dam for the generation of hydro electric power will
be giving suggestions for the start of irrigation projects, a fishing project and other
related projects.

4. Project ideas from Entrepreneurs:

For commercial and industrial projects, Entrepreneurship is an important source of

ideas. Entrepreneurships include the characteristics of preparation of managerial
competence and motivation to achieve results. Although entrepreneurship skills
have been passed on from one generation to another along Family and social-
economic circles, it has been recognized that programs for entrepreneurship
development will help individuals to come up with useful ideas which can be
translated into viable projects.

Monitoring the environment

Basically a promising investment idea enables a firm to exploit opportunities in the

environment by drawing on its competitive strengths. Hence the firm must
systematically monitor the environment and asses its competitive abilities. For
purposes of monitoring the business environment may be divided into six broad
sectors. They are as follows:

Economic Sector

• State of the economy

• Overall rate of growth

• Growth rate of primary, secondary, and territory sectors

• Cyclical fluctuations

• Linkage with the world economy

• Trade surplus/deficits balance of payment situation

Government Sector

• Industrial policy

• Government programs and projects

• Tax frame work

• Subsidies, incentives, and concessions

• Import and export policies

• Financing norms

• Lending conditions of financial institutions and commercial banks

Technological Sector

• Emergence of new technologies

• Access to technical know-how, foreign as well as local

• Receptiveness on the part of industry

Socio-demographic Sector

• Population trends

• Age shifts in population

• Income distribution

• Educational profile Employment of women

• Attitudes toward consumption and investment

Competition Sector

• Number of firms in the Industry

• Degree of homogeneity and differentiation among products

• Entry barriers

• Comparison with substitutes in terms of quality, price, appeal, and

functional performance

• Marketing policies and practices

Supplier Sector

• Availability and cost of raw materials

• Availability and cost of energy

Screening potentially promising project ideas

Once a list of project ideas has been put forward, the first step is select one or more
of them as potentially promising. This calls for quick preliminary screening by
experienced professionals who could also modify some of the proposals. At this
stage, the screening criteria are vague and rough, that becomes specific and refined
as project planning advances, during the preliminary screening to eliminate ideas,
which are not promising, and one is required to look into the following aspects

1. Compatibility with the promoter:

The idea must be compatible with the interest, personality, and resources of the
entrepreneur. It means [1] it should fit to the personality of the entrepreneur; [2] it
should be accessible to him and [3] it should offer him the prospect growth and
high return on the invested capital.

2. Consistency with government priorities:

The project idea must be feasible given the national goals and governments
regularity framework. The questions to be raised in this context are:
Is the project consistent with national goals and priorities?

Are there any environmental effects contrary to government regulation?

Can the foreign exchange requirements of the project be easily accommodated?

Will there be any difficulty in obtaining the license for the project?

3. Availability of inputs:

The resources and inputs required for the project must be reasonably assured. To
assess this, the following questions need to be answered.

Are capital requirements of the project within manageable limits?

Can the technical know- how required for the project be obtained?

Are the new materials required for the project available domestically at a
reasonable cost? If the materials have to imported, will there be problems?

Is the power supply for the project reasonably obtainable from external sources
and Captive power sources?

4. Adequacy of the market:

The size of the present market must offer the prospect of adequate sales volume.
Further there should be a potential for growth and reasonable return on investment.
To judge the adequacy of the market the following factors have to be examined;

• Total present domestic market

• Competitors and their market shares

• Exports markets

• Sales and distribution system

• Projected increase in consumption

• Barriers to the entry of new units

• Economic, Social and demographic trends favorable to increased
consumption

• Patent protection

5. Reasonableness of cost:

The cost structure of the proposed project must enable it to realize an acceptable
profit with a price. The following should be examined in this regard:

• Cost of material inputs

• Labor costs

• Factory overheads

• General administration expenses

• Selling and distribution cost

• Service cost

• Economies of scale

6. Acceptability of risk level:

The desirability of a project critically dependent on the risk characterizing in the

assessment of risk the following factors should be considered:

• Business cycles

• Technological changes

• Competition from substitute

• Competition from imports

• Government control over price and distribution

Therefore, during the preliminary selection, the analyst should eliminate project
proposals that

• Technically unsound and risky

• Have no market for the output

• Have inadequate supply of inputs

• Are very costly in relation to benefits and

• Assume over ambitious sales and profitability.

Feasibility AnalysisAs the name suggests, a feasibility analysis is designed to

assess whether your entrepreneurial endeavor is, in fact, feasible or possible. By
evaluating your management team, assessing the market for your concept,
estimating financial viability, and identifying potential pitfalls, you can make an
informed choice about the achievability of your entrepreneurial endeavor. A
feasibility analysis is largely numbers driven and can be far more in depth than
a business plan (discussed in The Business Plan). It ultimately tests the viability of
an idea, a project, or a new business. A feasibility study may become the basis for
the business plan, which outlines the action steps necessary to take a proposal from
ideation to realization. A feasibility study allows a business to address where and
how it will operate, its competition, possible hurdles, and the funding needed to
begin. The business plan then provides a framework that sets out a map for
following through and executing on the entrepreneurial vision.

Organizational Feasibility Analysis

Organizational feasibility aims to assess the prowess of management and

sufficiency of resources to bring a product or idea to market . The company should
evaluate the ability of its management team on areas of interest and execution.
Typical measures of management prowess include assessing the founders’ passion
for the business idea along with industry expertise, educational background, and
professional experience. Founders should be honest in their self-assessment of
ranking these areas.

Resource sufficiency pertains to nonfinancial resources that the venture will need
to move forward successfully and aims to assess whether an entrepreneur has a
sufficient amount of such resources. The organization should critically rank its
abilities in six to twelve types of such critical nonfinancial resources, such as
availability of office space, quality of the labor pool, possibility of obtaining
intellectual property protections (if applicable), willingness of high-quality
employees to join the company, and likelihood of forming favorable strategic
partnerships. If the analysis reveals that critical resources are lacking, the venture
may not be possible as currently planned.

Financial Feasibility Analysis

A financial analysis seeks to project revenue and expenses (forecasts come later in
the full business plan); project a financial narrative; and estimate project costs,
valuations, and cash flow projections.

The financial analysis may typically include these items:

 A twelve-month profit and loss projection

 A three- or four-year profit-and-loss projection
 A cash-flow projection
 A projected balance sheet
 A breakeven calculation

The financial analysis should estimate the sales or revenue that you expect the
business to generate. A number of different formulas and methods are available for
calculating sales estimates. You can use industry or association data to estimate the
sales of your potential new business. You can search for similar businesses in
similar locations to gauge how your business might perform compared with similar
performances by competitors. One commonly used equation for a sales model
multiplies the number of target customers by the average revenue per customer to
establish a sales projection:

T×A=ST×A=S
Target(ed) Customers/Users×Average Revenue per Customer=Sales
ProjectionTarget(ed) Customers/Users×Average Revenue per Customer=Sales
Projection

Another critical part of planning for new business owners is to understand

the breakeven point, which is the level of operations that results in exactly enough
revenue to cover costs (see Entrepreneurial Finance and Accounting for an in-
depth discussion on calculating breakeven points and the breakdown of cost types).
It yields neither a profit nor a loss. To calculate the breakeven point, you must first
understand the two types of costs: fixed and variable. Fixed costs are expenses that
do not vary based on the amount of sales. Rent is one example, but most of a
business’s other costs operate in this manner as well. While some costs vary from
month to month, costs are described as variable only if they will increase if the
company sells even one more item. Costs such as insurance, wages, and office
supplies are typically considered fixed costs. Variable costs fluctuate with the
level of sales revenue and include items such as raw materials, purchases to be
sold, and direct labor. With this information, you can calculate your breakeven
point—the sales level at which your business has neither a profit nor a
loss.47 Projections should be more than just numbers: include an explanation of the
underlying assumptions used to estimate the venture’s income and expenses.

Projected cash flow outlines preliminary expenses, operating expenses, and

reserves—in essence, how much you need before starting your company. You want
to determine when you expect to receive cash and when you have to write a check
for expenses. Your cash flow is designed to show if your working capital is
adequate. A balance sheet shows assets and liabilities, necessary for reporting and
financial management. When liabilities are subtracted from assets, the remainder is
owners’ equity. The financial concepts and statements introduced here are
discussed fully in Entrepreneurial Finance and Accounting.

Market Feasibility Analysis

A market analysis enables you to define competitors and quantify target

customers and/or users in the market within your chosen industry by analyzing the
overall interest in the product or service within the industry by its target market .
You can define a market in terms of size, structure, growth prospects, trends, and
sales potential. This information allows you to better position your company in
competing for market share. After you’ve determined the overall size of the
market, you can define your target market, which leads to a total available market
(TAM), that is, the number of potential users within your business’s sphere of
influence. This market can be segmented by geography, customer attributes, or
product-oriented segments. From the TAM, you can further distill the portion of
that target market that will be attracted to your business. This market segment is
known as a serviceable available market (SAM).
Projecting market share can be a subjective estimate, based not only on an analysis
of the market but also on pricing, promotional, and distribution strategies. As is the
case for revenue, you will have a number of different forecasts and tools available
at your disposal. Other items you may include in a market analysis are a complete
competitive review, historical market performance, changes to supply and demand,
and projected growth in demand over time.

Economic feasibility refers to the ability of a project or business venture to

generate enough revenue to cover its costs and provide a reasonable return
on investment. It involves analyzing the costs and benefits of a project, including
the costs of materials, labor, and equipment, as well as the projected revenue from
sales or other sources of income. Economic feasibility is an important
consideration when determining whether a project or venture should be
undertaken, and it is often used in conjunction with other types of feasibility
analysis, such as technical feasibility and operational feasibility.

Example of economic feasibility

An example of an economic feasibility assessment would be a company

considering launching a new product line. The company would conduct an analysis
to determine the costs of developing and producing the new products, as well as
the projected revenue from sales. They would also consider factors such as the size
of the market for the new products, the level of competition, and the target
audience.

The company would use this information to make a decision about whether to
launch the new product line. They would evaluate the costs of the project and
compare them to the projected revenue to determine whether the project is
economically feasible. They would also consider other factors such as the potential
risks and challenges, the overall market conditions, and the company's ability to
launch the new product line.

If the company determines that the new product line is economically feasible, they
would proceed with the launch. However, if the analysis indicates that the project
is not economically feasible, the company would likely decide not to proceed with
the launch.

This example is a simplified one, In real-world scenarios, it would involve more

detailed analysis and considerations, but it illustrates the main concept of economic
feasibility assessment, which is evaluating the costs and benefits of a project or
venture to determine whether it is economically viable.
Elements of economic feasibility assessment

Economic feasibility is a kind of cost-benefit analysis of the examined project,

which assesses whether it is possible to implement it. This term means the
assessment and analysis of a project's potential to support the decision-
making process by objectively and rationally identifying its strengths, weaknesses,
opportunities and risks associated with it, the resources that will be needed to
implement the project, and an assessment of its chances of success. It consists
of market analysis, economic analysis, technical and strategic analysis.

Market analysis

Market analysis plays an important role in the evaluation of economic feasibility

of a project or business venture. It involves gathering and analyzing data about the
market in which the project or venture will operate, including information about
the size and growth of the market, the current and projected demand for the
product or service, the competitive landscape, and the target audience.

This information can be used to make more informed decisions about the project or
venture, including decisions about pricing, marketing, and distribution. For
example, a market analysis might reveal that there is high demand for a particular
product or service, which would make it more economically feasible to launch the
project or venture. Similarly, a market analysis might reveal that there is a large
and growing market for a product or service, which would make it more likely that
the project or venture would generate enough revenue to cover its costs and
provide a reasonable return on investment.

Market analysis also helps to identify potential risks and challenges that may
impact the economic feasibility of a project or venture, such as intense
competition, regulatory changes, or changes in consumer behavior. By identifying
these risks and challenges early on, decision-makers can take steps to mitigate
them, thereby increasing the chances of success for the project or venture.

In summary, market analysis is an essential tool for evaluating the economic

feasibility of a project or business venture as it provides a comprehensive
understanding of the market behavior and trends, enabling to make rational
decisions, and assessing potential risks and opportunities.
Economic analysis

Economic analysis is a method of studying economic processes, which consists in

considering the relationships between the various elements of these processes.

It can be used both to study economic phenomena and processes occurring on a

scale of the whole economy (macroeconomic analysis), as well as phenomena and
processes occurring within particular economic units and institutions
(microeconomic analysis). Economic analysis makes it possible to make
diagnoses, facilitates decision making, as well as facilitates rationalization of
economic processes, both on a macro- and microeconomic scale. In economic
analysis, mathematical methods are widely applied (e.g. marginal calculus
and linear programming). Analysis is a way of scientific procedure, ordering and
dividing the whole into components. The aim of the analysis is to examine the
structure of the whole, to get to know the mechanism of connections between the
components.

Activities related to the assessment of the company's activity are the subject of
economic analysis. In the conditions of changing environment, technological and
scientific development, making decisions
concerning enterprise management requires fast and reliable information.
Therefore, economic analysis and the financial analysis included in it have become
particularly important. The economic analysis covers all economic phenomena
occurring within the company and in its surroundings. Investigating factors
involves dividing economic phenomena and processes into constituent elements,
determining the causal-impact relationship between the elements, and drawing
conclusions from the assessment.

Technical analysis

Technical analysis can be used as a tool to evaluate the economic feasibility of a

project or business venture, particularly in the context of financial markets. The
techniques of technical analysis are based on the analysis of historical price data,
and the goal is to use this information to predict future price movements and make
investment decisions. Technical analysis can be used to evaluate the economic
feasibility of a project or venture by assessing the potential return on investment
and the level of risk associated with the investment.

For example, if the technical analysis of a stock or commodity suggests that its
price is likely to increase in the future, it may be considered economically feasible
to invest in that stock or commodity. Conversely, if the technical analysis suggests
that the price is likely to decrease, it may be considered less economically feasible
to invest in that stock or commodity.

In addition to evaluating the economic feasibility of a specific investment,

technical analysis can also be used to evaluate the overall economic feasibility of a
project or venture by assessing the current and projected market conditions for
the industry or sector in which the project or venture will operate. For example, if
technical analysis suggests that a specific industry or sector is likely to experience
growth in the future, it may be considered more economically feasible to launch a
project or venture in that industry or sector.

It's worth mentioning that Technical analysis is just one of the methods used
for forecasting future prices, it is not always accurate and should not be used in
isolation to evaluate the economic feasibility of a project or business venture. It
should be combined with other methods of analysis such as fundamental analysis,
market analysis and economic analysis to have a comprehensive evaluation.