INSTRUCTIONAL OBJECTIVES

Upon completion of this lecture, Students should be able to:

1.Define Business Idea & Opportunity
2.State the Sources of Business Idea & Opportunity
3.Explain Entrepreneurial Risk
4.Identify Risks Associated with Entrepreneurship
5.Define Design Thinking & State its application in Entrepreneurship
 MEANING OF BUSINESS IDEA
 An idea is the base of the pyramid when it comes to business as a whole.
 Not all ideas are business ideas.
 A 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.
 A business idea typically centers around a commodity or service that can be
sold for money, according to a unique model.
 Again, a business idea is a concept or market opportunity to make money by
creating and commercializing a product or service.
 MEANING OF BUSINESS IDEA
 In other cases, it may not be for-profit purposes, but rather for social
purposes as is a social enterprise, where profits are allocated to maximize
social benefits instead of owner wealth.
 New business ideas can emerge in all industries. A business idea is a unique
concept that revolves around creating a product or service, offered to a
particular market segment for money, for the purpose of achieving profitability
or financial returns.
 A business idea is often linked to its creator who needs to identify the
business's value proposition in order to launch in the market and
establish competitive advantage.
 The characteristics of a promising business idea are: innovative, unique,
problem-solving, profitable; and understandable.
 SOURCES OF BUSINESS IDEA
 Own skills or hobbies – skills, interests, hobbies are great sources for making money
and starting a business. You can monetize it, for example, by building a website.
 Personal experience – bad experiences can be an inspiration to find solutions and
business opportunities. If a lot of people have a similar problem, you might monetize a
solution to the problem. You can also seek inspiration for new businesses from the
experiences of others.
 Previous work experience – the workplace isn’t just about earning a paycheck; it’s also
about gaining new skills, experience, and business opportunities. You may be able to fill
in the gaps for solutions to problems your former company is facing.
 Conferences and exhibitions – for example, attending a franchise conference can be an
opportunity for you to work with franchisors and open outlets in your neighborhood.
 Small budget market research – surfing the internet is a valuable resource for finding
business opportunities. For example, you can learn from a business idea abroad and adopt
it in the local market.
 MEANING OF BUSINESS OPPORTUNITY
 In business, opportunities are circumstances or changes that allow you to advance your
business career.
 An opportunity is a chance to take advantage of a situation. It can relate to several
situations in career, sports, business, etc. It is what makes the difference between real
leaders, winners, and quitters.
 A business opportunity is the chance to take advantage of an occurrence in the market
for business gain. It is what makes some businesses succeed while others fail.
 A business opportunity is the chance to take advantage of an occurrence in the market to
begin a business. It involves some kind of favourable condition which exists in the
market.
 A business opportunity is what makes some businesses succeed while others fail.
 Leaders are successful because they see opportunities before other people spot them,
make plans then build business models to capitalize on that opportunities.
 TIPS FOR FINDING BUSINESS OPPORTUNITIES
 Schedule time away from work or life's distractions to think about and
recognize potential opportunities.
 Have a positive mindset towards your environment.
 Keep your resume updated so as soon as opportunities arise, you can share
your experience and accomplishments with the right people.
 Know your skills, strengths, desires and values.
 Be flexible and willing to accept unexpected opportunities.
 Identify ways you can improve, and pursue self-development in those areas.
 Be aware of your verbal and nonverbal cues and behavior and their impact
on the people around you.
 Place value in your work so others see it as important, too.
 When you find an opportunity that matches your strengths and interests,
take it and use it to learn and grow.
 ENTREPRENEURIAL RISKS MANAGEMENT
 Risk implies future uncertainty about deviation from expected earnings or
expected outcome.
 Risk measures the uncertainty that an investor is willing to take to realize a
gain from an investment
 All investments involve some degree of risk. In finance, risk refers to the
degree of uncertainty and/or potential financial loss inherent in an investment
decision.
 In general, as investment risks rise, investors seek higher returns to
compensate themselves for taking such
 In entrepreneurship context, risk is the amount of uncertainty an
entrepreneur is willing to accept in regard to the future returns they expect
from their investment.
 ENTREPRENEURIAL RISKS MANAGEMENT
 In a nutshell, entrepreneurial risk is the exposure an entrepreneurial venture
has to various factors like competition, consumer preferences and other
metrics that might lower profits or endanger the venture's success.
 Risk-taking in entrepreneurship is the process of identifying, evaluating,
mitigating, and trying out potential opportunities and strategies that may help
you build or grow your business but could also lead to personal or professional
 Risk management is the process of identifying, assessing and controlling
financial, legal, strategic and security risks to an organization’s capital and
earnings.
 These threats, or risks, could stem from a wide variety of sources, including
financial uncertainty, legal liabilities, strategic management errors,
accidents and natural disasters.
 TYPES OF RISKS IN ENTREPRENEURSHIP
According to the Harvard Business Review, business risks are bucketed into three
categories: preventable risks, strategy risks, and external risks.
 Preventable risks stem from within an organization (whether a team of one or
more), are entirely controllable, and should be avoided at all costs. Examples of
preventable risks include lying to potential investors, ignoring environmental
regulations, or engaging in illegal business activity.
 Strategy risks are beneficial and necessary in entrepreneurship. These risks arise
from strategic opportunities that show potential for return on investment. Some
examples include launching a new product line, expanding into another country,
or bringing on a new investor.
 External risks come from beyond your business operations and are outside of
your control. For example, you’ll likely have little to no influence over current
economic conditions or states of emergency, but they may impact the success of
your ventures.
 DESIGN THINKING IN ENTREPRENEURSHIP
 Design thinking is a user-centric approach based on human cognitive ability.
 It uses problem-solving ability to overcome the challenges faced by
businesses.
 It requires a change in perspective to identify customers' needs, find
methods to solve them and prepare an approach to execute the methods,
consequently launching a product or service.
 Design thinking and entrepreneurship go hand in hand. Entrepreneurial
design thinking allows you to follow various thinking styles and probe open-
ended options in order to strike actionable solutions and create a mark in the
competitive marketplace.
 DESIGN THINKING IN ENTREPRENEURSHIP
There are five phases or stages to understanding the customer's requirements
through design thinking. They are as follows:

Phase 1: Empathize
Phase 2: Define the Problem
Phase 3: Ideate (Generate idea)
Phase 4: Prototype
Phase 5: Test

Design Thinking Tools

These tools ease the ideation process through different methods, such as
questions, maps, software, and kits, as explained below:
 DESIGN THINKING IN ENTREPRENEURSHIP
1. Innovation Flowchart: Displaying the idea on a flowchart requires step-wise detail
of the procedure. It also arranges the steps in chronology to prioritize them. The
overview through flowchart can help others decipher the thoughts of thinkers.
2. Design Thinking Tool Kit: Based on the domain of problems, such as education,
construction or others, the specific design thinking tool kits can help by providing
the procedures to execute the ideas.
3. Question Ladder: It refers to a table with questions and possibilities, methods or
resources. Question Ladder is based on the concept that one needs to focus on
correct questions over ignorable ones. Finding and working on the answer to
unrequired questions decreases efficiency and wastes the organization's resources.
4. Design Thinking Mix Tapes: Available from Standford's Design School, it helps to
empathize, ideate and test the thinker's probable solutions. It offers three mixtapes
to guide the user.
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