the Business Idea Copyright 2010 by The McGrawHill Companies Inc All rights reserved McGrawHillIrwin Learning Objectives To identify various sources of ideas for new venture To know the methods available for generating new venture ID: 782057
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Slide1
Chapter 4Creativity and the Business Idea
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin
Slide2Learning ObjectivesTo identify various sources of ideas for new ventureTo know the methods available for generating new venture ideasTo discuss creativity and the techniques for creative problem solvingTo discuss the aspects of the product planning and development process
Slide3DefinitionsEntrepreneur: Person whose goal is to create or capitalize on new economic opportunities through innovation People who own, operate, and take the risk of a business venture
Entrepreneurship: Process through which entrepreneurs create and grow enterprises
Source: Based on
Dabson
and Wilcox (2012)
Slide4Why People Become Entrepreneurs
Slide5Who are entrepreneurs?Common traits:Original thinkersRisk takersTake responsibility for own actions
Feel competent and capableSet high goals and enjoy working toward themSelf employed parentsFirstborns
Between 30-50 years old
Well educated – 80% have college degree and 1/3 have a graduate level degree
Slide6Characteristics of EntrepreneursSuccessful Entrepreneurs
Key Personal Attributes
Good Technical Skills
Strong Managerial Competencies
Slide7Key Personal AttributesEntrepreneurs are Made, Not Born!Many of these key attributes are developed early in life, with the family environment playing an important role
Entrepreneurs tend to have had self employed parents who tend to support and encourage independence, achievement, and responsibilityFirstborns tend to have more entrepreneurial attributes because they receive more attention, have to forge their own way, thus creating higher self-confidence
Slide8The Successful EntrepreneurPassion for the Business
Product/customer focusTenacity Despite Failure
Execution Intelligence
The Successful Entrepreneur
Slide9Entrepreneur Development
Slide10Successful and Unsuccessful EntrepreneursSuccessfulCreative and InnovativePosition themselves in shifting or new marketsCreate new productsCreate new processesCreate new delivery
UnsuccessfulPoor ManagersLow work ethicInefficientFailure to plan and preparePoor money managers
Slide11How Entrepreneurs Can Succeed
11
Plan and manage effectively
Recognize opportunity
Test the opportunity in the marketplace
Assemble an expert team to execute the business concept
Slide12Business IdeasAre a ‘dime a dozen’Don’t fall in love with your own ideaDon’t hide it under a tarp in the back yard
Look before you leap (critically evaluate the potential for the business before starting)You have to screen from 100 to 1,000 different ideas before you find a true opportunity that fits you in this place and at this time.Avoid the service industry in a declining economyAvoid the retail industry in a declining economySeek value-added, export-oriented businesses selling into growing markets
Slide13Generating New Business IdeasTechniques include:Group brainstorming/lateral thinking exercisesResearch – observation, enquiry, play, prototype, experimentFocus groups
SurveysAnalysis of and reflection on trends:EconomySociety – social trendsTechnologySciencePolitical and regulatory changes
There is opportunity in change, chaos, complacency and even boredom.
Slide14Mental Locks/Barriers to CreativityFocus on the right answerThat’s not logicalFollow the rules
Be practicalAvoid ambiguityTo err is wrongPlay is frivolousThat’s not my areaDon’t be foolishI’m not creative
Slide15Idea versus OpportunityIdeas are “a dime a dozen” Opportunities are business ideas that offer the potential for a return on invested capital that more than offsets the costs of that capital on a risk-adjusted basis.
Slide16The Ideal Opportunity (Heaven)A motivated and large market of customers prepared to pay any price for the product or service you offer
Repeated purchases are necessary for customers to satisfy their demandSignificant barriers of entry for any potential competitors preserving your market dominance for a long period of timeLittle or no capital investment requiredHigh profit
margin (Selling price less cost to produce)
Few employees
and
little
demand on
your time
Slide17Little Opportunity (Business Hell)Few customers, no repeat purchases, sporadic and unpredictable demandF
ew barriers of entry for any potential competitors making it easy for anyone to enter the market to compete with you if you manage to develop the marketLarge initial and on-going capital investment requiredLow profit margin per unit (Selling price less cost to produce)
Slide18The Long Road to SuccessIdeas opportunities feasibility
business plan implementation evaluation modification manage
Ideas
Opportunities
Feasibility Screening
(Proof of concept followed
By
Financial viability
screening)
Business
Plan
Implementation
(financing, resourcing)
Evaluation
Slide19Brainstorming New Product InnovationsScreening Those IdeasBusiness PlanImplementationThe Process
Slide20The Process - is like a funnel!
Creative / Soft-Thinking
(
Right Brain
)
- brainstorm new product innovations
Logical
/ Hard-Thinking
(
Left Brain
)
- formal business planning (opportunity screening, market forecasts, financial forecasts)
Slide21Figure 4.6 - The Product Planning and Development Process
Slide22CompleteShortIntegratedPrepared for the audienceOrganized…..will be discussed in the next session…..
A Good Business Plan is...
Slide23Generate Your Business Idea and Build
Your Business Team
Business idea must be feasible and marketable
Business can be liquidated at the end of this semester
Legal product only
Avoid food and beverage
No just resale/packaging
Slide24OrganizationCEO (1 student)Manager (1 student for each):Product (ion)MarketingHuman ResourceFinanceStaff :5-7 for production and marketing dept.1-2 for human resource and finance dept.
Slide25Let’s Do:Make your (tentative) organization!Generate your business idea!Determine your company’s name, vision, mission (s), logo, tag line!Presented next session!
Slide26Drafting Your Action Plan“Good plans shape good decisions. That's why good planning helps to make elusive
dreams come true.”Lester Robert Bittel