Entrepreneurshipdevelopment

1. ENTREPRENEURSHIP
UNIT- 2
Idea generation,
….Feasibility,
creativity……….

2. Risks of Owning a Business
• Working long hours
• Having an uncertain income
• Being fully responsible
• Risking one’s investment

3. Rewards of Owning a Business
• Being your own boss
• Doing something you enjoy
• Having the opportunity to be creative
• Freedom to set your own schedule
• Controlling your salary
• Contributing to the community

4. Types of Businesses
• Start your own business
• Purchase a franchise business
• Buy a new or existing business
• Web-based business

5. Start Your Own Business
Advantages
– Make all the decisions about everything
– Completely independent
Disadvantages
– No certainty that customers will purchase what you offer
– Difficult to start a new business

6. Purchase an Existing Business
Advantages
– Already has customers, suppliers and procedures
– May train the new owner
– Prior records of revenues, expenses, and profits
– Financial arrangements can be easier
Disadvantages
– May be for sale because not making money
– Serious problems may be inherited
– Capital is required

7. Franchise Ownership
Franchise: Legal agreement that gives an individual the right to
market a company’s products or services in a particular area.
Advantages
– Provided with an established product or service
– Offer management, technical, and other assistance
– Equipment and supplies can be less expensive
– Guarantee of consistency attracts customers
Disadvantages
– Can cost a lot of money and cut down on profits
– Owners of franchises have less freedom to make decisions than other
entrepreneurs
– Franchises are dependent on the performance of other franchisees in
the chain
– The franchisor can terminate the franchise agreement

8. Franchise Business

9. Global and Domestic Business
Global
– A business that sells its product in more than one country.
– Importing: Buying goods from other countries to sell in
their own country.
– Exporting: Selling and shipping goods to another country.
Domestic
– A business that sells its product in its own country.

10. Business Opportunities and Trends
• Home-based Businesses
• Businesses related to:
– Technology
– Fitness and Health
– Indulgence Goods
– Ethnic Products
– Outsourcing
– Strategic Alliances

11. New and Existing Ideas
• Enter the Family Business
– Advantages are:
• Trust and togetherness
• Great potential for success
– Disadvantages are:
• Only 1/3 of family businesses survive after the 2nd
generation
• Never get away and take time off
• Buy a Business that’s for Sale
– Advantages are:
• Experienced employees
• Substantial inventory and trade credit
• Has a location
– Disadvantages are:
• Business may be for sale because it is not successful

12. Purchasing an Existing Business
Ray Kroc of McDonalds purchased a hamburger stand
from the McDonalds brothers

13. Web-based Enterprises
Businesses that generate their revenue directly from
their website fall into the web-based business
category
The following are web-based enterprises:
• E-bay
• Monster
• Amazon

14. Creativity
Whatever type of business you choose to do, you must
think creatively about every aspect of your business

15. Idea Generation

16. Sources of Ideas
• Initial considerations
• Two phases
• Skills needed to generate ideas

17. Initial considerations……………..
You see what you believeYou see what you believe

28. Initial considerations
• You see what you believe
• Individual experiences

29. Individual Experiences
• Learning – technology push
• Learning in many places
• Frustration- self
• Frustration- others
Opportunity Driven or Problem Solution:
Two faces of the same coin

30. Two Phases of Ideas
• Generation of ideas

31. • Which comes first? An idea or a business?
Generation of Ideas

32. Funny Relationships
Need to start a
business
Settling on an Idea
Business
Plans

33. Question
• Generate as many ideas you can in ten
minutes

34. • Which comes first? An idea or a business?
• Searching for ideas
• Trial and error
• No block bluster, no tiny tot either!
Generation of Ideas

35. Idea generation
• The search for a promising business idea.

36. IN WHICH DIRECTION DO
YOU PRAY???
HOW MANY OF YOU
KNOW THE DIRECTION
OF MECCA???

37. WHY IS ART FRY
SO………. FAMOUS???

38. WHAT ABOUT SKUNK
WORKS???

39. HOW?
Periodic SWOT Analysis generates new
ideas.

40. Clear Formulation of Objectives
e.g:
• Cost reduction
• Productivity improvement
• Increase in capacity utilisation

41. Fostering a conducive climate
Analyse the performance of existing
industries
Examine the inputs and outputs of various
industries
Study govt. guidelines
Look at suggestions of financial institutions
Investigate local materials and resources

42. Study economic and social trends
Study new technological developments
Draw clues from consumption abroad
Explore the possibility of reviving sick
units
Identify unfulfilled psychological needs
Attend trade fairs
Stimulate creativity for generating new
ideas

43. Screening of Ideas
• Not all ideas are business worthy
• Feasibility is two faced
• Technical
• Business: market and financial

44. Two Phases of Ideas
• Generation of ideas
• Screening of ideas
• End result: A product/service concept

45. A Framework to Think About
Ideas for Entrepreneurship

46. Existing
Products
Modified
Products
New Products
Existing
Markets
Identifiable
Markets
New
Markets

47. Women’sWomen’s
ShampooShampoo
AlternativeAlternative
GreetingGreeting
CardsCards
Solid stateSolid state
still camerastill camera
Clothes forClothes for
professionalprofessional
womenwomen
OvernightOvernight
packagepackage
deliverydelivery
SpecialtySpecialty
sports carsports car
Mobile petMobile pet
groominggrooming
devicedevice
PersonalPersonal
ComputersComputers
Laser discsLaser discs
Existing
Products
Modified
Products
New Products
Existing
Markets
Identifiable
Markets
New
Markets

48. Process Innovations
• Intellectual property protection is a
challenge

49. Tool kit
• Naïve listening
• Look again/ read widely
• Ask why
• Post it notes
• Idea folder

50. Idea-generation Methods
• Library resources can help you examine different
opportunities
• Small Business Administration is a government organization
that exists to help small businesses and their owners
• Talk to entrepreneurs and attend trade shows
• Start “people watching”
• Watch for demographic changes
• Become an insatiable reader

52. Feasibility of Ideas
Once you’ve got an idea for your new business, you
need to turn it into a business concept
Business Concept: Idea for a new business that can
be tested.
1. What is the product or service being offered?
2. Who is the customer?
3. What is the benefit you are providing?
4. How will you get the product or service to the
customer?

53. Feasibility of Ideas
Feasibility Analysis: The process used to test a
business concept
1. Are there customers who want what you have to
offer?
2. What conditions must be present for you to
decide to go forward with the business?
The analysis will show if there is enough demand for
your product or service.

54. Feasibility of Ideas
Ways of testing the business concept in the market are:
• Testing product or service requirements
• Talking to customers
• Studying the competition
A feasibility study will help you determine a business
idea’s potential and profitability.

55. Available Resources to Assist Small Business
Owners
• Friends and Family
• Local and Municipal Government
• State Government

56. Available Government Agencies to Assist
Small Business Owners
• SBA-Small Business Administration
– Federal government agency whose purpose is to
help small businesses. They provide management
and technical advice to owners or prospective
owners of small businesses. They also guarantee
loans made by commercial banks. This means that
the SBA agree to pay the bank loan if you cannot.
The SBA will guarantee up to 90% of a bank loan.
• Chamber of Commerce
• State Governments

57. Let’s Review
• Compare risks and rewards of owning a business
• Determine essential factors needed to choose type
of business to start
• Assess business opportunities and trends, both
domestic and global (include new and existing ideas,
franchises, and web-based enterprises)
• Apply idea-generation methods
• Determine feasibility of ideas
• Outline available resources and government
agencies to assist small business owners