Lesson

Lesson

3 Generating Ideas for Business

What I Need to Know

LO 2. Select a business idea based on the criteria and techniques set

2.1 Enumerate various criteria and steps in selecting a business idea
2.2 Apply the criteria/steps in selecting a viable business idea
2.3 Determine a business idea based on the criteria/techniques set
(TLE_EM9-12-I0-3)

What’s In

Activity1. Right Meaning

DIRECTION: Underline the right meaning of each word. Write your answer on a separate
sheet of paper.

1. Product development
a. merchandise
b. needs and wants
c. presentation of a new business
d. process of making a new product to be sold by a business

2. Basic needs
a. kind of business
b. lifestyle and culture
c. essential to an individual to live
d. extravagance way of living

3. Concept development
a. development of a product
b. growth
c. expansion
d. product

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4. Identify customer needs
a. product to be produced
 b. using survey forms and interviews
c. product specifications
d. competitive products

5. Product concepts
a. illustrate the types of products
b. refine product specifications
c. perform economic analysis
d. plan the remaining development project

What’s New

Activity2. Making My Own Vicinity Map

Directions: In a separate sheet of paper or in your notebook draw a vicinity map reflective of
potential market in Wellness Massage in your province. Provide a simple statement to
describe your map.

VICINITY MAP

What is it
 Generating Ideas for Business

The process of developing and generating a business idea is not a simple process.
Some people come up with a bunch of business ideas that are not really feasible. There are
two problems that arise; first is the excessive generation of ideas that can forever remain as
a dreaming stage and the second is when they don‘t have ideas and don‘t want to become
entrepreneurs.

The most optimal way is to have a systematic approach in generating and selecting a
business idea that can be transformed into a real business. Here are some basic yet very
important considerations that can be used to generate possible ideas for business:

1. Examine existing goods and services. Are you satisfied with the product? What do
other people who use the product say about it? How can it be improved? There are many
ways of improving a product from the way it is made to the way it is packed and sold. You
can also improve the materials used in crafting the product. In addition, you can introduce
new ways of using the product, making it more useful and adaptable to the customers‘
many needs. When you are improving the product or enhancing it, you are doing an
innovation. You can also do an invention by introducing an entirely new product to
replace the old one.

Business ideas may also be generated by examining what goods and services are sold
outside the community. Very often, these products are sold in a form that can still be
enhanced or improved.

2. Examine the present and future needs. Look and listen to what the customers,
institutions, and communities are missing in terms of goods and services. Sometimes,
these needs are already obvious and identified right away. Other needs are not that
obvious because they can only be identified later on, in the event of certain development
in the community. For example, a province will have its electrification facility in the next
six months. Only by that time will the entrepreneur could think of electrically-powered or
generated business such as photo copying, computer service, digital printing, etc.

3. Examine how the needs are being satisfied. Needs for the products and services are
referred to as market demand. To satisfy these needs is to supply the products and
services that meet the demands of the market. The term market refers to whoever will
use or buy the products or services, and these may be people or institutions such as
other businesses, establishments, organizations, or government agencies.

There is a very good business opportunity when there is absolutely no supply to a

pressing market demand.

Businesses or industries in the locality also have needs for goods and services. Their
needs for raw materials, maintenance, and other services such as selling and distribution
are good sources of ideas for business.

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4. Examine the available resources. Observe what materials or skills are available in
abundance in your area. A business can be started out of available raw materials by
selling them in raw form and by processing and manufacturing them into finished
products. For example, in a copra-producing town, there will be many coconut husks and
shells available as ―waste‖ products. These can be collected and made into coco rags
or doormats and charcoal bricks and sold profitably outside the community.

A group of people in your neighbourhood may have some special skills that can be
harnessed for business. For example, women in the Mountain Province possess loom
weaving skills that have been passed on from one generation to another. Some
communities set up weaving businesses to produce blankets, decorative, and various
souvenir items for sale to tourists and lowlanders.

Business ideas can come from your own skills. The work and experience you may have
in agricultural arts, industrial arts, home economics, or ICT classes will provide you with
business opportunities to acquire the needed skills which will earn you extra income
should you decide to engage in income-generating activities. With your skills, you may
also tinker around with various things in your spare time. Many products are invented this
way.

5. Read magazines, news articles, and other publications on new products and
techniques or advances in technology. You can pick up new business ideas from
magazines such as Newsweek, Reader‘s Digest, Business Magazines, ―Go Negosyo‖,
Know About Business (KAB) materials, and Small-Industry Journal. The Internet also
serves as a library where you may browse and surf on possible businesses. It will also
guide you on how to put the right product in the right place, at the right price, and at the
right time.

Key Concepts of Selecting a Business Idea

Once you have identified business opportunities, you will eventually see that there
are many possibilities available for you. It is very unlikely that you will have enough
resources to pursue all of them at once.

You have to select the most promising one among hundreds of ideas. It will be good
to do this in stages. In the first stage, you screen your ideas to narrow them down to about
few choices. In the next stage, trim down the choices to two options. In the final stage,
choose between the two and decide which business idea is worth pursuing.

In screening your ideas, examine each one in terms of the following guide
questions:
1. How much capital is needed to put up the business?
2. Where should the business be located?
3. How big is the demand for the product? Do many people need this product and will
continue to need it for a long time?
4. How is the demand met? Who are processing the products to meet the needs
(competition or demand)? How much of the need is now being met (supply)?
5. Do you have the background and experiences needed to run this particular
business?
6. Will the business be legal and not against any existing or foreseeable government
regulation?
7. Is the business in line with your interest and expertise?
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Your answers to these questions will be helpful in screening which ones among your
many ideas are worth examining further and worth pursuing.

In generating a business idea, you should first identify the type of business suited to
your business idea. You should analyse and scan the potential environment, study the
marketing practices and strategies of your competitors, analyse strengths, weaknesses,
opportunities, and threats in your environment to ensure that the products or services you
are planning to offer will be patronized and within easy reach of target consumers.

How to conduct SWOT Analysis:

 Be realistic about the strengths and weaknesses of your business when conducting
SWOT Analysis.
 SWOT Analysis should distinguish between where your business is today, and where
it can be in the future.
 SWOT Analysis should always be specific. Avoid any gray areas.
 Always apply SWOT Analysis in relation to your competition, i.e. better than or worse
than your competition.
 Keep your SWOT Analysis short and simple. Avoid complexity and over analysis.
 SWOT Analysis is subjective.

What More

Activity 3. I. SWOT Analysis

Directions: In a separate sheet of paper or in your notebook list down all your observations
for your business idea. Categorize your observations according to strengths, weakness,
opportunities and treats. After carefully listing them down, use the stated strategies to come
up with a sound analysis, activities and best business idea.

Strength (S) Weaknesses (W)

- -
- -
- -
- -
- -

Opportunities (O) Threats (T)

- -
- -
- -
- -
- -

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Strategies:

 SW - Maximize on the Strengths to overcome the internal Weakness.

 OW - Capitalize on the Opportunities to eliminate the internal weakness.
 ST - Maximize on your Strengths to eliminate the external Threats.
 OT - Take advantage of the available Opportunities to eliminate the external threats.

Analysis:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________

Activities:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________

My Best Business Idea:

_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________

II. True or False

Directions: Write T if the statement is true and F if the statement is false. Write your
answer on a sheet of paper.

_____1. The most optimal way is to have a systematic approach in generating and selecting
a business idea that can be transformed into a real business.
_____2. The Internet does not serve as a library where you may browse and surf on
possible businesses.
_____3. Business ideas can come from your own skills.
_____4. A business cannot be started out of available raw materials by selling them in raw
form and by processing and manufacturing them into finished products.
_____5. Needs for the products and services are referred to as market demand.
_____6. Look and listen to what the customers, institutions, and communities are missing in
terms of goods and services.
_____7. Business ideas may also be generated by examining what goods and services are
sold outside the community.
_____8. You can also do an invention by introducing an entirely new product to replace the
old one.
_____9. The process of developing and generating a business idea is a very simple process.
_____10. To satisfy the needs is to supply the products and services that meet the demands
of the market.

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 What I have Learned

Activity 4. Considerations Used to Generate Possible Ideas for Business

Directions: Explain the meaning of the following important considerations used to

generate possible ideas for business.

1. Examine existing goods and services

_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________.

2. Examine the present and future needs

_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________.

3. Examine how the needs are being satisfied

_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________.

4. Examine the available resources

_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________.

5. Read magazines, news articles, and other publications on new products and techniques
or advances in technology.
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________.
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What I can do

Activity5. Extra Reading and Video Viewing

Directions: To deepen your understanding of the lesson, perform the following tasks:

Reading books and watching videos have been considered as some of the most effective
educational activities that can help learners broaden their understanding on a certain topic.
In this particular task, you will be asked to conduct extra reading and video viewing on the
Internet with the following topics:

A. Steps in selecting a business idea

B. Criteria of a viable business idea
C. Benefits of a good brand
D. Ways on developing a brand

After successfully performing the assigned task, make a narrative report about it and share it
with the class.
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Summary
The process of developing and generating a business idea is not a simple
process. Some basic yet very important considerations that can be used to generate
possible ideas for business: examine existing goods and services, examine the
present and future needs, examine how the needs are being satisfied, examine the
available resources and read magazines, news articles, and other publications on
new products and techniques or advances in technology.

In generating a business idea, you should first identify the type of business
suited to your business idea. You should analyse and scan the potential environment,
study the marketing practices and strategies of your competitors, analyse strengths,
weaknesses, opportunities, and threats in your environment to ensure that the
products or services you are planning to offer will be patronized and within easy reach
of target consumers.

Assessment (Post-test)

Multiple Choice

Direction: Write the letter of the correct answer. Write your answer in a sheet of paper.

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1.
Assessment (Post-test)
References