UNIT 4

From Idea to opportunity: Idea generation-

sources and methods, identification and
classification of ideas. Individual creativity: idea to
business opportunity, Opportunity assessment,
Process of New Venture and its Challenges, Venture
capital, Angel investing, Crowdfunding
 Developing a Business Plan: Business Planning
Process: elements of business planning, preparation
of project plan, components of an ideal business
plan – market plan, financial plan, operational plan,
and, Feasibility Analysis – aspects and methods:
Economic analysis, financial analysis, market-, and
technological feasibility.
What is Feasibility Study?

 Feasibilitystudy examines the

viability or sustainability of an idea,
project, or business. The study
examines whether there are enough
resources to implement it, and the
concept has the potential to
generate reasonable profits. In
addition, it will demonstrate the
benefits received in return for taking
the risk of investing in the idea.
Types of Feasibility Study

 #1 – Technical Feasibility
 #2 – Financial Feasibility
 #3 – Market Feasibility
 #4 – Organization Feasibility
#1 – Technical Feasibility

 Technical feasibility study checks for

accessibility of technical resources in the
organization. In case technological resources
exist, the study team will conduct assessments
to check whether the technical team can
customize or update the existing technology to
suit the new method of workings for the project
by properly checking the health of the hardware
and software.
 Many factors need to be taken into
consideration here, like staffing requirements,
transportation, and technological competency.
#2 – Financial Feasibility

 Financial feasibility allows an organization to

determine cost-benefit analysis. It gives details
about the investment that has to go in to get the
desired level of benefit (profit). Factors such as total
cost and expenses are considered to arrive
simultaneously. With this data, the companies know
their present state of financial affairs and anticipate
future monetary requirements and the sources from
which the company can acquire them. Investors can
largely benefit from the economic analysis done.
Assessing the return on investment of a particular
asset or acquisition can be a financial feasibility
study example.
#3 – Market Feasibility

 Itassesses the industry type, the

existing marketing characteristics
and improvements to make it better,
the growth evident and needed,
competitive environment of the
company’s products and services.
Preparations of sales projections can
thus be a good market feasibility
study example.
#4 – Organization Feasibility

 Organization feasibility focuses on

the organization’s structure,
including the legal system,
management team’s competency,
etc. It checks whether the existing
conditions will suffice to implement
the business idea.
Purpose

 A feasibility study of a business can help choose the best

available alternative by assessing the opportunity cost. The
reasons for rejecting one option can reveal weaknesses of the
company; investigating options can lead to undiscovered
opportunities. From these, a company can assess why certain
factors pull them down and find measures to mitigate them.
When these steps are executed, and necessary corrective
actions are taken, it reflects on its performance. Thus profits
can follow easily and attract investors. This analysis can also
help in securing funds from financial institutions. These
studies analyze the company’s existing business models and
the gaps it carries. Solutions suggested by them reduce the
risk of failures. They tell us whether a proposed business idea
shall be taken forward by its practicality. Finally, it checks
whether it is doable by estimating the opportunity and threats
of the plan.
Idea generation- sources
and methods
 Ideageneration techniques are activities and
approaches that can help people process and
analyze their thoughts in order to think of
new inventions, solutions or designs. You can
use these techniques in both individual and
group settings. These techniques may also
involve tools like computers, whiteboards or
paper to help you compile your thoughts.
Some methods require group discussions,
which you can choose to do aloud or through
written communication.
https://www.indeed.com/career-
advice/career-development/
idea-generation-techniques-
besides-brainstorming

 1. Reverse brainstorming
 2. Brainwriting
 3. Brain netting
 4. Forced relationships
 5. Role-storming
 6. Storyboarding
 7. Five whys
 8. Six thinking hats
 9. S.C.A.M.P.E.R.
 10. S.W.O.T. analysis
 11. Group sketching
 12. Word banking
 13. Wishing
 14. Gap filling
 15. Rapid ideation
 16. Trigger storming
 17. "What if"
 The "what if" method introduces scenarios to
encourage creative thinking. When facing a
problem, you could reframe it using "what if"
questions to analyze the problem from a
different perspective. Some examples of
these questions could be:
 "What if we gave this problem to an
artist rather than an engineer to solve?"
 "What if this problem happened at the
end of the fiscal year?"
 18. Zero draft
 Writers often use zero drafting as a variation
of freewriting. Starting with a topic, you'd
write everything you know about it, what
you want or need to know and why the topic
is important. You could then add other ideas
that come to mind while writing. This
method can also be beneficial for those with
writer's block in order to develop thoughts
freely, but with a few prompts to guide
them.
identification and
classification of ideas.
 Here are five simple ways through which
you can identify world-changing business
ideas:
 Find opportunities in your own community. ...
 Draw upon your own personal experiences. ...
 Look for ideas that get other people involved. ...
 Go out of your way to ask others how you can
help. ...
 Give back through meaningful philanthropical
work.
Classification of ideas

 There are numerous classifications of ideas, but it was Locke and Hume who
formulated perhaps the most useful of them, which consists of:
 Ideas of primary qualities. Simple ideas, closer to the perceptible
objective qualities of things in reality.
 Ideas of secondary qualities. Ideas merely subjective, which do not
depend on the objective qualities of things.
 Simple ideas. The most elementary and basic ideas, classifiable as:
 Feeling ideas. They are the result of external experience or external perception ,
what we now call sensations.
 Ideas for reflection. They are the product of psychic experience or internal
perception.
 Complex ideas. Those that are formed from simple ideas, based on
relationships, modes and substances. These are divided into:
 Ideas of modes. Complex ideas that allude to properties incapable of subsisting on
their own, but are derived from substances, properties or appreciations, such as the
ideas of triangle, beauty or gratitude.
 Relationship ideas. Ideas that arise from the comparison between one thing and
another, such as ideas of prior, perspective or proportion.
 Ideas of substances. Those that allude to concrete things that subsist by
themselves, such as the idea of stone, of person, of fire .
Individual creativity: idea to
business opportunity
Turning An Idea Into A Business

 1. Figure out what problem is

being solved
 2. Find your market
 3. Find your support
 “Have you ever noticed how few
successful startups were founded by
just one person?”

 4.Create a financial model and

plan the first phase
 5. Figure out your source of capital
 6. Build the MVP
 The MVP, or minimal viable product, provides you with
the feedback you need before putting your idea on the
market. After all, it’s of no use to anyone if you build a
product customers don’t want.
 Minimal does not necessarily mean “basic.” The point
is not to build a minimal product, but a product that is
already great (viable), yet has room to improve
(minimal). It’s how early adopters actually jump on
board to use the product and, if they like it, will provide
you the feedback to make it better for them.
 7. Find the pivot
 The information gathered from your
early adopters helps you figure out
what works and what garnered the
most response from your audience.
You might find that their feedback is
entirely different than what you
expected and planned for.
 This can lead you to “pivot” your
business model, or change a
 8. Stay positive
Opportunity assessment

 Opportunity Assessment is the first

phase of the life cycle; it begins
when a lead from a customer is
identified as a potential opportunity
and enough interest exists to
warrant investigating it further as a
potential project. It ends with a
decision about proceeding to the
following phases of the life cycle.
https://www.pmi.org/learning/library/
opportunity-assessment-doing-right-
projects-7814
Process of New Venture and
its Challenges
 https://www.startuploans.co.uk/busin
ess-advice/10-biggest-startup-challe
nges/
 1. Failure to plan
 2. Lack of demand
 3. Ineffective marketing
 4. Knowledge and skills gaps

5. Financial management
 6. Securing funding
 7. Hiring the right people
 8. Leadership
 9.
Time management and
productivity

 10. Impact on your health
Venture capital,

 Venture capital (VC) is a form of

private equity and a type of
financing that investors provide
to startup companies and small
businesses that are believed to
have long-term growth potential.
Venture capital generally comes from
well-off investors, investment banks,
and any other financial institutions.
Features of Venture Capital
investments

 High Risk
 Lack of Liquidity
 Long term horizon
 Equity participation and capital gains
 Venture capital investments are
made in innovative projects
 Suppliers of venture capital
participate in the management of
the company
Methods of Venture capital
financing

 Methods of Venture capital financing

 Equity
 participating debentures
 conditional loan
The venture capital funding process
typically involves four phases in the
company’s

 Idea generation
 Start-up
 Ramp up
 Exit
 Business Planning Process:
elements of business planning
 Effective business plans contain several key components
that cover various aspects of a company's goals. The
most important parts of a business plan include:
 1. Executive summary
 2. Business description
 3. Market analysis and strategy
a. The geographic locations of your target markets
b. The primary pain points experienced by your target
customers
c. The most prominent needs of your target market and
how your products or services can meet these needs
d. The demographics of your target audience
e. Where your target market spends most of their time,
such as particular social media platforms and physical
locations
 4. Marketing and sales plan
 5. Management and organization
description
 6. Products and services
description
 7. Competitive analysis
 8. Operating plan
 9. Financial projection and needs
 10. Exhibits and appendices
 Resumes of company management
and other stakeholders
 Marketing research
 Permits
 Proposed or current marketing
materials
 Relevant legal documentation
 Pictures of your product
 Financial documents
What is Business Planning?

 Justlike we follow a road map to reach our

destination, in the same way, for making a
business successful, a business plan is the most
basic need. So, basically, preparing and laying
down all the plans and blueprint to attain
business success is known as business
planning.
 Also, a business plan also needs regular updates
and changes as per the dynamic market
scenario. In other words, business planning
means setting a business outcome and thereby
formulating steps to attain that set outcome.
Objectives of business planning

 Themain objective of business planning is

to plan and formulate the blueprint of
business operations to attain business
success. Following are the objectives of
conducting business planning:

 Give shape to your business ideas

 Assists you in deciding your priorities
 Helps in establish business prospects
 Helps in delegating the responsibility and
authority
 Estimating the requirement of resources
preparation of project
plan
components of an ideal
business plan – market plan
 1. Executive summary
 2. Business description
 3. Market analysis and strategy
 4. Marketing and sales plan
 5. Management and organization
description
 6. Products and services
description
 7. Competitive analysis
 8. Operating plan
 9. Financial projection and needs
 10. Exhibits and appendices
Unit 5

 Launching a New Venture: Steps

involved in launching a business
(Process charts), Various Forms of
business ownership, Registration of
business units; start-up to going IPO;
revival, exit and end to a venture
Various Forms of business
ownership
 Sole Proprietorship
 A sole proprietorship is a for-profit bu
siness owned by one person
. The owner may operate on his or
her own or may employ others. The
owner of the business has unlimited
liability for the debts incurred by the
business.
 Partnership
 A partnershipis a form of for-profit b
usiness owned by two or more peopl
e
. In most forms of partnerships, each
partner has unlimited liability for the
debts incurred by the business.
 Company
A company is a limited liability business that
has a separate legal personality from its me
mbers
. The company can be either privately-
owned or government-owned, and privately
the owned companies can organize either
for-profit or not-for-profit.
 A privately-owned, for-profit company can
either be privately held or publicly held. A
for-profit company’s shareholders elect a
board of directors to direct the corporation
 Cooperative Society
 Often’ referred to as a “co-op,” a cooperative is
a limited-liability business that can be
organized for-profit or not-for-profit.
 A for-profit cooperative differs from a for-profit
corporation in that it has members, as opposed
to shareholders, who share decision-making
authority.
 Cooperatives are typically classified as either
consumer cooperatives or worker cooperatives.
Cooperatives are fundamental to the ideology o
f economic democracy
.
 State Enterprise or Government
Company
 Generally, an enterprise owned by th
e state is known as a state-owned en
terprise, state enterprise, or govern
ment company
.
 For the expansion of the business,
rapid industrialization and
development, and to remove
How a startup goes from idea to IPO

 https://
www.wamda.com/2013/10/startup-id
ea-to-ipo-infographic
 What is IPO
 IPO stands for Initial Public Offering.
IPO is a process in which a Private
company sells her share to the
public for the first time. After
Becoming a Public limited company
the share of a company can trade on
Different Stock Exchanges. Thus
Initial Public Offer is the process to
become a Public Company from a
 Advantages Of IPO
 The number of benefits of launching an IPO is that you
can raise a lot of money for the Company.
 IPO gives your company more Public Exposure. When
your Company listed on Stock Exchanges this will
reach a lot of people. So it will give your company
more publicity.
 IPO also reduces the cost of Capital because in
Publically raised money you don’t have to pay the
interest to anyone.
 Initial Public Offer also provides an opportunity for
existing Stakeholders to take existing.
 After Becoming a public limited company it becomes
easy to do mergers and acquire other companies.
 Disadvantage Of IPO
 It will take a lot of time to issue Initial Public Offer. It will take 6 months to 1
year for launching an IPO.
 After Becoming a Public limited company you have additional regulatory and
disclosure.
 It will pressurize your company to gain more profits.
 IPO Involves a cost you have to pay underwriter fees & audit fees etc. So it
also very costly.
 In IPO, the share will be given to the public. So there is also a risk of losing
potential control.
 Cost Of IPO
 IPO is a costly process. If you want to launch Your IPO you have to bear a lot
of expenses. Firstly have to pay underwriters’ fees. Underwriters fees
depend on the size of the Company and the risk profile of the company.
 It also depends on the total value of the IPO. Underwriters fees will be
somewhere between 2.5% and 5% of IPO Value. After paying underwriters
fees you also have to pay An Audit fee. There is also a fee of listing on Stock
Exchanges. These fees will 50000 or more than 50000. It depends on the
paid-up capital of the company. There is also a yearly fee of listing.
 Why launch an IPO?There are mainly two
main reasons to launch an IPO is to raise
capital and to enrich prior investors. By going
public, your firm gets access to a ton of
investment opportunities.
 What is the purpose of an IPO?IPO is simply
the shares of stock issued by a company to the
public for the first time. Its full form is Initial
Public Offering. IPO’s main purpose is to give a
part of the ownership of the company to the
relevant investors in return for
money/investments in your company.