The Search for a SOUND BUSINESS IDEAS.pptx.pptx
- 1. The Search for a SOUND BUSINESS IDEAS
- 2. The first challenge for a new company is to establish at least an identity in the market it desires to serve. An established company, on the other hand, has a different issue; it has to expand or at the very least keep up its competitive position. THE SEARCH FOR A SOUND BUSINESS IDEAS
- 3. A sound business idea may be defined as the economic opportunity which is within the reach of the entrepreneur, and which will provide him with a desirable value. What is a Sound Business Idea? SOUND BUSINESS IDEA New Venture Successful Market Entry Established Business Success in Competition
- 4. Gaining an advantage over competition ensures a company's survival and expansion. This can be accomplished in the following ways: better performing; more economically viable; reduced cost of purchase; higher salvage value (amount that an asset is estimated to be worth at the end of its useful life); more uses; more easily available; and less susceptible to obsolescence What is a Sound Business Idea?
- 5. The product or service offering may be improved in terms of: 1. Performance - how well a service delivers its value. 2. Maintenance cost - expenses incurred to keep assets in optimal working condition. 3. Acquisition cost - total amount of money spent by a company or individual to acquire assets, customers, or property. 4. Salvage value - estimated value of an asset after its useful life is over. 5. Uses - proper utilization of product and services. Importance of Sound Business Ideas
- 6. Anyone with a connection to the company can come up with business ideas, but it's crucial to select the one that best fits the goals and available resources of the company. Therefore, a process needs to be modified. The steps in the proposed procedure are as follows: 1. preparation of the list of business ideas; 2. screening of the listed ideas; and 3. final selection. Procedure in Determining the Best Business Idea
- 7. There are two general methods of generating business ideas. They are as follows: Methods of Searching for Ideas
- 8. Unanticipated Means 1. The Person’s Work. Workers who interact directly with consumers can encounter requests for goods or services that the business does not now offer. To the enterprising employee, this may be interpreted as an opportunity for entrepreneurship. 2. The Person’s Hobbies. There are times when a person’s hobby turns out to be a business opportunity. A hobby is useful means of developing some skill which could be useful later when the hobbyist decides to operate a business. Methods of Searching for Ideas
- 9. Unanticipated Means 3. The Person’s Acquaintances. Sometimes someone needs another person to point out the wisdom of launching a new company. This other person may be a friend, a neighbor, or just an individual he meets once in a while. 4. A Chance Event Encountered by the Person. There are times when a person encounters an event that will provide him with a clue to a business venture. Methods of Searching for Ideas
- 10. Deliberate Search 1. Using Search Questions. It is expected that business ideas will address certain needs. Asking the correct questions can lead to answers. "Search questions" are inquiries that are meant to get particular responses. Ex. What will motivate the consumers to buy my product instead of the competitor’s products? 2. Idea Prompting. Encounters with someone else’s idea, or customer request, or some other event may provide hints or cues leading to business ideas. Methods of Searching for Ideas
- 11. The search for a sound business idea calls for the preparation of a list so the best can be selected. Before selection is made, however, the ideas listed must be screened first. Business ideas may be screened with the use of the following criteria: Screening Generated Ideas k e t F e a s i b i l i c a l F e a s i b i F i n a n c i n g F i n a n c i a l CRITERI A
- 12. Market Feasibility A business idea must pass the test of market feasibility. This means that there must be some positive indication about the following: 1. Stable and efficient demand. If there is not enough demand for the product or service being considered, the business idea will fail. Demand must large enough to justify the investments that will be needed by the venture. 2. Potential competitive strength of the firm. The competitive strength of the competitors must be determined in terms of product offerings, price, distribution methods, promotion methods, and others. The strong business idea must be strong enough to withstand competition. Screening Generated Ideas
- 13. Technical Feasibility Business concepts frequently seem to work, but when they are turned into actual goods or services that meet the necessary standards for quality or quantity, this is not always the case. Unstable material supplies, irregular or fluctuating power supplies, and other issues could be production challenges. However, before giving the business more thought, technological issues like those need to be resolved. Screening Generated Ideas
- 14. Financing Feasibility One of the factors necessary in determining whether a business should be considered or not is financing. This means that there must be sufficient funds to finance operations. In general, the sources of financing include: (a)the proposed owner’s savings, (b) relatives and friends, and (c) financing institutions. Screening Generated Ideas
- 15. Financial Feasibility The purpose of entrepreneurship is to provide a source of income of the entrepreneur. This will not be possible if the venture will not be profitable. The business idea's financial feasibility determines how profitable it is. Analyzing the proposed company idea's financial prospects might help establish its financial feasibility. Screening Generated Ideas
- 16. The purpose of screening is to eliminate from the list the generated business ideas that did not pass the adapted criteria. After screening, the list may appear to be any of the following: 1. Status Quo Listing. It means all business ideas listed passed the adapted criteria. 2. Short List. Means some of the ideas generated were eliminated. 3. Zero Listing. Means all business ideas generated were eliminated. Final Selection
- 17. Successful innovation ensures the company's ongoing survival and expansion, but innovation can only flourish in an innovative company with a culture that embodies the following traits: 1. Encouragement of creativity and risk-taking • creativity refers to activities involved in finding solutions to problems that hinder the achievement of the firm’s objectives. • in a creative environment, solutions to problems are expected to come by more easily. Innovation will thrive in an organization that encourages creativity. Organizational Culture and Creativity
- 18. 2. Rewards for creativity • when an activity is rewarded, there is an assurance that such activity will continue existing. Creativity is no exception. 3. Open Communication • the free-flowing exchange of ideas between the members of an organization is referred to as "open communication”. • an important advantage of open communication is that problems are easily directed to persons with the ability to offer solutions. Organizational Culture and Creativity
- 19. 4. Allowance for Errors • it is not right to expect any activity to be devoid of imperfections. When an error is detected, a move should be made to correct it. 5. A Climate of Participation • the firm will benefit from the good effects of employee participation. This is so because there is a chance that more bright ideas will be generated if employees feel free to participate in the creation of solutions to problems. Organizational Culture and Creativity
- 20. 6. Structural Mechanisms that Aid Creativity • if the company has structural procedures in place to support the exercise, the innovative individual would be more inclined to follow their impulse to come up with answers to challenges. 7. Training in the Creative Process • some persons have natural talents for generating business ideas, those who are not considered as such would benefit from acquiring the required skills through training Organizational Culture and Creativity
- 21. 8. Flexibility • the creative employee is allowed to engage in creative activities on hours most convenient to him and to the company. • flexibility may also be applied to the place of work, like allowing the creative employee to work in the place where he feels he can be more creative. Organizational Culture and Creativity