BUSINESS IDEA GENERATION(Article one)
A good business idea is essential for a successful business venture. However, good business ideas do not usually just occur to an entrepreneur. Rather, they are the result of hard work and effort on the part of the entrepreneur in generating, identifying and evaluating ideas.
The first task of a dynamic entrepreneur is the generation of an idea that is new and appears to be worthwhile for further use. This involves a lot of creativity on the part of the entrepreneur. The business idea arises from an opportunity in the market. It originates from real demand for any product or service as such, an entrepreneur should have a keen and open mind to look for opportunities and generate business ideas.
Before starting an entrepreneurial venture it is important to ask the following questions?
- Do I have the entrepreneurial traits, abilities and skills of an entrepreneur?
- Which type and field of business is more suitable for me?
Traits and Skills of an entrepreneur
- Am I passionate about running my own business?
- Is it very meaningful and important to me, my family and the community?
- Am I enthusiastic about making my business a success and am I willing to put it before almost everything else?
- Goal orientation
- Am I able to see the big picture and to create clear goals for my business?
- Am I determined to direct all of my endeavours towards achieving my business goals?
- Making decisions
- When confronted with a difficult situation, am I able to keep calm, seek adequate information and make important decisions without postponing or passing the problem on to someone else?
- Taking risks
- Am I aware of the risks involved in running the business and do I accept the possibility that my business might fail?
- Have I sought adequate information so that I can honestly estimate how big a risk I am going to take?
- Ability to handle stress
- Am I able to maintain a positive spirit under pressure? Can I see opportunities in difficult situations?.
- Business management skills
- Am I good in some business management areas, such as marketing, sales, costing or staff motivation, etc.?
- Commitment to community
- Am I committed to the social advancement of the community as a whole?
It is important to look at the assessment areas above and decide which ones need improvement and growth your business success.
Type of business field
A field of business refers to an industrial category, such as farming, fishing, food processing, garments, construction, furniture, beauty salon, stationery, etc. Of essence is to ensure that your particular field of business also match your knowledge, skills and situation.
There are four main types of businesses:
Manufacturers are businesses that use raw materials, such as leather, waste material, wood, cloth or metal and make new or different products out of those materials. Some examples of manufacturing businesses shoemakers, dressmakers, furniture makers, paper producers and farm equipment manufacturers. If you know how to produce a good and to make something that is in demand and valuable to customers, you may want to go into manufacturing.
- Service Provision
Service providers are people whose businesses sell a particular service, such as transportation, tours, hairdressing, banking, deliveries, construction, repairs, cleaning, painting, nursing, etc. If you enjoy working with people and satisfying their specific needs, providing services may be your forte.
Wholesalers are businesses that buy large quantities of certain goods from manufacturers and resell those goods to retail outlets, who then resell them to individual consumers. If you are familiar with companies that make and sell their goods in bulk and you are good at establishing relationships with retailers, you may want to be a wholesaler.
Retailers purchase ready-made goods from wholesalers or suppliers for resale at a profit. Some examples of retail businesses are grocery stores, appliance stores, clothing stores, stationery shops, computer and mobile phone shops, etc. If you like meeting different people and you have access to a good location to open a shop, retailing may be a good option for you.
Selection of Business Idea (Idea Screening).
All the business ideas are screened on the basis of well-defined criteria to eliminate ideas which are not promising and select the best idea. While selecting the idea, the following facts should be considered:
(i) The idea should be compatible with the objectives and resources of the entrepreneur. It should also match his capabilities and skills.
(ii) The resources required for the idea such as capital requirements, technical know-how, raw materials, power supply etc. must be reasonably assured.
(iii) The cost structure of the proposed idea must enable it to realise reasonable returns on investment.
(iv) The effect of external environmental factors such as technological changes, state of economy, competition, etc. should be considered.
(v) The business idea should be consistent with the government policies, licensing requirements, environmental regulations, foreign exchange regulations, etc.