Module 2

Establishing a Venture
BUSINESS IDEA AND OPPORTUNITY
a. Business ideas and business opportunities are similar in the fact that
they’re both concepts.
b. But the key difference between a business idea and a business
opportunity is that business ideas are unproven concepts while
business opportunities are proven concepts.
 A BUSINESS IDEA
• A business idea is a concept that can be used to make money.
• Usually, it centers on a product or service that can be offered for money.
• An idea is the first milestone in the process of launching a business.
• Every successful business started as someone’s idea.
• Although a business idea has the potential to make money, it has no
commercial value initially.
• In fact, most business ideas exist in abstract form; usually in the mind of
their creator or investor, and not all business ideas, no matter how
brilliant they may seem, would end up being profitable.
• To find out about an idea’s chances in the market and check its
innovative content and feasibility, you need to conduct a credibility
check
BUSINESS IDEA - CHARACTERISTICS
• A promising business idea must have the following characteristics:
A) Relevant (must fulfill customers’ needs or solve their problems)
B) Innovative
C) Unique
D) Clear focus
E) Profitable in the long run
• The acceptability and profitability of a business idea joint largely on
how innovative and acceptable the idea is.
A business ideas are unproven concepts
BUSINESS OPPORTUNITY
• A business opportunity on the other hand is a proven concept that
generates ongoing income. In other words, a business opportunity is a
business idea that has been researched upon, refined, and packaged
into a promising venture that is ready to launch.

• While multiple business ideas may strike you on a daily basis, only few
of them will be profitable in the long run based on market research
and feasibility study conducted. These few are the real business
opportunities.
 BUSINESS OPPORTUNITY
• An opportunity is regarded as one after it has been found to meet the
following criteria:
a)It must have high gross margins.
b)It must have the potential to reach break-even cash flow within 12
months – 36 months.
c)The start-up capital investments must be realistic(it shouldn't be huge)
and within the range of what you can provide.
d)You must have the strength and ability needed to drive the business to
success.
e)Your level of enthusiasm for the business must be very high.
f) It must have the potential for residual income after expenses
g) It must have the potential to keep on improving with time.
BEFORE STARTING YOUR OWN
BUSINESS
• Does the idea fire your motivation and is it adequate enough to keep
you going for the next one to two years?
• Is it a viable business proposition in your area?
• Does it match the needs of your clientele, local or otherwise?
Check it out with basic market research.
Test it out in the market.
Consult with experts.
Look out for competition in the field.
Is it a sunrise industry?
A sunrise industry is one that is new or relatively new, is growing fast,
and is expected to become important in the future.
BUSINESS OPPORTUNITIES - FILTERED
THROUGH A FIVE-LAYER SIEVE
• Researching your industry- how can you learn more about your chosen
industry and about the resources that are available to help you?
• Market assessment- is there a market for your product or service? If so,
how much income can you expect to derive from it?
• Profitability assessment- how much will starting a new business cost
you? Can you afford a lengthy "red ink" period following start-up, as
well as periodic breaks in cash ? Can you afford to fall?
• Financing assessment- will you be able to obtain the necessary
financing for your business? If so, from where?
• Legal assessment- what potential legal liabilities are you exposing
yourself to by starting a new business? Are the costs of protecting
yourself worth the trouble?
Importance Of A Business Opportunity

• The chance to build a business

• The chance to avoid failure
• The chance to grow
• The chance to maximize profits
Types of business opportunity
• Untapped resource opp
• Technology (new)
• Competitive
• Strategic partnership opp: A strategic partnership opportunity
involves the chance to collaborate with businesses from
complementary industries, allowing them to access new resources,
strengthen their product offerings, and increase their
competitive advantage.
IDEA GENERATION IS A CREATIVE
PROCESS
• Creativity means bringing something new into existence.
• Creativity refers to the ability to produce work in a novel(unique),
original and unexpected way in an appropriately useful manner.
• Creativity is a process that leads to the evolution of an idea.
• Those ideas are further enhanced and developed by the
entrepreneurs
IDEA GENERATION
• Ideas are the key to innovation. Without them, there isn't much to
execute and because execution is the key to learning, new ideas are
necessary for making any kind of improvement.

• It's obvious that ideas alone won't make innovation happen, as you need
to be able to build a systematic process for managing those ideas. The
point of ideation isn't just about generating tons of them but about
paying attention to the quality of those as well.

• We agree that it can sometimes be difficult to come up with more of

those high-quality ideas. It’s not unusual to get stuck in our old habits
and routines when we’re supposed to be creating something new.
IDEA GENERATION PROCESS
• Idea generation is described as the process of creating, developing
and communicating abstract, concrete or visual ideas.
METHODS/ Techniques OF GENERATING
IDEAS
• Focus groups: Groups of individuals providing information in a structured format.
• Brainstorming: A group method for obtaining new ideas and solutions.
• Brain writing: Brain writing is a form of written brainstorming.
• Problem inventory analysis: A method for obtaining new ideas and solutions by
focusing on problems.
• Mind Mapping: It is a technique of presenting information.
• Focus Groups: These are group of individuals who provide information using a
structured format. Normally, a moderator will lead a group of people through an
open and in depth discussion. The group members will form comments in open-
end in-depth discussion for a new product area that can result in market
penetration. This technique is an excellent source for screening ideas and concept
• Observation
• Emerging Trends: The example is based on the population within your
area may be getting older and creating demand for new products and
services.
• Research and Development: Research is a planned activity aimed at
discovering new knowledge, with the hope of developing new or
improved products and services. Researching new methods, skills and
techniques enable entrepreneurs to enhance their performance and
ability to deliver better products and services
• Other Techniques: This can be achieved by reading relevant trade
magazines and browsing through trade directories. These may include
local, national and foreign publications.
HOW TO IDENTIFY A BUSINESS
OPPORTUNITY?
• The Customer Research Stage
• Problem Hypothesis Stage
• Product Hypothesis Stage
• Market Hypothesis Stage
• Product Development Stage
THE CUSTOMER RESEARCH STAGE
• The first step is to research customers and their problems by asking
questions related to the customer’s needs, goals, and expectations.
• This involves collecting, organizing, and analyzing information about
customers’ behavior as well as their needs.
• The past and present trends of the target market must also be
identified to help businesses better understand customer preferences.
• The objective is to identify potential business opportunities that can
help the business create value for its customers.
PROBLEM HYPOTHESIS STAGE
• In this stage, businesses search for problems by identifying issues and
concerns from customer feedback and other sources of market
research. The first step is to define the problem.
• Once that has been done, businesses need to search for the root
cause of the problem and explore possible solutions. The goal is to
formulate a well-focused hypothesis that can be tested with market
research.
PRODUCT HYPOTHESIS STAGE
• Businesses should determine what kind of product or service will
solve customers’ problems or address their needs. The product or
service should target specific customers based on the information
gathered during the customer research stage.
MARKET HYPOTHESIS STAGE
• The market hypothesis stage involves testing certain key assumptions
about the business opportunity with customers to determine the
demand for a particular product or service in the real world, and how
it solves problems in the specified market.
• It also involves doing in-depth research to identify existing players in
the targeted market, and determining customer expectations for the
product or service.
PRODUCT DEVELOPMENT STAGE
• Once a business opportunity is confirmed, the next step is to develop
a product or service that will solve the problem.
• The product or service should be designed and tested using various
methods to ensure its viability and effectiveness.
• Businesses need to consider their target market, competitive threats,
and business models as they develop the product or service.
CREATIVE PROBLEM SOLVING
• A method for obtaining new ideas focusing on the parameters.
a)Brainstorming, is probably the most well known and widely used both
for creative problem solving and in idea generation.
b) Reverse brainstorming: A group method for obtaining new ideas
focusing on the negative (how it can fail)
c)Checklist method: Developing a new idea through a list of related
issues
REFINE AND DEVELOP IDEAS
GET FEEDBACK AND EVALUATE THE
IDEA
• Preferably from diverse points of view and people who can look at the
idea objectively and critically. The purpose here is primarily to serve
as a reality check and point out obvious issues in the idea and the
assumptions it relies on.
• However, when there are more ideas than resources for
implementing them, which is usually the case, you need to choose
which ones to refine and work on, and which ones to put on hold.
• That’s where idea evaluation comes into play.
REFINE THE IDEA
• Refine the idea into something more practical based on the
feedback. In most cases, this is something like a project plan, a
business case, or a product concept. At first, these are often at a very
high-level, but as the idea gets more and more refined, so does the
level of practicality here.
TESTING ASSUMPTIONS
• Test assumptions in the real world to remove uncertainty. For most
ideas, this is a crucial but often neglected step. Every idea comes with
assumptions built-in, such as “we can build this” and “people will buy
this”.
• While some are more important than others, it is important to figure
out what your assumptions are, and then eliminate the biggest and
most obvious ones
RINSE AND REPEAT
• For simple ideas, it might be enough to go through the above steps once and then be
done with it, but for more complex ideas, that just isn’t feasible. You will need to go
through the process multiple times, with each iteration gradually refining the idea
into something that is useful and practical.
• FEEDBACK AND EVALUATION
• For feedback and evaluation, you’re looking at tools that help you effortlessly expose
your idea to others, be it people within your organization, or outside of it.
• The purpose of refining an idea is a to turn it into a practical plan or concept and
eliminate some of the uncertainty related to that.
• To summarize, the purpose of the process is to:
a)refine the idea into a more practical plan or concept
b)eliminate uncertainty from the plan or concept by testing it
BUSINESS OPPORTUNITY VS BUSINESS
IDEA!!!
• A business opportunity is different from a business idea; the latter is
based on the former.

• Business opportunities are identified when companies find issues or

problems in existing markets, untapped needs, untapped technologies,
customer feedback, market research and other sources of information.

• Business ideas are typically created through creative thinking by

entrepreneurs who try to capitalize on business opportunities by
exploring ways to solve certain problems.
SWOT ANALYSIS
• The person making the analysis; lists their own personal Strengths and
Weaknesses (i.e. those factors which are a part of themselves) affecting
the proposed business. They also examine and list the Opportunities and
Threats (i.e. the external factors) which might affect both them and the
business.
For example:
• Strengths: Sales skills, good technical product knowledge, enthusiasm.
• Weaknesses: No knowledge of accounts, poor computing skills.
• Opportunities: Offer of cheap premises, existing customer base.
• Threats: Lack of working capital, strong local competition.
APPLYING SWOT ANALYSIS
• In view of the subjective nature of the SWOT analysis, it is quite
possible for people to under –or- overestimate their personal skills
and capabilities.
• Ideally the person carrying out the analysis should ask another person
(preferably one with objective insight into the business) to carry out
an independent analysis so that the results of the two can be
compared, evaluated, and if necessary mediated.
• The SWOT analysis is a useful element to include in a business plan,
and is becoming a key requirement to meet the criteria of a number
of lending banks.
 DESIGN THINKING
• Design thinking refers to the set of cognitive, strategic and practical processes used by
designers and to the body of knowledge that has been developed about how people reason
when engaging with design problems.
• “Creativity is seeing what everyone else has seen, and thinking what no one else has thought.”
-Albert Einstein
• The main goal of the process is to create a final product or service that fulfills end-users’ needs.
• Observe & empathize
Why do people behave as they do? Why are things the way that they are? What is working
well, what is not working well and why? Asking these questions with an open and inquisitive
perspective
Define the problem
Ideate solutions
Now that we better understand the target audience and the ins and outs of the problem, it’s
time to generate ideas to solve it.
Prototype and test.
Example: car parking ,
DESIGN THINKING: process
1.Empathy
Customer discovery – identify problems and frustration
Gather information
Customer empathy map
2. Ideation
Define the problem – different them what we thought ( need)

Ideate – Solutions
3. Experimentation
Prototype - minimum viable product (lowest form people will accept) – sample
questionnaire
Mile markers to be created and crossed
4. Testing
Feedback – test assumptions
5Cyclic process to refine the products/services
CUSTOMER EMPATHY MAP
BUSINESS MODEL CANVAS
BUSINESS MODEL CANVAS