Module 2 Flashcards
(15 cards)
Steps in the Entrepreneurial Process?
- Idea Generation
- Opportunity Identification
- Opportunity/Business Concepts Development
- Resource Identification and Acquisition.
- Harvesting the business venure
Describe each step of the process!
- The first step in the entrepreneurial process is idea generation, which is the foundation of any business venture. This stage involves brainstorming and thinking critically about potential business ideas that can solve problems or meet consumer needs.
- Once an idea is generated, the next step is opportunity identification. In this phase, entrepreneurs analyze the idea to determine if it presents a true market opportunity. Opportunity identification involves assessing market conditions, target audiences, competition, and industry trends to
validate the potential for success. success. This step requires a deep understanding of the market and the
ability to spot trends or gaps where the idea can meet demand. Entrepreneurs may conduct
market research, surveys, and competitor analysis to evaluate the feasibility of the idea and its
potential to solve a real-world problem. - With the opportunity identified, the next step is to develop the opportunity into a concrete
business concept. In this phase, the entrepreneur refines the idea and begins to develop a clear
and structured plan for the business. The business concept includes the mission and vision of the company, its value proposition, and a detailed outline of the products or services it will offer. - The next crucial step in the entrepreneurial process is identifying and acquiring the resources needed to launch and sustain the business. Resources are varied and can include financial capital, human resources (such as employees or business partners), technological tools, and physical
assets like equipment or office space. Entrepreneurs often start by estimating the initial costs of
setting up the business, considering both fixed and variable expenses. - With the resources in place, the next step is the implementation and management of the business
venture. This phase involves putting the business plan into action. It begins with setting up the
legal and operational frameworks necessary for the business to start operating, such as registering the company, obtaining licenses, and establishing a business structure. - The final step in the entrepreneurial process is harvesting the business venture, which refers to
realizing the financial and personal rewards from the business. This stage can take several forms,
depending on the entrepreneur’s goals and the maturity of the business. Harvesting typically involves selling the business, merging with another company, or taking the business public
through an Initial Public Offering (IPO).
What are some idea generation processes?
Brainstorming is one of the most common and widely used techniques for idea generation. It encourages the free flow of ideas without judgment, allowing individuals or
groups to build on each other’s contributions. Typically, a group is assembled to focus on a problem, and participants suggest ideas as quickly as possible.
Focus Groups consist of a small group of people who are representative of the target
market or user base for a product or service. They are asked to discuss a particular topic, issue, or problem in depth.
Check List Methods involve the use of predefined lists of questions or prompts designed
to spark creative thinking. These checklists often include questions like “What if this could be done differently?”
Problem Inventory Analysis is a systematic method where individuals identify problems or unmet needs within a particular domain. By compiling a list of known issues,
potential solutions can then be generated to address these challenges.
Scenario Thinking involves envisioning various future scenarios, both plausible and far-
fetched, to explore how the landscape could change. This method is valuable for thinking
long-term and can help generate ideas for products, services, or innovations that address
future trends or challenges.
What are some features that can be used to distinguish between idea and opportunity?
Market Demand: Basically, if there isn’t a need for it, it remains just an idea, if there is a need it is an opportunity.
Ability to Generate Revenues: Another important distinction is the potential for generating revenue. An idea may have the promise of revenue generation but lacks a clear path for achieving it. Opportunities, however, are ideas that not only have a demand but also have a strong potential for creating revenue streams.
Availability of Technology and Resources: For an idea to be turned into an opportunity, it must
be feasible within the context of available technology, financial resources, human capital, and
physical infrastructure. An idea may sound great, but it could be unrealistic if the necessary
technology or resources are not readily available, or if the required investment is beyond reach.
What are some sources for Entrepreneurial Opportunities
Changing demographics, Emerging markets, new technologies, social changes, political and regulatory changes, emerging markets.
How does one evaluate an opportunity?
Market Issues: A deep understanding of the target market is essential for evaluating an opportunity. This includes identifying the size and growth potential of the market, understanding customer needs, and assessing whether the market is saturated or underdeveloped. Entrepreneurs need to determine if the market is ready for the product or service, and whether there is room for growth.
Economic Issues: Economic factors, such as the availability of capital, financial projections, cost structures, and potential returns, play a major role in evaluating an
opportunity. Entrepreneurs need to assess the financial viability of the opportunity, including initial investment requirements, operating costs, and projected profits.
Competitive Advantage Issues: A critical aspect of opportunity evaluation is determining whether the opportunity can provide a competitive advantage in the market.
This involves assessing the strength of the competition, barriers to entry, and the potential for differentiation.
Management Issues: The success of an opportunity also depends on the ability of the management team to execute the idea effectively. Entrepreneurs need to evaluate the
skills and experience of the team, as well as their ability to execute the business plan and adapt to unforeseen challenges.
What is a business concept
A business concept is a clear and concise description of the core idea behind a business. It encapsulates the fundamental aspects of the business, including what the business intends to offer, how it will deliver value to customers, and the market it will serve. In essence, a business concept is the foundation upon which the entire business is built, outlining its purpose, the
problem it aims to solve, the products or services it will provide, and the target audience it will
serve.
What are the parts of a business concept?
Value Proposition: The business concept must articulate the unique value the company will provide to its customers.
Product or Service Offering: This element defines what the business will actually provide to the market.
Target Market: The business concept should identify the specific group of customers that the business will target.
Revenue Model: The concept should outline how the business will generate income. This could involve traditional sales of products or services, subscriptions, licensing.
Competitive Advantage: To be successful, the business concept should also outline how
it will compete within the existing market. This could involve technological advantages,
cost advantages, brand strength, customer loyalty, unique intellectual property, or other
factors that will help the business stand out and succeed against competitors.
Feasibility: A good business concept must also have a practical component, which assesses whether the idea is feasible in terms of available resources, technology, and market conditions.
Why is a business concept important?
Clarity of Purpose: It provides entrepreneurs with a clear vision of what the business is about and helps in decision-making.
Attracting Investors: Investors and stakeholders require a clear, concise business concept to determine whether the idea is worth backing.
Guiding the Business Strategy: The business concept serves as the foundation for business planning and strategy development.
Mitigating Risk: By thoroughly developing a business concept, entrepreneurs can identify potential risks early on and take steps to address them before launching the
business.
What are some SOURCES of business concepts?
New Products: Innovation in product design, features, or functionality can lead to new business concepts. These products might improve upon existing offerings or introduce
entirely new solutions that meet consumer needs.
New Services: The introduction of a novel service offering, whether a new type of healthcare service, a financial advisory service, or an on-demand transportation service,
can create business opportunities.
New Processes: Innovations in processes, whether in manufacturing, distribution, or
service delivery, can lead to business opportunities.
New Markets: Entering new markets whether geographic, demographic, or niche markets often sparks new business concepts.
What are the important resources needed for a business?
Skilled Employees: Every business requires a team with the right mix of skills and expertise. Entrepreneurs need to assess the level of expertise required for each role in the
business, from technical specialists to general management professionals.
General Management Expertise: Effective leadership is crucial in guiding the business towards its goals. General management expertise includes strategic planning, decision- making, operations management, financial management, and organizational development.
Marketing and Sales Expertise: For a business to succeed, it must be able to effectively reach and engage customers. Marketing and sales expertise are vital in identifying market opportunities.
Financing: Capital is a critical resource for any business. Financing is needed to cover
initial startup costs, day-to-day operations, and potential expansion. This might include
personal funds, loans, or external investment from venture capitalists, angel investors, or
other funding sources.
Distribution Channels: For a business to deliver its products or services to customers, it
must have efficient distribution channels.
What are sources of required resources for a venture?
Personal Equity: Entrepreneurs often invest their personal savings or assets to fund the
business.
Family and Friends: Many entrepreneurs turn to family members and friends for
financial support or as a source of capital.
Debt: Borrowing money from banks, financial institutions, or private lenders is a common way to raise capital for a business.
Outsourcing: Outsourcing is a strategy where a business hires external parties to handle
certain functions or services, such as customer support.
Leasing: Leasing allows businesses to acquire equipment, machinery, or real estate without having to make an upfront purchase.
What is the role of local and regional business and entrepreneurial development organizations in providing resources?
Access to Financing: Many entrepreneurial development organizations offer financial
support through grants, loans, or equity investments.
Mentorship and Guidance: These organizations often provide mentorship programs,
where experienced entrepreneurs or industry experts offer advice and guidance.
Training and Capacity Building: Business development organizations frequently offer
training programs to help entrepreneurs improve their skills in areas such as business
management, marketing, and financial planning.
Networking Opportunities: These organizations often host events, conferences, and
trade fairs where entrepreneurs can network with potential customers, partners, investors,
and other stakeholders.
what are the steps in implenting a business venture
Implementation of Concept: This refers to the process of turning a business idea or
concept into a functional operation. It involves putting the plans into action, such as
setting up operations, securing the necessary resources
Monitoring of Performance: Once the business is up and running, continuous
performance monitoring is essential to track whether the venture is achieving its goals.
Honoring of Obligations to Resource Providers: A successful venture must prioritize
fulfilling obligations to its resource providers, including investors, suppliers, employees,
and other stakeholders.
Reinvestment in the Business: Reinvestment involves putting profits back into the
business to foster growth and expansion.
Expansion of the Business: As the business matures and gains traction, expansion becomes a viable option for growth.
Achievement of Performance Goals: Achieving performance goals is the culmination
of effective business management.
How does one harvest ventures?
Absorption of New Concept/Product Line into Operations: This strategy involves
incorporating a new product, service, or idea into the existing operations of the business,
rather than starting a new venture.
Licensing of Rights: Licensing is a strategy in which a company grants another party the
right to use its intellectual property (IP) such as patents, trademarks, or proprietary
technology, in exchange for royalties or other payments.
Family Succession: Family succession is a strategy where a business is passed down
from one generation to the next within the same family, ensuring the continuation of the
business legacy.
Go Public (IPO): Going public involves a business offering shares of its stock to the
public for the first time through an Initial Public Offering (IPO). This allows a company
to raise capital from a broad range of investors, providing funding for expansion and
growth.
