HOW TO RESEARCH A BUSINESS IDEA

 The process of determining either the success or failure of one’s business idea takes the following steps;

1. The idea stage

This involves getting the idea and imagining the possibilities. Market research is conducted. One can gather information from industry associations, web searches, magazines, newspapers, government departments, e.t.c

HOW TO RESEARCH A BUSINESS IDEA

The aim is to gain a general sense of the type of customers one’s products or services will serve.

The research plan should spell out objectives and give the entrepreneur information that he or she needs to go ahead with the idea. The entrepreneur should utilize experts in planning and conducting research sessions.

2. Idea analysis

This involves evaluating the idea that has been generated. The idea can be looked at from four perspectives, i.e company, customer, competitor and collaborators as discussed below.

- Company

One can think of an idea in terms of its product/service features, the benefits to customers, the personality of the company, what key message he or she will be relaying and the core promises to be made to customers.

- Customer

There are 3 different customers in relation to someone’s idea. These are purchasers (those who make a decision to buy and pay), influencers (individuals or organizations or group of people who influence the purchasing decision) and end users.

- Competitors

These are people or organizations providing products or services that serve the same purpose. These can be primary, secondary or tertiary competitors depending on how often someone’s business will compete with them.

- Collaborators

One can think of organizations and people who may have interest in his or her business but are not directly paid for any success of the business such as associations, media and other organizations that sell to final consumers.

- SWOT analysis

Analysis of the strengths, weaknesses, opportunities and threats of the product will enable the entrepreneur to understand whether the product/service will make it in the current environment.

3. Checking out the competition level

One can talk to his/her competitor’s customers and ask them what they like or do not like about the competitor’s product/service. The aim is to understand what the competitor is doing so that he/she can do it better.

4. When the idea looks like a flop.

After the first three steps, someone may find out that his/her idea is the one with holes. This does not mean that he/she needs to scrap the whole thing and resign him/herself as an employee. Sometimes it may need to be re-worked. One needs to take time and re-focus his/her energies and determine why the idea needs some tightening.

This could be the best predictor of future success.

5. When the idea is ready to go.

The market research conducted should be a good indicator of where one needs to go next with the idea. The key factor one needs to consider is pricing. For products that have close competitors, one should set prices with respect to the competitive position. If the pricing structure is not working one can alter it.

If possible he/she can test different pricing offers as he/she goes and determine what works best.

REASONS FOR GENERATING BUSINESS IDEAS

1. Need for an idea.

A good idea is essential for a successful business venture, both when starting a business and to stay competitive afterwards.

2. To respond to market needs

A business can be successful if it provides new products or services or manages to reach a new group of clients or finds a new channel to reach the customers better.

3. To respond to natural threats and scarcities.

New innovative business ideas in water harvesting, irrigation, weather forecasts, improved farming practices, insurance and finance help a business (farmer) adapt to changes in the natural environment.

4. To change fashions and requirements

This helps the entrepreneur to respond to demand with new ideas, products and services.

5. To stay ahead of competition.

An entrepreneur needs to cope up with new ideas, products and services so as to outcompete his or her rivals/competitors.

6. To exploit technology to do things better.

Technology is a major competitive tool in today’s markets. Therefore for a firm to be innovative, generation of business ideas is crucial.

7. To respond to the product life cycle.

As the product life cycle chart indicates, even new products eventually become obsolete (out modeled). Therefore there is need to plan for new products and their growth with necessitate generation of business ideas.

8. To spread risk and allow for failure.

Some new products may fail. Therefore it is necessary for firms to try to spread their risk and allow for failures that may occur from time to time by constantly generating new ideas.

9. To give help to specific groups of people.

Help can be given to the elderly, disadvantages and those with disabilities. New fields in tourism are emerging, accessible tourism for older and disabled travelers, eco-tourism for those who want to protect the environment, e.t.c.


 IDENTIFICATION PROCESS FOR A GOOD BUSINESS OPPORTUNITY

Going into business is deceptively simple but staying in business and making a success of it is not. Success or failure are not the chance results of a toss of a coin.

Being in the right place at the right time is partly luck but more so to do with good planning.

IDENTIFICATION PROCESS FOR A GOOD BUSINESS OPPORTUNITY


Therefore setting up a business for the first time or expanding an existing business can be the road to riches and personal fulfillment.

It can also be the road to financial ruin and personal misery. Successful businesses are a result of careful research, planning, enthusiasm, self confidence and commitment.

If an entrepreneur identifies a business opportunity, it is ideal to carry out a feasibility study in order to ascertain whether the opportunity is viable/profitable.

It also acts as a basis upon which financial assistance can be sought from the financial system. It can be broken into 3 categories, i.e market feasibility study, technical feasibility study and financial feasibility study.

1. Market feasibility study

(i) Market study. This focuses on the overall market demand.

(ii) Product description. This involves understanding in detail the product one wishes to produce, identification of users and the standards that it will fulfill.

2. Technical feasibility study

This determines the adequacy of the manufacturing process, plant and machinery to be used for production of a given product within the framework of predetermined quality, raw materials and time used without long or expense breakdown problems.

3. Financial feasibility study

This part reveals how attractive or hopeless the business idea is from the financial point of view. The financial feasibility is divided into six major components, i.e;

- Project costs

- Means of finance

- Capacity utilizations and income estimation

- Expenditure estimates

- Profitability estimates

- Risk analysis

QUALITIES OF ATTRACTIVE BUSINESS OPPORTUNITIES

1. Good income potential. A good business opportunity is one which is capable of giving sufficient income to support oneself. It should be able to produce a good, steady and full-time income.

2. Sizeable market gap in terms of people or institutions willing and able to purchase goods and services of a business.

3. Low or moderate start up capital. A good business opportunity is the one which requires low capital investment.

4. Good growth potential. An attractive business opportunity is one which has the chance to survive for a long period of time while generating sufficient income to the owner.

5. Reasonable ease of entry into the market. It is advisable that one should enter into a business in which he/she has got the general background of it. This enables the entrepreneur to get started easily. For instance one can be able to use the contracts one already has and one’s reputation in the field could be valuable in running the business successfully.

6. Related to one’s skills and experience. Some businesses require certain skills and experience. This means that for one to succeed in such businesses, one should possess the required skills and experience needed to run the business successfully.

7. Properly timed. A good business opportunity is the one that is timely and responds to the unsatisfied needs or requirements of customers who have the ability to purchase and are willing to pay.

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