THE SEARCH FOR A SOUND BUSINESS IDEA

Topics: Income statement, Financial statements, Balance sheet Pages: 9 (760 words) Published: December 13, 2014
THE SEARCH FOR
A SOUND
BUSINESS IDEA

The product or service may be
improved in terms of:
1. Performance
2. Maintenance cost
3. Acquisition cost
4. Salvage value
5. Uses

Sound
Business
Idea

Sound
Business Idea
Economic opportunity which is within the reach of the
entrepreneur and which will provide him with a
desirable value.
• An entrepreneur who is well grounded in the concept
of sound business idea will be able to save time, effort
and money in pursuing his goals.

Sound
Business Idea

New
Venture

Established
Business

Successful
Market Entry

Success in
Competition

Figure 13. The importance of Sound Business Idea

Business Ideas differ in form. Examples of these
forms are the following:

1. An old type of business can be professionalized.
2. A standard product can be customized.
3. New technology can be adapted to manufacture an old
product.
4. Imported products can be replaced by local products.
5. Business operations can be internationalized.

Procedure in
determining the
best Business
Idea

Steps in the
proposed procedure
1.Preparation of the list of business ideas;
2.Screening of the listed ideas;
3.Final selection

Methods of
Searching for Ideas
1.Unanticipated means
2.Deliberate search

Methods of
searching for ideas

Deliberate
search

Unanticipated
means
Work

Using search
question

Idea prompting

Hobbies
Acquaintances

Chance
event

Someone
else’s idea

Customer
request

Some other
event

Unanticipated
Means
1.The person’s work
2.The person’s hobby
3.The person’s acquaintances
4.A chance event

The person’s Work
Employees who are in direct contact with
customers are sometimes confronted with
demand for products or services that are not
currently provided by the company.

The person’s Hobby
 A hobby is a useful means of developing
some skill which could be useful later
when a hobbyist decides to operate a
business.

Acquaintan
ces
• It takes another person to make him aware of
the wisdom of starting a new business
venture. This person could be a friend, a
neighbor, or just anybody he meets once in a
while.

A Chance Event
• There are times when a person
encounters an event that will provide him
with a clue to a business ventures.

Methods of
searching for ideas

Deliberate
search

Unanticipated
means
Work

Using search
question

Idea prompting

Hobbies
Acquaintances

Chance
event

Someone
else’s idea

Customer
request

Some other
event

Deliberate Search
1. Using search question
2. Idea prompting

Using Search Question
1. How can this product be made differently?
2. What will motivate the consumers to buy my
product instead of the competitor’s products?

Idea Prompting
• Encounters with someone else’s idea, or a
customer request, or some other event may
provide hints or cues leading to business idea.

Screening
Generated Ideas

Business ideas may be screened with
the use of the ff. criteria:
1.
2.
3.
4.

Market feasibility
Technical feasibility
Financing feasibility
Financial feasibility

Market Feasibility
1. Stable and sufficient demand
2. Potential competitive strength of the firm

Technical Feasibility
• Production difficulties could take the form of
unstable supply of materials, unreliable or
fluctuating power supply, and others. Nevertheless,
technical concerns such as those must first be
cleared before subjecting the business idea to
further consideration

Financing Feasibility
The proposed owners of the ventures must have sufficient
capital, or if insufficient, must be of good credit standing in the community. In general, the sources of financing
include the ff.:
1. The proposed owner’s savings;
2. Relatives and friends;
3. Financing institutions like banks.

Financial Feasibility
• The purpose of entrepreneurship is to provide a
source of income to the...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • business idea Essay
  • Business Idea Essay
  • business idea Essay
  • Small Business Idea Paper
  • Small Idea Business Paper
  • Essay about Business
  • Business Essay
  • Business Essay

Become a StudyMode Member

Sign Up - It's Free
More Details | Handarbeit (554226) | La Leyenda De Redbadver online