Idea Generation

INTRODUCTION
A business opportunity may be defined as a set of favorable

circumstances in which an entrepreneur can exploit a new business
idea that has the potential to generate profits.
Business opportunities have the following four fundamental
features:
• They create or add significant value to the customer.
• They solve a significant problem by removing pain points or
meeting a significant want or need for which someone is willing to
pay a premium.
• They have a robust market, margin, and money making
characteristics that will allow the entrepreneur to estimate and
communicate sustainable value to potential stakeholders.
• They are a good fit with the founder(s) and management teams at
the time and marketplace along with an attractive risk–reward
balance.
What Defines a Good Business Opportunity?
• An idea is a thought or a concept that comes into existence in the mind as a

product of mental activity.
• A business idea is an idea that can be used for commercial purposes.
• There can be many sources of business ideas, including the following
A resolved problem faced by an actual or potential entrepreneur.
An unmet customer need discovered by an actual or potential entrepreneur
at a place of employment.
Changes in the business environment.
Characteristics of opportunity.
Urgency of the market need :
The business idea should envision a product or service that satisfies a market
need or a need of the customer. The market need has to be carefully assessed
by consulting industry expert as well as potential customers.
Adequate market size:
A business usually targets a particular market segment after assessing their
demographic, geographical, and lifestyle factors. In order to make the business
viable, a large number of potential customers should exist. There is a need to find
out the potential market size for the product or service.
Sound business model:
In simple terms, a business model is a broad range of descriptions of various
core aspects of business, such as purpose, strategies, infrastructure, organizational
structures, marketing programs, and operational processes and policies.
Potential brand value:
The product/service being offered must be differentiated from those being
offered by competitors to maintain a competitive advantage in the market.
An able management team:
The ability and passion of team members to use a business opportunity is
important to success. The team should have contacts among suppliers, competitors,
and customers. The number and quality of contacts up and down the value chain is
an important determinant of eventual business success.
When Is an Idea an Opportunity?
• A business opportunity is a set of favorable circumstances that creates a
need for a new product or service. A business idea becomes a good
business opportunity when it has the following four essential qualities:
• Attractiveness.
• Timeliness.
• Durability.
• The quality of being anchored in a product or service that creates or adds
value for its buyer or end user.
How to Generate Business Ideas
• Brainstorming
Brainstorming is a technique used to quickly generate a large number of
ideas and solutions to problems.
The brainstorming session is conducted to generate ideas that might
represent business opportunities.
Brainstorming works well individually as well as with a varied group of
people.
A group brainstorming session requires a facilitator, white board, and
space to accommodate the participating people. Brainstorming works well
with 8–12 people and should be performed in a relaxed environment.
Participants are encouraged to share every idea that enters their mind with
the assurance that there is no right or wrong answer.
The brainstorming session usually starts with the facilitator broadly stating
the problem and setting the time limit (such as, say, 30 minutes) for the
session.
• Once time is up, the best ideas are selected, based on a few criteria decided
upon in advance (such as, say, cost-effectiveness).
• The selection must be made on the basis of a consensus from everyone in
the group.
• Next, a score is given to each idea depending on how well it meets the
criteria.
• The idea with the highest score may be used to solve the problem.
• An idea is a thought, an impression, or a notion.
• A business idea is a concept which can be used for
commercial purposes.
• Business ideas can be generated by environmental
analysis, industry analysis, and SWOT analysis.
Survey Method:
The survey method is used to collect information by direct observation of
a phenomenon or systematic gathering of data from a set of people. The
survey method involves gathering information from a representative
sample population, that is, a fraction of the whole population under study
that presents an accurate proportional representation of that population.
Reverse Brainstorming:
This is a method that is similar to brainstorming, with the exception that
criticism is allowed. It is, therefore, also called “negative brainstorming.”
In this technique, the focus is on the negative aspects of every idea that
has been generated through brainstorming. Also called the “sifting”
process, this process most often involves the identification of everything
that is wrong with an idea, followed by a discussion of ways to overcome
these problems.
The Gordon Method
• This is a creative technique developed by A. F. Osborn in his book L’arte
della Creativity to develop new ideas.
• This method is similar to brainstorming.
• Collective discussion addresses every aspect of the planned product in an
uninhibited solution-oriented way.
• For example, to devise a new pen-holder, the group discusses the
“holding” theme and examines all possible meanings of this word and all
possible examples of “holding” (such as items, nature, etc.). The group will
later sit and study each idea to see if any of them may be useful for the
planning of a new pen-holder.
What Leads to the Creation of Opportunities
Entrepreneurial opportunities often come into being because of certain

external changes, such as
Technological change
Regulatory and political change
Social and demographic change
Economic change.
Forms of Business Opportunity
• Political and Regulatory Changes :
Political and regulatory changes lead to business opportunities by paving
the way for new, more productive use of resources or a redistribution of
wealth from one person to another.
Statutory and regulatory requirements create opportunities for
entrepreneurs to start firms that help other firms and the community to
comply with the requirements. When the use of helmets was made
compulsory by the government, helmets were reintroduced into the market
with new features and the demand for helmets improved substantially.
• Social and Demographic Changes
Changes in family and work patterns, the ageing of the population,
increasing diversity at the workplace, increasing focus on health and
fitness, the increase in the number of cell phone and Internet users, and
new forms of entertainment, lead to the creation of business opportunities
because they alter people’s preferences or demand for products and
services, and consequently make it possible to generate new ideas to meet
new demands.
• Economic Changes
Economic forces affect business opportunities by determining who has
money to spend.
An increase in the number of women in the workforce over the last few
decades and their related increase in disposable income is largely
responsible for the number of boutique clothing stores targeting
professional women that have opened in the past few years.
How to Identify a Business
Opportunity
• Studies have shown that previous experience in an industry helps
entrepreneurs to recognize business opportunities.
• In addition, the extent and depth of an individual’s social network also
affects the identification of opportunity.
• People who build a substantial network of social and professional contacts
will be exposed to more opportunities and ideas than people with sparse
networks.
• Studies have demonstrated that the identification of a business opportunity
may also be a cognitive process or an innate skill.
General approaches entrepreneurs use to identify an
opportunity.
Observing trends: Entrepreneurs can identify business opportunities
by carefully observing trends. The most important trends to follow
are economic, social, technological, and political trends. For
example, the development of the Internet and the miniaturization
of electronics goods led to the development of e-commerce and
laptop computers, respectively.
Solving a problem: Another approach to identifying business
opportunities is to recognize and solve a pressing problem that
customers are facing today. From an entrepreneur’s point of view,
every problem is a disguised opportunity.
For example, one of the most pressing problems facing countries
round the globe is finding alternatives for fossil fuels. As a result, a
number of entrepreneurial firms have been (and are still being)
launched to take on this challenge.
• Finding gaps in the marketplace:
A third approach to identifying business opportunities is to find
a gap between what is needed by the customer and what is
actually provided to the customer.
Finding such gaps can help entrepreneurs develop new products
and improve existing ones.
For example, over three decades ago, the lack of toy stores
focusing on a child’s intellectual development resulted in the
development of Discovery Toys, a California-based company
specializing in educational toys.

Idea Generation

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INTRODUCTION

A business opportunity may be defined as a set of favorable

• An idea is a thought or a concept that comes into existence in the mind as a

Entrepreneurial opportunities often come into being because of certain

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