CHAPTER/MODULE 3

SEARCH FOR BUSINESS OPPORTUNITY, IDEATION,

INNOVATION AND CREATIVITY

Intended Learning Outcomes

By the end of this topic/chapter, you must be able to:
1. Discuss entrepreneurial activities in search of business opportunities
2. Describe the concept of ideation, innovation, and creativity
3. Discuss the factors to consider in evaluating the business potential of an idea

There are many business opportunities for an individual with a creative mind.
All businesses start with an idea, and it is said that creativity, through innovativeness
and the capacity of bringing something new in the market, spells the difference
between a traditional businessman and an entrepreneur.

THE SEARCH FOR BUSINESS OPPORTUNITY

In selecting a business, options should not be based on luck and immature thinking,
but a thorough evaluation and systematic process.

In discovering business opportunities, the following factors on resources have to be

evaluated:

1. Markets- This refers to the number of prospective buyers, competitors, the

price, and the quality of goods and services that have to be analyzed.
2. Individual Interests- Business interest of individuals should match business
opportunities.
3. Capital- This serves as the fuel that keeps the business operating. The
availability of funds should fit the type of business to organize.
4. Skill- The entrepreneur should have the proper skills in the business he is
going to undertake.
5. Suppliers of inputs- It is important that there are steady suppliers of raw
materials and other inputs in the business.
6. Manpower- The success of the business also depends on the efficiency of its
employees.
7. Technology- Entrepreneurs should be aware of the presence of technology to
improve their products and services, or introduce new innovations in the
market.

Other opportunity-seeking process that can guide a prospective entrepreneur as to

what kind of business to establish are as follows:

1. Look at other successful businesses/ entrepreneurs. – Looking up at other

entrepreneurs as a role model that could be an inspiration, by doing what they
have done or do it even better.
2. Respond to a problem area- The solution to a problem might be transformed
into a business venture.
3. Home-based Business Option- This must not be taken for granted for there
are many big businesses that started as a small business at home.

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 4. Linkage of resources- The entrepreneur can produce his own input instead of
buying it.

The best way to evaluate business opportunity is through Market Research. Through
this, the entrepreneur can be guided in identifying profitable markets, saleable
products, the strengths and weaknesses of competitors, available resources,
business risks, trends in consumer tastes and preferences, and others are being
considered.

To be able to translate business opportunities to profits, the SWOT (Strength,

Weakness, Opportunity, and Threat) Analysis is applied. In knowing this, the
entrepreneur must be able to have an idea or a precautionary measure even before
the business starts.

HELPFUL HARMFUL

S W
STRENGTHS WEAKNESS

O T
OPPOTUNITY THREATS

Internal analysis
 An internal analysis of strengths and weaknesses focuses on internal
factors that give your business or company certain advantages and
disadvantages in meeting the needs of your target market(s).
 Strengths refer to the core competencies that give your business/company
an advantage in terms of meeting the needs of your target market(s).
 Weaknesses refer to limitations your business/company face. It is
important to identify these so you can develop and implement an
appropriate strategy.

External analysis
 An external analysis examines opportunities and threats that exist in the
business environment.
 Both opportunities and threats exist independent of the firm.
 Opportunities refer to favorable conditions in the environment that could
produce rewards for your business/company if acted upon.

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  Threats refer to barriers that may prevent your business/company from
realizing its objectives.

Excellent knowledge about the life cycle of the products provides the entrepreneur
business opportunities stay in business. It is composed of four stages:

 Introduction – If consumer awareness and acceptance or product is low,

launch the use of marketing activities. This is a critical stage since marketing
activities could either increase profit or lower it due to cost of development
and marketing activities.
 Growth- To meet the growing demand, product distribution is expanded. Sales
increase rapidly as product becomes popular.
 Maturity- Sales are still rising, but rate of increase has declined. At the latter
part, a sale reaches its peak, while profit begins to fall.
 Decline- There is s sharp fall in sales volume, while profit curve becomes
almost flat or horizontal. There is also decline in the number of competitors.
The only survivors are those who specialize in marketing the product.

IDEATION

The beginning of a business endeavor is ideation. This should be the first investment
of anyone who seeks to be an entrepreneur; and to be called an entrepreneurial
business opportunity, such idea has to be new, or if not, innovative. The best source
of ideas are the consumers or the market in general, since they are the ones who
are in need for a certain product or service.

The more idea a person produces, the more original and the better quality ideas one
will find among them. The most common ways of developing ideas are as follows:

 Recognizing the need- Develop and idea or a product that can satisfy a need,
and respond to the need by establishing a business concern.

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  Improving an existing product- The result of consumer dissatisfaction to the
existing product could open the door to introduce innovations or
improvements.
 Recognize trends- Entrepreneurs should be able to recognize the opportunity
to develop a product and set trends that can make them leading
entrepreneurs.
 Be aware of everything.- There is no other way to know about what is
happening around you but to research and read.
 Questions and assumptions- Anybody can question the relevance of quality of
any product or services, provided, that there is an effort to improve products.
 Naming it first, then develop it. – If you have the idea, study it and develop it
to something that is worth a business.

A wrong choice of idea could be the cause of business failure so ideas need to be
evaluated if it can be profit potential. The following are some tips in evaluating ideas:

 Do not let idea follow money, let money follow your ideas. – If the idea is clear
and viable, there should be clear options for the business out of the idea.
 See yourself as a problem solver.- Ideas should be a solution to an existing
problem of the consumer or the market in general.
 Use research as a weapon against failure.- This is an important fact in
decision-making process; most businesses failed because of lack of
information.
 Make sure your idea has longevity.- An idea that is worth pursuing into a
business is one which has a long-term purpose and not only a fad.
 Take a risk on your ideas.- Venture into a business by using your own ideas.
 Test your idea in the past, present and future.-The market need and demands
will not be far from what is happening in the past, so it is better to get
information about the past, present and future.
 Know the idiosyncrasies of your market.- Know the needs of your market and
all the factors that affect the buying process. Your idea will depend on this.

Ways of Protecting your Ideas

 Confidentiality Agreement- It specifically provides that a signer will not share

the idea to anyone. This is a typical agreement or contract where one should
ask advice to patents attorneys or those with experience and expertise in the
intellectual property rights.
 Patent- This gives the inventor exclusive legal rights to exclude anyone else
from manufacturing, selling, importing or using an invention during the life of
the patent. The three general classifications are: design, utility and plant
patents
 Trademark- This is a word, name, symbol or device used by manufacturers or
merchants to identify their goods and distinguish them from others sold in the
market.
 Copyrights- A copyright protects the creative works of composers, authors/
writers, artists and others. This is the easiest form of protection for intellectual
property.

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ENTREPRENEURIAL CREATIVITY

Creativity, innovation, and entrepreneurs are inseparable. Creativity is an essential

part of innovativeness, the starting point of a process, which is skillfully managed,
and brings idea into innovation. It is considered to be inherent to every individual but
the social environment can influence both the level and frequency of creative
behavior.

Environmental Stimulants to Creativity

 Freedom- a sense of control over one’s work ideas.

 Good project management- a manager serves as a good role model
 Sufficient resources- access to necessary resources
 Encouragement- management enthusiasm for new ideas
 Various organizational characteristics- a mechanism for considering new
ideas
 Recognition- a general sense that creative work will receive appropriate
feedback, recognition and reward
 Sufficient time- time to think creatively about the problem
 Challenge- a sense of challenge arising from intriguing nature of problem itself
 Pressure- a sense of urgency that is internally generated from competition as
a personal sense of challenge
 Outside organization- from a general desire to accomplish something
important

If there is an environment conducive to stimulating creativity, there are also

environmental obstacles to creativity. These are the various organizational
characteristics, which are inappropriate reward system, the lack of freedom of
deciding what to do or how to accomplish the task, and the organizational disinterest
which result to lack of support, interest or faith in project. It could also be the inability
of the manager to set clear direction and the reluctance of managers and co-workers
to change their way of doing things. Included also is the lack of appropriate facilities,
equipment, materials and the time pressure to think creatively about the problem.

THE CONCEPT OF INNOVATION

Innovation is doing something different. It could be introducing either something new

or different. Innovativeness is a characteristic of an individual, team or organization.
This is also the capacity to create ideas and develop them to usable products or
services.

Efforts on innovation must have impacts- positive impacts. It must have a positive
implication that is supportive of organizational goals and objectives. The innovative
accomplishment exists if the following happens:

1. Effecting a new policy- creating change or orientation or direction

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 2. Finding new opportunities- developing an entirely new product or opening a
new market
3. Designing a new structure- changing the formal structure, reorganizing or
introducing a new structure
4. Devising a fresh method- introducing a new process, procedure or technology
for continued use

The most critical aspect in making a decision to go into self-employment and

entrepreneurship is the context of ideation, innovation and creativity. The generation
of idea and transforming it into a business venture can make or break a potential
entrepreneur. The success of the business could lead to personal prosperity of the
owner and help the economic condition of our country.

Innovation is not only for a change, but also for the search in excellence, not only in
producing a product, but also in the form of innovative systems and services. The
innovativeness and creativity of an individual could be the greatest assets any
business could have, so this should be developed and properly taken care of.

The prospective entrepreneur has a variety of option in deciding what kind of

business he is going to put up. He can on market scanning to see what is needed.
He should not limit himself in going to manufacturing or sari-sari store or market
niche, but developing similar product or service should be examined. Buying a
franchise, being a subcontractor, innovating an existing product, systems or
services, sponsoring a start-up business, or acquiring an on-going business concern
are some of the business ideas which are very promising and could success
eventually.

REFERENCES

Azarcon,et.al(2005). Entrepreneurship Principles and Practices (A Modular

Approach)
Asor(2009). Enterprise in the Philippine Setting

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