2.1.

Types of business
2.1.1. Trading
2.1.2. Service
2.1.3. Manufacturing
2.1.4. Agriculture, forest and aquaculture
2.1.5. Others
2.2. Overview of business ideas
2.2.1. Concept of business idea
2.2.2. Methods to generate business ideas
2.3. Evaluation and selection of business ideas
2.3.1. Criteria to evaluate business ideas
2.3.2. Steps to filter business ideas
 This type of business buys products at wholesale
price and sells the same at retail price. They are
known as "buy and sell" businesses. They make profit
by selling the products at prices higher than their
purchase costs

A trading business buys a product and sells it

without changing its form
 Examples:
Department store, clothes and accessories shop,
consumer electronics, home furniture, appliance stores,
drug stores
 A service type of business provides intangible products
(products with no physical form). Service type firms
offer professional skills, expertise, advice, and other
similar products.
 Examples of service businesses:

• Business services, such as accounting, advisory,

taxation, advertising, engineering, legal, research
agencies, computer programming, etc.
• Personal services, such as laundry, beauty salon,
photography
• Fitness facilities, amusement parks, bowling centers,
golf courses, theatres
• Hospitals and clinics, schools, museums, banks
• Hotel and lodging, and more.
 A manufacturing business combines raw materials,
labor, and overhead costs in its production process. The
goods produced will then be sold to customers.
 Examples:

• Food processing, such as producing canned meat,

frozen goods, dairy products, bottled drinks, also
bakeries and oil mills
• Clothing factories that use textile as raw material
• Wood and metal works, such as in building cabinets,
tables, chairs
• Chemical labs, plastic and rubber production
• Ship builders, aircraft manufacturers, car makers
These businesses relate to the farming of agricultural,
forestal and aquatic organisms.
 Ideas?
 The start of a trend that lasts for a considerable period
of time provides one of the greatest opportunities for
starting a new venture.

 Trends that will provide opportunities include: green

trend, clean-energy trend, organic-orientation trend,
economic trend, social trend, health trend, and Web
trend.
 Consumers
◦ Informally monitor potential ideas and needs.
◦ Formally arrange for consumers to express their
opinions.
 Existing Products and Services
◦ Analysis uncovers ways to improve offerings that may
result in a new product or service.
 Distribution Channels
◦ Channel members can help suggest and market new
products.
 Sources of New Ideas (cont.)

 Government
◦ Files of the Patent Office can suggest new product
possibilities.
◦ New product ideas can come in response to
government regulations.
 Research and Development
◦ A formal endeavor connected with one’s current
employment.
◦ An informal lab in a basement or garage.
 Focus Groups
◦ A moderator leads a group of 8 to 14 participants
through an open, in-depth discussion in a directive
or nondirective manner.
◦ An excellent method for generating and screening
ideas and concepts.
Methods of Generating New Ideas (cont.)
 Brainstorming
◦ Allows people to be stimulated to greater creativity.
◦ Good ideas emerge when the brainstorming effort focuses on a
specific product or market area.
◦ Rules of brainstorming:
 No criticism.
 Freewheeling is encouraged.
 Quantity of ideas is desired.
 Combinations and improvements of ideas are encouraged.
Methods of Generating New Ideas (cont.)
 Brainwriting
◦ A form of written brainstorming.
◦ Participants write their ideas on special forms or cards that
circulate within the group.
 Problem Inventory Analysis
◦ Consumers are provided with a list of problems and are
asked to identify products that have those problems.
◦ Results must be carefully evaluated as they may not actually
reflect a new business opportunity.
Evaluation and selection of business ideas
 Criteria to evaluate business ideas
Evaluation and selection of business ideas
 Criteria to evaluate business ideas
Evaluation and selection of business ideas
 Steps to filter business ideas
Industry analysis
Identify your industry and provide a brief overview

Summarize the nature of the industry

Provide a forecast for your industry

Identify government regulations that affect the industry

Evaluation and selection of business ideas
Steps to filter business ideas
Competitive analysis
List all of your competitors

Highlight what you can do that other businesses can't do

(Competitive Advantage)
Prove there is a market for your service or product

Identify your strengths and your weakness

Evaluation and selection of business ideas
Steps to filter business ideas
Customer analysis
Customer demographics

Describe your customers' behaviour