SESSION 3 :

PRINCIPALS OF ETREPRENEURSHIP IN
FORMULATING BUSINESS IDEA

1
 Learning Tasks

At the end of this session all students should be able to:

• Define business idea
• Outline principles of formulating business idea
• Describe steps of formulating business idea
• Formulate a business idea
 Activity: Brainstorming

Take 1 minute and brainstorm on what is the definition of the term business
idea?
 Definition of business idea

A business idea
• Is a short and precise description of the basic operations of an intended
business.
– A good business starts with a good business idea
– Before you can start a good business you need to have a clear idea of the sort of business
you want to run
– A successful business meets the needs of its customers.
– It gives people what they need or want
• Business ideas are identified through positive and creative thinking
• They can come from different sources such as ideas built on local resources,
local needs, local activities, interests and hobbies
 Principles of Formulating Business Idea

• Develop a vision
– Where are you?
– What do you want to be in s years to come?
– Who is your business role model
• Determine what you are good at
– Look likes and dislikes
– Where are your talents
• Figure out what are the market needs
– Focus on your core product
– Identify your potential customers
– Decide marketing tools that work best
– Develop and implement plan of action
 Steps of formulating business idea

• Assessment
– Identify relevant market
– Execute a market survey
– Carry out competitive analysis
– Begin your research by writing down what you think the problem is that your business idea
would be solving
– Decide on branding
• Branding is more than just choosing a name, it's about deciding on an identity for your
idea
• You want to choose something you love, but you also want to choose a name that
conveys the experience of using your product and the problem that it solves
 Steps of formulating business idea

• Planning
– Note down your ideas and expand them
– Identify business goals
 Steps of formulating business idea

• Development
– During this stage, you will take your concept and put it into concrete form
– It includes the following issues:
• Secure intellectual property, this refers to the process by which an individual or
company can own the rights to a created product. Examples include patents, copyright,
and trademarks
• Incorporate, is the process of turning your business into a legal entity and deciding how
it will be structured
• Choose a co-founder, this is looking for someone with solid track record and skills
which are complementary to yours to work together and accomplish goals as a team
• Develop action plan, a clear plan on how the business will be carried should be in place
 Steps of formulating business idea

• Testing
– This stage involves a test market that is as close to a real market situation as possible
– Market test results should confirm that this is a valid idea to move forward as a product
 Steps of formulating business idea

• Launch
– This is done after testing the idea
– Begin implementing the idea
– Find a mentor
– Pick a workplace
– Apply for an accelerator program, if you need some additional resources and expertise,
consider applying for an accelerator (an accelerator is a program for startup businesses that
helps speed the growth of the company by providing a mentor network and sometimes a
small investment)
 Steps of formulating business idea

• Get feedback
– Gathering customer feedback
– Measuring your business results
 Means of generating business idea

• Investigating the environment to see type of business exist in the area which
you want to establish the business
– You can use your creativity to find more business ideas in your area.
– Look at the list of businesses in your area.
– If your list covered a large enough section of your local market, you are probably beginning
to see what industries or services your local economy depends on.
 Means of generating business idea

• Brainstorming
– Brainstorming is a way of opening up your mind and helping you to think many different
ideas
– You start with a word or topic and just write down everything that comes into your mind
– You continue for as long as you can, putting down everything even if it seems irrelevant or
odd
– Good ideas can grow from very strange beginnings
– Brainstorming works best when carried out with another person or a group of people, but
you can also try it on your own
– Many large companies use this method to come up with new product ideas
 Means of generating business idea

• Analyse Your Business Ideas And Select The Best One

– List all the ideas which have been identified
– Select the most suitable ideas from your list by thinking carefully about each idea
– Use these key questions to identify suitable idea
 Means of generating business idea………..

• SWOT Analysis
– One method people often use to decide which is the most suitable business idea is the
SWOT analysis.
– It helps you focus on possible problem areas and potential advantages of each idea
• S-Strengths
• W-Weaknesses
• O-Opportunities
• T-Threats
 Means of generating business idea………….

SWOT Analysis………
• Inside the business
– To analyse the strengths and weaknesses of a business an entrepreneur should look inside
the planned businesses.
– What will the business be good at and what are its weaknesses?
– Strengths are the specific positive aspects, which will give your proposed business an
advantage over similar business ventures and competitors. It could be that you propose to
offer a better quality product or to have a location, which is located near your customer.
– Weaknesses on the other hand are specific aspects that your business will not be good at.
Perhaps your costs will be high because your business is located far from suppliers and you
will have to pay more for transport
 Means of generating business idea………..

SWOT Analysis………….
• Outside the business
– To analyse the opportunities and threats of your proposed business, an entrepreneur should
look outside the business i.e. the external environment. What aspects of the external
environment will benefit the business and what aspects will negatively affect the business?
– Opportunities are on-going potential developments around you that will be good for your
business.
• Example the demand for the product you are proposing will increase because of the
influx of tourists.
– Threats are probable events that may affect your business negatively. For example, the
business idea could be so simple that other people may start similar businesses in your area
and reduce your share of the market
 Formulate a business idea

Read handout 3.1 and do the given Assignment of formulating a business idea
 Key Points

• A business idea is a short and precise description of the basic operations of an

intended business
• Business ideas are identified through positive and creative thinking
• In creating business idea a nurse should consider the needs, the product, the
customer and the sale
 Evaluation

• What is business idea?

• What are the principles of formulating business idea?
• What are the steps to follow in formulating business idea?
 References

• Barringer, B.R. (2010), Entrepreneurship; Successfully Launching New Ventures, third

edition, Pearson Education, Boston
• Deakins, D and Freel, M. (2003), Entrepreneurship and Small Firm, Fourth Edition,
McGraw Hill Education
• Hisrich, R.D. (2004), Entrepreneurship, Fifth Edition, Tata McGraw - Hill Education, New
Delhi
• Hisrich, R. D; Peters, M. P. and Shepherd, D. A. (2008), Entrepreneurship, Seventh
Edition, McGrawHill, Singapore
• Scarborough, N. M. (2011), Essentials of Entrepreneurship and Small Business
Management, Sixth edition, Prentice Hall, New Jersey
• Burns, P. (2007), Entrepreneurship and Small Business, Second Edition, Palgrave
Macmillan, London