Generating the business idea is regarded by many as the most critical stage in the entrepreneurial activity. With regards to this statement, discuss the ways in which business ideas can be generated. Use examples to enhance your discussion.
The setting up of a business is divided into three stages, namely the idea stage, the planning stage and the implementation stage. However the idea phase is considered to be the most critical phase. Idea can be generated from the entrepreneur’s skills, from market demand, from federal government, from existing products and services, resources available and from existing problems.
The entrepreneur’s skills, expertise and aptitudes
One can use unique skills developed during once lifetime. Throughout training one can gain some knowledge, for example a person with an architectural background can design an eco house. However training, skills does not always guarantee success. Skills are more likely to be obtained through working experiences. A person with a financial experience might want to start an insurance company.
Potential entrepreneurs should continually pay close attention to potential customers. They should look for a gap in the market through research and development. Hisrich et al, 2003:136 states that the largest source of new ideas is the entrepreneur’s own “research and development,” efforts. However customer’s needs are different. Examining different people needs with a view to satisfy them can generate business ideas. For example, by identifying products that elder people might need. At the same time the entrepreneur might not be able to satisfy everyone due to lack of resources.
The federal government can be a source of new products in two ways. First the files of the patent office contain numerous new product possibilities. For example, official gazette listing patents for licence or sale. However, these patents might generate viable projects. The second source...
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