MODULE 3
FINDING
IDEAS FOR
BUSINESS VENTURES
New business
ventures appear in the marketplace everyday. Indeed, relatively new companies provide many of the products and services we
use daily. Many of these ventures were started by entrepreneurs or businessmen. This module discusses sources of new ideas
for business ventures and methods of generating new venture ideas.
OBJECTIVES:
After
studying this module, the student should be able to:
1. Describe sources of
ideas for business ventures.
2. Explain formal and
informal surveys.
3. Discuss how brainstorming,
observations, and notebooks can be used to develop new business venture ideas.
SOURCES
OF IDEAS FOR BUSINESS VENTURES
If you want to be an entrepreneur, you should be alert at all times for new or more efficient ways
to meet the needs and wants of customers. These ideas can come from many sources, and they can appear at any time. Some people
find ideas for new business ventures while reading newspaper or magazines. Others discover ideas while they are pursuing a
hobby or when they are attending a merchandise show or a craft and hobby show.
Newspapers
A convenient way to begin the search for new enterprise ideas is to read your local newspaper.
When reading, pay attention to the classified section. Classified advertising (often called want ads) consists
of advertising messages grouped together in one part o the newspaper under headings such as Help Wanted, Cars for Sale,
Business Opportunities, and Business Services. The most helpful headings when looking for enterprise ideas are
Business Opportunities and Business Services.
Business Opportunities. People wanting to sell their
businesses often advertise them in the business opportunities section of classified advertisements. Business opportunity
advertisements usually describe the enterprise to be sold, the location, and sometimes the selling price. One way to become
an entrepreneur is to buy an existing business. Therefore, you should now what businesses are for sale in your community.
Business
opportunity advertisements can be important to you for other reasons. For example, if you have decided to study entrepreneurship
opportunities in a particular industry, the ads can help you select a specific type of enterprise.
Assume
you are interested in opening a food service establishment. By reading advertisements, you can get a good idea of the variety
of business ventures available in the food service industry. Once you are aware of what is available, you can determine if
any match your interests or abilities.
If
your career plans are uncertain, business opportunity advertisements can offer a lot of clues to what your interests are.
Business Services. Persons with specialized business or technical skills
to sell reach potential customers through business services advertisements. IN these ads, it is the service that is
for sale, not the enterprise providing the service.
Business services advertisements can
be helpful as you think about your future. You may have taken a bookkeeping or accounting course at one time because you thought
about working in a bank or in another local business. Did you realize that you could also use these skills in your own enterprise?
Business services advertisements have helped many people become aware of new career paths.
Newspaper Articles. Entrepreneurs must be alert to
the world around them, and they can stay informed by reading newspapers regularly. Ideas for new business ventures are found
frequently in newspaper articles. Look for articles describing new types of businesses.
If you are going to start a new business enterprise, you may want to concentrate your efforts on
products or services with large sales potential. Pay attention to news items that signal changes in consumer needs. Such changes
often mean that consumers will buy either more or less of certain products or services. For example, you may read that there
is more interest in physical fitness. Therefore, look for new enterprise ideas that are related to physical fitness, such
as selling sporting goods or health foods. Other examples are health spas and
organic farming.
Magazines
Special-interest magazines and trade publications have other ideas for new business ventures.
Special-Interest Magazines. Articles and advertisements
in specific areas of interest appear in special-interest magazines. An article in a camping magazine may prompt you
to ask, “Why isn’t there a camping supply store in my town?” Your pursuit of an answer to the question may
be the starting point for a new enterprise. Likewise, you may get the idea to rebuild and sell used dirt bikes from reading
a motorcycle magazine.
To find special-interest magazines you like, check with relatives, friends, and the school and
public libraries. Many special-interest magazines are sold by subscription and on newsstands and magazine racks in stores.
Trade Publications. Magazines and newspapers designed
for people working within a particular business or field are known ad trade publications. They contain helpful information
regarding new products or services likely to become popular soon. You will find information in the articles as well as the
advertisements. Trade publications are available in many libraries.
Hobbies
Hobbies are activities you pursue for pleasure and
relaxation. They are often the source of ideas for new business ventures. For example, if you enjoy buying and selling antiques
and other collectibles, you may be able to expand you hobby into a profitable full-time enterprise. A business related to
your hobby will enable you to spend more time doing what you enjoy most.
Merchandise Shows
Another way to find ideas for new business ventures is to attend merchandise shows sponsored by
manufacturers and distributors. Two types of merchandise shows are public and trade. Each serves a different purpose.
Public Shows. Places where manufacturers and distributors
display and demonstrate their products to the public are called public shows. They are open to all persons who wish
to attend. An admission fee may be charged in some cases, and shows may last several days. Public shows are often held in
fairgrounds buildings, convention centers, or sports arenas. Watch for newspaper advertisements about public shows.
When you go to a public show, you will see salespersons and product demonstrators who will answer
your questions. Leaflets and brochures describing products are usually available.
By visiting a public show, you may discover an enterprise idea that matches your interests and
abilities.
Trade Shows. Often exhibits of products from many
suppliers will be organized by groups of manufacturers or wholesalers. These are known as trade shows, and they are
open only to people engaged in a particular line of business or trade. Salespeople are on hand not only to accept orders and
set up delivery dates but also to discuss the latest trends and products. Shows are held in trade areas such as apparel, furniture,
hardware, house wares, sporting goods, books, jewelry, computers, and office equipment.
Trade shows can be sources of new enterprise ideas. After attending a show of computer equipment,
for example, you might decide to look for entrepreneurship opportunities in that field because of its growth potential.
You must realize that trade shows are not held everywhere. They are most frequently found in the
larger cities. Remember that admittance to trade shows is limited to members of the trade and that there may be an admission
fee. If you would like to attend a show and are not working in the trade, a friend in the appropriate trade area may take
you as a guest.
Craft
and Hobby Shows
Crafts and hobby shows are places where people show
others what they do in their spare time. For example, con collectors may display their collections for all to see. Those who
work with pottery may demonstrate the craft for others.
You may get ideas for new business ventures by observing activities at craft and hobby shows. You
usually do not have to look too far to find a craft or hobby show. They ar held frequently in local shopping malls, convention
centers, exhibit halls, or parks. Be alert for newspaper announcements that tell the place, date, and time for a show in your
area. You should also be prepared to pay a small admission fee at some of these shows. What craft and hobby shows are held
in your community?
METHODS OF GENERATING NEW ENTERPRISE IDEAS
Some new enterprise ideas are found by chance. Most, however, come from the entrepreneur’s
conscious efforts. You can generate ideas for new business ventures by conducting surveys, brainstorming, making observations,
and keeping a notebook.
Conducting Surveys
One way to stimulate ideas for new business ventures is to find out what consumers need and want.
You can obtain this information from surveys. A survey involves asking a number of people a series of questions and
then summarizing their answers. Surveys can be either informal or formal.
Informal Surveys. You can conduct an informal
survey by talking to your family and friends. You may ask them what new businesses they think are needed in town, or you
may ask if there are products or services they are not able to purchase locally. Another way to get some information is to
ask: If you were to start your own business, what would it be? What products or services would you offer? Why? Answers to
these questions may give you new enterprise ideas to think about.
When you observe business activity in the community, you are conducting an informal survey. Observation
might reveal the need for particular business ventures. Perhaps there is no bicycle repair shop in town, and there appear
to be many bicyclists in the area. Maybe you have noticed that a catering service I needed for parties. If you live near a
tourist or resort area, you may be able to sell items made by local artisans.
Formal Surveys. A formal survey involves their
interviewing many people or asking them to complete a questionnaire. Contact persons from throughout the community, especially
those who are potential customers for the new enterprise. Formal surveys are useful in identifying shortcomings or weaknesses
in existing business ventures and in determining needed products or services.
Brainstorming
Another method of generating ideas for new business ventures is brainstorming. Brainstorming
is a technique used to solve a problem by generating as many ideas as possible. You may use brainstorming in a group or by
yourself.
As you search for new enterprise ideas, you will probably brainstorm by yourself. However, you
may be able to do this more effectively if you first learn how this technique works in a group.
You can get practice in brainstorming by getting together with two or three people. One person
should be the leader and another the recorder. The recorder’s job is to list the ideas as they are stated. Compile the
ideas on a chalkboard or flipchart for everyone to see.
Brainstorming begins with a question from the leader. Someone in the group suggests an answer,
then everyone else changes it or adds to it. Each idea leads to one or more ideas. The result is a chain reaction of ideas.
In addition to getting the session started, the leader must keep it going. The leader should be
ready to add an idea when others run out of ideas. This often restarts the process. Follow these rules in the brainstorming
group:
1. Don’t criticize another person’s ideas.
Group members will tend to talk less if this happens. This means fewer ideas will be expressed.
2. Encourage freewheeling. The wilder the ideas, the
better. It is easier to tame down a wild ideas than it is to think up another one.
3. Try for quantity. The larger the number of ideas,
the better the chance of getting good ones.
4. Combine and improve. Group members should state their
own ideas. They should also suggest how the ideas of others could be turned into better ideas. Sometimes two or three ideas
can be joined to form still another idea.
Even though brainstorming is used most often in groups, you can also use it alone. Follow these
rules for individual brainstorming:
1. Don’t judge your own ideas until you have finished the list. Never erase or scratch out an idea.
2. Do some freewheeling. Don’t be afraid to write
down some unbelievable ideas.
3. Try for quantity. Remember, by writing down many ideas,
you increase your chances of getting good ideas.
4. Combine and improve. Write down all ideas that come
to mind. Then add to the list by combining and improving ideas.
Making Observations
An idea for a new enterprise may come from observing your own needs and wants or by observing the
needs or wants of the people around you.
How observant are you? Before you answer that question, see if you can answer these questions:
· On which corner is the name of your street posted?
· Is there a stairway in your home or school? How many steps does it have going from
the first to the second floor?
Even if you answered these questions correctly, you may still agree that people do not always observe
their surroundings. Observation is an active process. If you are not actively trying to observe, you probably will not observe.
Sharpen your observation skills, and you will improve your chances of finding new enterprise ideas.
You can do this by the following actions:
1. Watch
trends, particularly those in food, clothing, and leisure-time activities. Entrepreneurs have responded to people’s interest in physical fitness by providing exercise clothing, equipment
and instruction. Some restaurants provide nutritional information for their menu items. Be alert. Trends in other parts of
the country and the world may be clues to future trends in your area. What foods or clothing styles are moving from one part
of the country (and the world) to another?
2. Observe
faults or shortcomings in existing products, services, or businesses. Did the store where you bought a gift provide a box for the item, and was gift-wrapping service available? If not,
you may have discovered the need for a new business—an enterprise that would wrap gifts and, if needed, pack the item
for shipping to another city. Busy people are willing to pay for these services.
3. Look
for new associations among objects, processes, and ideas.
See if you can take the idea from one line of business and use it in another. Pizza parlors have provided home delivery for
years. Fast-food restaurants serving hamburgers or chicken, on the other hand, have generally offered this service. Combine
the two ideas to create a new concept, that of a hamburger or chicken restaurant that delivers to the home.
4. Observe
that some things that used to be done very well are not done any more. At one time, gasoline stations could handle practically any automobile repair problem. Should somebody establish
full-service gasoline stations in areas where they no longer exist?
5. Try
out your idea on other people. Ideas must be tested. When
you get an idea for a new product or service, plan to develop and refine it. This could take weeks, months, or even years.
Tell your idea to your friends. Observe how they react to the idea and listen to what they say. Are they enthusiastic? Do
they encourage you to keep working on the idea? Most important, do they think your product or service is a gimmick, or do
they believe it has value?
Keeping
a Notebook of Ideas
Ideas for new business ventures can come to you at any time. They often come at times when you
least expect them, such as while you are eating lunch, riding in a car, or watching television.
At the moment an idea appears it may seem that it would be impossible to forget it. Yet in a very
short time it becomes blurred or is forgotten. Be prepared to catch ideas while they are alive and fresh in your mind. As
soon as you get an idea, write it down. Keep track of your ideas in a notebook.
If you get an idea when you do not have your notebook with you, write it down on a scrap of paper. Then add the idea to the
list in your notebook as soon as you can.
Plan to spend time at least once each month or review your notebook of ideas and to answer these
questions:
1. What
are the advantages or benefits of each enterprise idea?
2. What
are the disadvantages or drawbacks of each idea?
3. Does
the great idea you had a few weeks ago still seem great?
4. Do
the ideas have anything in common? For example, are several ideas related to computer or electronics?
5. Does
the list of ideas suggest that your interests are changing? Perhaps the enterprise idea you had several weeks ago was to start
a small retail store. However, now you may be setting your sights on a large-scale manufacturing business.
6. What
is the best idea in the notebook? Why?
Questions to Answer:
Part I.
Kindly
answer the following questions.
1. How can business opportunity
advertisements help you if your career plans are uncertain?
2. What types of newspaper
articles should you read when looking for new enterprise ideas?
3. Why are trade publications
good sources of new enterprise ideas?
4. Describe the differences
between public shows and trade shows. Give an example of each type of show.
5. List two ways you
can make an informal survey.
6. What is the meaning
of this statement: “The existence of several businesses of one type does not necessarily mean you should not start a
similar enterprise”?
7. Explain the rules
for individual brainstorming.
8. What are way to sharpen
your observation skills? Describe briefly.
9. List six questions
you should answer when reviewing your notebook of ideas.
Part II.
Analyze
the following case and answer the questions.
LUZVISMIN PARTNERS
Ann, Bob, Charlie and Diane have been friends for almost two years. They met when
they were all assigned to the same unit at Camp Aguinaldo in Quezon City. Within the next six months, they will all be completing
their enlistments, and they will be leaving military service. Charlie and Ann each have sixty days left to serve. Diane has
four months left and Bob has almost six month.
The four friends agree that their military service has been a valuable experience.
At the same time, each of them is looking forward to pursuing a career as a civilian. They often talk of starting their own
businesses. Recently, they have been talking about going into business together. This is a possibility because they all want
to stay in Quezon City.
At lunch on Monday, Charlie said, “Let’s meet for at least two hours
each week to talk about a business we could open together. At least for now why don’t we call ourselves the Luzvismin
Partners. It’s a good name because each one of us grew up in a different part of the Philippines.”
With only sixty days to prepare for his return to civilian life, Charlie is eager
to plan his career. He continued, “If we’re serious about going into business together, and I think we are, we
should get some plans on paper real soon.” Ann said, “I agree, but we can’t start planning until we decide
what business we want to start. I think we should do some brainstorming when we meet next week. That should give us many business
ideas to consider.” “Great suggestion,” Charlie added, “but I think we should agree on some rules
for the brainstorming meeting; otherwise it’ll get out of hand. I was in one of those meetings once. The whole discussion
went off in several directions.” Bob came into the discussion and said to Charlie, “Go ahead and suggest some
rules.” “All right,” Bob said, “here are two rule: First, we should each come prepared with a list
of ideas so we won’t waste time trying to think up ideas at the meeting. Second, no wild ideas will be allowed. If we
follow these rules, I think we’ll have a good brainstorming session.”
Questions:
1.
Do you agree with Charlie that each person should come to the brainstorming meeting with a
list of ideas? Why or why not?
2.
What will happen if wild ideas are not allowed? Explain.
3.
Describe how you would set up and conduct the brainstorming meeting.
