2: Generating and protecting business ideas

Question 1

Brainstorming

Answer 1

A process for generating innovative and creative ideas through open-ended group discussions.

Question 2

Sources for business idea:

Answer 2

• Brainstorming
• Own personal experience (e.g. that is on a product/service he/she is familiar with either through a previous job or through a hobby/interests)
• Might spot a gap in the market

Question 3

What benefits does knowing the product or service e.g. based on personal experience bring?

Answer 3

• Entrepreneur will have good knowledge of the features of the product.
• Entrepreneur may have a passion or interest in the product so will be motivated to do well.
• Good contacts established in the market.
• Entrepreneur may already have good reputation in the market.

Question 4

What disadvantages does knowing the product or service e.g. based on personal experience bring?

Answer 4

• Is there room for another competitor?
• The entrepreneurs passion for the product may not be shared by anyone else.
• The entrepreneur’s passion may overestimate the size of the potential market.
• Knowledge of the market is not the only skill needed - the person may not possess the other skills needed for successful entrepreneurship

Question 5

What benefits does spotting a gap in the market, e.g. based on small-scale market research bring?

Answer 5

• Entrepreneur is basing idea on customer’s needs rather than their own, which might improve the chances of success.
• ‘First mover advantage’
• Little or no competition in the early stages when a business start up is most vulnerable.
• Easier to market new idea than to persuade people to buy an established idea from one business rather than another?

Question 6

What disadvantages does spotting a gap in the market, e.g. based on small-scale market research bring?

Answer 6

• Entrepreneur will have little or no expertise in the product/ service or market - prone to mistakes.
• Is the gap real? Has someone tried to exploit it before and failed?
• Competition may enter quirky and capture market share - how long can ‘first mover advantage’ last?

Question 7

Ways in which an entrepreneur will have to do initial small budget research:

Answer 7

• Business directories e.g. Yellow Pages
• Local maps to locate existing competition
• Use local and demographic data to establish potential market features.
• Use small-scale research such as questionnaires or interviews.
• Use market mapping to identify market segments.