Stage 2 - Exploring business ideas and opportunities Flashcards
What are the three ways to come up with an idea/opportunity?
1) Solving a problem
2) Observing trends
3) Identifying “Market Gaps”
Describe the three basic categories to describe new entrepreneurial concepts:
Type A - Caters to consumers in new markets (EX: Uber, Airbnb)
Type B - Introduces new technologies to the marketplace (EX: Amazon)
Type C - Provides consumers with new or more benefits than competitive offerings currently available in the marketplace
What are lifestyle ventures?
1) Most “one-man shows” or mom-and-pop-stores
2) Owners often risk savings to finance business
3) Works long hours for low profits
4) High risk of failure
5) Profit in reselling the business is low
6) Most of the capital goes towards fixed capital and inventory
What are Small, Profitable Ventures?
1) Small manufacturing firms, larger restaurants, retail firms
2) Usually involves a large capital investment of at least 500,000$
3) Once established, owners do well financially
4) Profit in reselling the business can be high
5) Their business advantage may be the location (Purchased many years ago for cheap), patented process or trademark.
What are the characteristics of High-Growth Ventures?
1) Fewer companies but more publicized
2) Usually In the High-tech industry
3) Often bought and absorbed by larger companies
4) High potential for capital on resale
What are the 4 main ways to search for an idea? (Figure 2.4)
1) From your previous employment
2) From hobbies
3) From casual observation
4) From a deliberate search
What are the 6 sources of deliberate search?
1) Magazines/internet
2) Trade shows
3) Product licensing
4) Friends and other social contacts
5) Government agencies
6) Creative thinking
What are the 6 steps of evaluating your idea?
1) Identify your business and personal objectives.
2) Learn more about your favourite industries.
3) Identify promising industry segments.
4) Identify problem areas and brainstorm solutions.
5) Compare possible solutions with your objectives and opportunities in the marketplace.
6) Focus on the most promising opportunities
What are the 3 ways to proceed once identify a business opportunity?
1) Buy a business
2) Aquire a franchise
3) Start a business of your own
What are the 5 categories to make an assessment based on The Venture Opportunity Screening Model (VOSM)?
1) The assessment of the market opportunity
2) The role of innovation
3) Strategic potential
4) The investment, risk, and return situation
5) The effectiveness of the people involved in the venture
