There are millions of entrepreneurs throughout the world and their testimonies suggest that there are many potential various sources of new viable business ideas or sources of entrepreneurship ideas/sources of business opportunity. Some of the more useful ones are outlined below.
A hobby is a favorite leisure-time activity or occupation. Many people, in pursuit of their hobbies or interests, have founded businesses. If, for example, you enjoy playing with computers, cooking, music, traveling, sport or performing, to name but a few, you may be able to develop it into a business. To illustrate this, if you enjoy traveling, performing and/or hospitality, you may consider going into tourism – which is one of the biggest industries in the world.
Personal Skills and Experience
Over half of the ideas for successful businesses come from experiences in the work place, e.g. a mechanic with experience in working for a large garage who eventually sets up his/her own car repair or a used car business. Thus, the background of potential entrepreneurs plays a crucial role in the decision to go into business as well as the type of venture to be created. Your skills and experience are probably your most important resource, not only in generating ideas but also in capitalizing on them.
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A franchise is an arrangement whereby the manufacturer or sole distributor of a trademark, product or service gives exclusive rights for local distribution to independent retailers in return for their payment of royalties and conformity to standardized operating procedures. Franchising may take several forms, but the one of interest is the type that offers a name, image, method of doing business and operating procedures.
In the 1980s and early franchising experienced tremendous growth, becoming a much- used method of going into business for the millions of enterprises that were starting up in the USA and Europe. In the USA alone, there are over 2,000 types of franchise businesses, accounting for over US$300 billion in annual sales revenue and about a third of all retail sales. Apart from buying a franchise, one can also develop and sell a franchise concept. There are many directories and handbooks as well as associations, including the International Franchise Association, which can provide further information.
The mass media is a great source of information, ideas and often opportunity. Newspapers, magazines, television, and nowadays the Internet are all examples of mass media. Take a careful look, for example, at the commercial advertisements in newspaper or magazine and you may well find businesses for sale. Well, one way to become an entrepreneur is to respond to such an offer.
Articles in the printed press or on the Internet or documentaries on television may report on changes in fashions or consumer needs. For example, you may read or hear that people are now increasingly interested in healthy eating or physical fitness.
You may also find advertisements calling for the provision of certain services based on skills, for example accounting, catering or security. Or you may discover a new concept for which investors are required, such as a franchise.
Another way to find the ideas for a business is to attend exhibitions and trade fairs. These are usually advertised on the radio or in newspapers; by visiting such events regularly, you will not only discover new products and services, but you will also meet sales representatives, manufacturers, wholesalers, distributors and franchisers. These are often excellent sources of business ideas, information and help in getting started. Some of them may also be looking for someone just like you.
The focal point for a new business idea should be the customer. The needs and wants of the customer, which provide the rational for a product or service, can be ascertained through a survey. Such a survey might be conducted informally or formally by talking to people – usually using a questionnaire or through interviews – and/or through observation.
You may start by talking to your family and friends to find out what they think is needed or wanted that is not available. Or, for example, whether they are dissatisfied with an existing product or service and what improvements or changes they would like to see.
You can then move on and talk to people who are part of the distribution chain that is manufacturers, wholesalers, distributors, agents and retailers. It would be useful to prepare beforehand a set of questions which might be put on a questionnaire or used in an interview. Given their close contact with customers, channel members have a good sense of what is required and what will not sell. Finally, you should talk to as many customers as possible – both existing and potential customers. The more information you can get from them, the better.
Besides talking to people, you could also get information through observation. For example, in deciding whether to open a shop on a particular street, you can observe and count the number of people going past on given days and besides talking to people, you can also get information through observation. For example, in deciding whether to open a shop on a particular street, you can observe and count the number of people going past on given days and compare these to other sites.
Or, if you are interested in an area frequented by tourists, you ma be able to set up or market products from a craft business. Or you may have noticed that there is no decent restaurant or hotel on a tourist route or in a given town.
One way of ensuring that you are not negligent in this area is to be alert at all times to needs and opportunities to do business. One entrepreneur apparently went round at every cocktail party asking if anyone was using a product that did not adequately fulfill its intended purpose. Another monitored the toys of a relative’s children looking for ideas for a market ruche.
Complaints and frustrations on the part of customers have led to many a new product or service. Whenever consumers complain bitterly about a product or service, or when you hear someone say ‘I wish there was … “or “If only there were a product/service that could … “, you have the potential for a business idea. The idea could be to set up a rival firm offering a better product or service, or it might be a new product or service which could be sold to the firm in question and/or to others.
Brainstorming is a technique or creative problem-solving as well as for generating ideas. The object is to come up with as many ideas as possible. It usually starts with a question or problem statement. For example, you may ask “What are the products and services needed in the home today which are not available?” Each idea leads to one or more additional ideas, resulting in a good number.
When using this method, you need to follow these four rules:
• Don’t criticize or judge the ideas of others
• Freewheeling is encouraged – ideas that seem to be wild or crazy are welcome
• Quantity is desirable – the greater the number of ideas, the better
• Combine and improve upon the ideas of others
Reasons for generating business ideas:
• Business idea generation is a sine-qua-non (inevitable) for business.
• Ideas are generated to respond to market needs
• Ideas are also generated to respond to changing fashions and requirements.
• In order to stay ahead of competition
• To be in tune with latest technology so as to do things better.
• In response to product life cycle
• In order to spread risk and allow for failure.
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