THE PRODUCT OR SERVICE
OFFERING MAY BE IMPROVED IN
SOME TERMS OF:
1. Performance, like the chair that can carry
more weight
2. Maintenance cost, like the car battery that
requires less servicing than competing brands
3. Acquisition cost, like the latest low priced
model of a certain brand of cellphone
compared to competition
4. Salvage value, like the steeel filling cabinet
that has a higher value and uses, like the fly
paper that can also be used as mousetrap
CHAPTER 5:
THE SEARCH FOR
SOUND BUSINESS IDEA
CHAPTER OBJECTIVE
To assess and determine the best business idea
Topics:
Procedure in determining the best business idea
Methods of searching for ideas
Screening generated ideas
Organizational culture and creativity
What is a Sound Business Idea
May be defined as the economic
opportunity which is within reach of
the entrepreneur and which will
provide him a desirable value.
Different forms of Business
Ideas
1. An old type of business can be
professionalized.
2. A standard product can be customized.
3. New technology can be adapted to
manufacture an old product.
4. Imported products can be replaced by
local products.
5. Business operations can be
internationalized.
Procedure in Determining Best
Business Idea
1. Preparation of the list of business ideas
a. Unanticipated means (person’s work, person’s hobbies, person’s
acquaintances, and a chance event encountered by the person)
b. Deliberate search (using search questions and idea prompting)
2. Screening of listed ideas
1. Market feasibility
2. Technical feasibility
3. Financing feasibility
4. Financial feasibility
3. Final Selection
1. Status quo
2. Shorter list
3. Zero listing
Screening Generated Ideas
Market Feasibility
◦ Positive indications: (1) stable and sufficient
demand (2) potential competitive strength of
the firm
◦ Sources of Market Information (1) Prior
studies of the market or related markets by
the company (2) actual poll of population
samples (3) negotiations with prospective
customers to solicit orders
Final Selection
1. Final Selection
1. Status quo – means all business ideas
listed passed the adapted criteria
2. Shorter list – means some of the ideas
generated were eliminated
3. Zero listing – means all business ideas
generated were eliminated.
Screening Generated Ideas
Technical feasibility – the business ideas
must be easily converted to real products
or services.
Financing Feasibility- there should be
sufficient funds to finance operations.
◦ Sources of funds: (1) proposed owner’s
savings (2) relatives and friends (3)
financing institutions
Screening Generated Ideas
Financial feasibility - analysis of financial
prospects of the proposed business idea
(1) income statement – summarizes revenues,
expenses, and profits over a given period
(2) balance sheet statement – shows planned
or expected financial position of the enterprise
on a particular date.
(3) cash flow statement – shows the planned
or expected cash sales and or purchases.
NEXT MEETING:
ORGANIZATIONAL CULTURE &
CREATIVITY
Characteristics
1. Encouragement for creativity and risk-taking
2. Rewards for creativity
3. Open communication
4. Allowance for errors
5. A climate for participation
6. Structural mechanisms that aid creativity
7. Training in the creative process
8. Flexibility
SEATWORK
Prepare ¼ yellow pad
SUPPLY THE ANSWER
1-3
May be defined as the 1. ________
opportunity which is within reach of the
2. ________ and which will provide him
a desirable 3. _______.
May be defined as the economic
opportunity which is within reach of the
entrepreneur and which will provide him
a desirable value.
Unanticipated means or
Deliberate search
4. using search questions
5. person’s hobbies
6. chance event
7. person’s work
2. Reward for creativity;
There is an assurance that such activity will continue existing.
3. Open Communication;
‘’Open Communication’’ Free-flowing exchange of ideas
between the members of an organization.
Communication flow through the vertical and horizontal
relationships in the organization’s structure.
4. Allowance for errors;
When an error detected a move should be made to
correct it.
When it is done , the creative individual is not discouraged
from pursuing his creative endeavors in the end, it is the
company that benefits.
SUPPLY THE ANSWER
8. Status quo – means all business ideas
listed passed the adapted criteria
9. Shorter list – means some of the ideas
generated were eliminated
10. Zero listing – means all business ideas
generated were eliminated.
Organizational Culture and
Creativity
Creative organization characterized by the following.
1. Encouragement of creativity and risk-taking;
Creativity refers to activities involved in finding solutions
to problems hinder the achievement of the firms objective.
Proactive ways to solve problems.
Testing an idea however require a certain measure of risk
taking that means the idea may turn good or bad.
The organizational culture that characterized by risk
taking is not discouraged by poor result in testing ideas.
After a series of failure the single idea that oases the tests
and which later becomes successful justifies all the efforts
and expenses involved in finding the right one.
5. A Climate participation;
When somebody feels that the organization espouses
participation, that person will not hesitate to make a
contribution to the creative efforts of the organization.
The firm will benefit from the good effects of employee
participation.
More bright ideas will be generated if employees feel
free to participate in the creation of solutions to
problem.
6. Structural Mechanisms that Aid Creativity;
The urge to create solutions to problems would be
heeded by the innovative person more easily if there are
structural mechanisms within the organization to support
the exercise.
7.Training in the Creative Process
Creative pursuits are bit complicated and it will help if
those expected to perform such functions are properly
trained.
Although some persons have natural talents for generating
business ideas, those who are not considered as such would
benefit from acquiring the required skills through training.
8. Flexibility
One of the distinct characteristics of the creative
organization is flexibility.
The creative employee is allowed to engage in creative
activities on hours most convenient to him and the company.
Flexibility may also applied to place of work, like allowing
the creative employee to work in the place where he feels he
can more creative.
END
