Small Business Management 4660

entrepreneurs were asked about their decision making process. Almost half decided they wanted to start a business before they had an idea.

1. Source of Business Ideas Entrepreneurs have the ability to take ideas we all see and turn them into businesses. Known as opportunity recognition.

Entrepreneurs are not necessarily smarter than non-entrepreneurs They seem to possess entrepreneurial alertness or the ability to recognize opportunities better – formula*

Entrepreneurial ideas – a number of sources: 1. Pre-existing businesses and get an idea that’s a twist on what’s being done, or see a niche with an unmet need. 2. Hobbies may lead to ideas. 3. By serendipity or chance. (Come across by being in the right place at the right time)

4.Family and friends often come up with suggestions for new products or services. 5.Use their education or experience to a launch business.

6. Technology may be licensed or transferred from universities or the government or any organization(R & D). An organization, or licensor, will offer licensee, the rights (license) to use a particular piece of intellectual property. Licensee will pay an upfront fee or an annual royalty.

2. SCAMPER Method Many traditional creativity methods E.g. exploring the Internet for information, trade fair, special interest magazine – to generate ideas Similar ideas

A creative method to come up with new ideas SCAMPER is an acronym for seven cues to trigger new ideas. Substitute Combine Adapt Magnify or Modify (or Minimize) Put to Other Users Eliminate Rearrange or Reverse

Substitute Replace one component with another. Trigger: What opportunities can you think of as a result of substituting or replacing something that already exist? E.g. Online newspapers (Malaysiakini), Digital camera (Old Film Camera) 4-10

Combine Merge two components into one possible combinations that result in something completely different Trigger: What separate products, services, or whole business can you put together to create another distinct business? E.g. Touch ‘n’ Go 4-11

Adapt What can I adapt or copy from someone else’s existing products or services Radical innovations: rejecting existing ideas, and presenting a way to do things differently Trigger: What could you adapt from other industries or fields to your business? E.g. PC wrist watch 4-12

Magnify (or Modify) taking an existing product and changing its appearance or adding more features can also cue you to minimize something Trigger: What could I make more noticeable or dramatic, or different in some way from my competitors? E.g. Children playground 4-13

Put to other uses challenge to think of all potential uses for a product or service Trigger: Suppose you learned that all the traditional uses for your product had disappeared; what other uses might there be? E.g. GPS vehicle tracker – personal tracker 4-14

Eliminate search for opportunities that arise when you get rid of something or stop doing something Trigger: What could I get rid of or reduce that would eliminate something my customer has to do? E.g. Ordering food online (no need to buy or eat-in) 4-15

Rearrange (or reverse) Using reverse psychology or paradox to challenge old ways of thinking Reversing the order of components Idea Trigger: What can you rearrange or reorder in the way your product or service appears? E.g. Airasia 4-16

3. Personal Practicing Read magazines or trade journals outside your area. Invite someone you never included before to a meeting where you are solving a problem or searching for a new opportunity. Have a “Scan the Environment” day.

Try a mini-internship. Instead of trying to simply sell your product or service to customers, put yourself in their shoes.

4. Five Major Pitfalls Identifying wrong problem: look at it from several ways to make sure you’ve found the right problem. Judging ideas too quickly: times change and something that was rejected earlier might be perfect solution this time. Stopping with the first good idea: you may just be getting warmed up and might come up with even better ideas.

Failing to get the “bandits on the train” and asking for their support: get those people involved that will have to live with the problem or are most likely to throw up road blocks. Obeying rules that don’t exist: think outside the box.

5. Action Plans Entrepreneurs may decide - no need to react and they should continue as it is. May follow imitative strategy and essentially duplicate what someone else has done.

Follow an incremental strategy and improve on an existing idea (slightly better). Follow an innovation strategy where they reject current ideas and find a totally new way of doing things.

Caution: Not every good idea is a viable idea. To decide if the idea should be considered further, ask the right questions.

Idea to Product (I 2 P) or Invention to Venture (I 2 V) analysis offers a good framework for doing this. What is your product or idea? What is the technology that underlies your product/idea? Is your underlying technology unique? Is your product of idea innovative? Who will buy it?

Why will they buy it? Describe how you create value for your customers. What is the market and its size? How do you anticipate developing IP protection for your technology? Who are the people behind the idea? What resources are needed to take the idea and sell it to the customer? Can the idea generate sufficient profit?

7. Brainstorming Exercise A technique used to generate a large number of ideas and solutions to problems quickly. Involves a group of people, and should be targeted to a specific topic. Rules for a brainstorming session: No criticism. Freewheeling is encouraged. The session should move quickly. Leap-frogging is encouraged.