GENERATION OF BUSINESS IDEA

GENERATION OF BUSINESS IDEA

Pawan Kumar Jain

The foremost task of a dynamic entrepreneur is the generation of an idea that is new and appears to be worthwhile for further use. This involves a lot of creativity on the part of the entrepreneur. The business idea arises from an opportunity in the market. It originates from real demand for any product or service that an entrepreneur should have a keen and open mind to look for opportunities and generate business ideas.

While selecting a business idea, the following points need adequate consideration: 

1.     The business idea should enable the entrepreneur to utilize his technical and professional skills. If an entrepreneur has knowledge of some special manufacturing techniques, because of previous experience or otherwise, it would be easier for the entrepreneur to manage such techniques effectively.

2.     It should enable the use of locally available raw materials for product or service. As compared to imported materials/ local materials are easy to procure.

3.     It should ensure making products that have a demand, but are not freely available in the market. It is potentially a good idea to start with a product that could be sold.

4.     It should enable the entrepreneur to solve a current problem existing in the market. Products may be available in the market but they do not meet the demand fully or in a satisfactory manner. Sometimes, an existing product is used in combination with another, which is not available. Attempts to solve such market problems do give rise to business ideas.

Sources of Information for Business Ideas 

As said earlier, generation of project idea is the starting point in product development. For this, an entrepreneur can refer to potential studies prepared by different organisations. There are a number of potential studies conducted by several organisations like the National Council of Applied Economic Research (NCAER), financial institutions and other promotional organisations such as Confederation of Indian Industries (CII), etc. These may include the following: 

1.     Area studies which identify development potential of particular areas like a backward area or a district.

2.     Subsectoral studies which identify opportunities in specified subsectors (such as food processing).

3.     Resource-based studies which identify opportunities based on utilisation of natural or industrial resources such as forest-based industries, marine-based industries, industries using rubber as the main raw material, etc.

4.     Studies of the product consumption pattern of the country.

5.     Surveys of existing industrial establishments.

6.     Import and export possibilities.

7.     Demand forecasts made by Industrial Chambers such as CII, FICC1, ASSOCHAM, etc.

Approaches to Generating Ideas 

While exploring different sources of business ideas, an entrepreneur can use the following approaches to generate ideas:

1.     Brainstorming. It helps in generating a large number of product ideas. It should be conducted by an expert and none of the ideas mentioned should be evaluated or judged. At this stage one should not worry if the ideas are suitable or not.

2.     New ways of doing old things. A large number of products are being made and provided in the market using traditional methods and practices. One approaches can be to examine if these could be made by a different and newer method that would give the entrepreneur an advantage over the older methods.

3.     Converting hobby into business. Some people are adept at doing something or the other as a hobby or for use in the house only. It is possible to use such skills to set up an enterprise. Hobbies like photography, interior decoration, fashion designing etc. are often developed as business ventures.

4.     Improving an existing product. An existing product can be improved by using old techniques with more care or using newly developed technology.

5.     Utilising waste material. Conservation and environment protections are presently getting a lot of attention. Recycling waste or turning them into useful products are good product ideas. Presently, energy conservation products also have good potential.

Selection of Project Idea 

At this stage, all the project ideas are screened on the basis of well defined criteria to eliminate ideas which are not promising and select the best idea. While selecting the idea, the following facts should be considered:

1.     The project should be compatible with the objectives and resources of the entrepreneur. It should also match his capabilities and skills.

2.     The resources required for the project such as capital requirements, technical know-how, raw materials, power supply etc. must be reasonably assured.

3.     The cost structure of the proposed project must enable it to realise reasonable returns on investment.

4.     The effect of external environmental factors such as technological changes, state of economy, competition, etc. should be considered.

5.     The project idea should be consistent with the government policies, licensing requirements, environmental regulations, foreign exchange regulations, etc.