Lecture 4 Building an entrepreneurial idea

Module Tutor: Rosliana Binti Ahmad Razilan

1. Name of your business.

2. What is your business idea? (product/service)

3. Define the type of the business.

4. How will you trading (legal format)?

- Sole trader?

- Partnership?

5. Where will you be trading? (Location)

6. Reasons (motivations) for starting your business

7. The top team – who involved in your business

IDEA GENERATION - OPPORTUNITY

SEEDLING ENTERPRISE

SAPLING ENTERPRISE

MIGHTY OAK

Although NEW is considered to be the second most powerful word in marketing – very few products are absolutely new.

Most products labelled “new” are a variation on an existing product or a combination of two or more products.

Consider an item you have bought recently . .

.

Why did you buy that one rather than one

from a competitor?

One issue explored by market research is

whether the entrepreneur’s idea(s) for

differentiating the product or service will

appeal to the target market segment(s).

And/or to what extent the USP of competitors

appeals to the target market segment(s).

The term was first coined by Rosser Reeves in

the 1940s to explain his advertising campaigns

to customers of Ted Bates advertising agency.

Reeves (1961) believed that every advertisement

must say to the customer: "Buy this product,

and you will get this specific benefit." (pp 46-

48)

Another issue explored by market research is

to what extent the benefits of the product or

service will appeal to the target market

segment(s).

And/or to identify other benefits that appeal

to the target market segment(s).

Major companies often use their USP in their slogan . . .

Amazon.com “Earth’s biggest book store”

Burger King “Have it your way”

BMW “The ultimate driving machine”

DeBeers “A diamond is forever”

Named as the best slogan of 20th century by Advertising Age magazine

The USP states (sometimes helps create) or reinforces how the customer views the product or service.

The USP is what creates brand loyalty.

If the firm does not know clearly what benefits their product or service delivers, then neither will the customer.

Many benefits are subconscious and therefore difficult to identify. Can YOU identify why YOU have a brand loyalty to certain products? Why do people pay for nail-biting theme park rides?

An example: http://www.suffolkrockinghorses.com/ The Premier Model Size : Large 48“ Price £2650.00 The Premier is on a solid oak swing stand Why does someone pay £2650 for what is essentially a child’s toy?

Nostalgia? Status? An heirloom?

We can only buy what is available to us. Many buying decisions are spontaneous, especially for wants rather than needs. In these “internet” purchasing days, could you find a better route to the customer? A route that is more convenient to the customer or more customised to them

Which of these appeals (or does not appeal) to you?

◦ Meeting people face to face

◦ Dealing with people via post / internet / phone

◦ Having repeat customers

◦ Always meeting new faces

◦ Being out and about

◦ Being premises based

◦ Not minding being away from home

◦ Speaking in public

A choose-at-home service (includes residential homes/day centres)

Go to the customer’s workplace

Party plan

Network marketing (MLM)

Attend shows or events

Hold your own event (a one-day sale)

Rent a space in a complementary business

eg earrings in a hair salon

Via agents

In most situations the customer has three choices

1. Not to buy 2. To buy from the competition 3. To buy from YOU

The aim of the market research is to identify how to make them choose option 3.

Hawkins, Barrie and Wing, Luke (2009)

How To Start A Business When You’re Young. London: A&C Black

. . . is an accessible text aimed at your age group

Appendices 6 and 7 list some basic and practical ideas for business start-ups

Entrepreneur

Technical Innovator

Delivery Specialist

Sales

Finance

1. Define Products and Services

2. Define the Market

3. Define Main Competitors

4. Define Resources

Every business relies on selling something. That

something can be product or service. Until now you have an idea that obtains some type of product or service for your future or current business. The next thing that you must to do is define accurately and clearly those products or services. Questions that you as an entrepreneur will need to answer are:

• What product or service you will offer? What are the features of that product or service? What are the benefits for potential users of that product

or service? What will be additional services offered by that product

or service?

You already have an idea, and you already have

defined the product or service that will be offered to the market. The next thing that you must to do is clearly, precisely and unambiguous define a market that will be served with these products or services. Here are some questions that you as an entrepreneur must answer:

•In which market you will offer that products and services (city, region, country, continent, …)?

•What will be the consumers of these products or services?

•What are the features of those consumers that will consume your products or services (sex, age, income, ethnicity …)?

Next important element after the products, services and

market are competitors. Do not make the mistake of underestimation of the competitors, because the success of your business in large part will depend on their performance. It is necessary precisely to define the main competitors who are already on the market that you previously defined. Here are some questions that you as an entrepreneur must answer:

•What are the 5 largest market players in the industry in which your business idea is categorized?

•What, where and how that 5 major market players offer their products and services?

•What are the features of their products or services? •What are the benefits that they provide to the market with

their products or services? •What is the resistance of the market about entry of new

competitors and how difficult it can be accomplished?

You already have an idea, have defined your products and

services, have defined market where you will offer those products and services and have defined the major competitors, and what they do. Now it is time to define the necessary resources if you want your idea to become a reality. You will need to define a minimum the following:

How many human resources will be needed? What kind of intellectual capital you will need for your

business? How much financial resources is needed? Where you will find that financial resources? What material resources will be needed? Where you will find that material resources? What information resources will be needed? What will be the sources of that information resources?

A business plan outlines the company’s expected course of action for the medium term. This should be in the context of the industry, market, products, policies, capacity and resources. It should not be a one-off exercise, but a document which is regularly used and revised. Its purpose is to help the business:

‘…meet the expected and unexpected opportunities and obstacles the future holds… a guide to navigate successfully through its unique competitive environment.’

‘Although the development of the plan does provide some useful practice in the research and presentation of business information, there is a need for a greater focus on the underlying transferable skills that students will be able to use in the business life/career generally’

Preface to ‘Streetwise Guide to Being Enterprising’ Gibson 2009

A mechanism or tool to explore and systemise the building of relationships with stakeholders

-Funders

-Suppliers

-Sources of market demand (customers/ clients/commissioning bodies (social enterprise) This process is based on the principle of trust