Unit-II_Business Ideas and their implementation ((Idea to Start-up)).pptx

Business Ideas and their Implementation

1. Unit-II Business Ideas and their implementation (Idea to Start-up) Mr. Hiren U Tandel Lecturer in Mechanical Engineering Government Polytechnic, Waghai

2. Finding Ideas and making an activity map. Discovering ideas and visualizing the business with Activity map. Idea Generation. Product Identification Develop the plans for creating and starting the business. Business Plan- The Marketing Plan and Financial Plan/ Sources of Capital. To identify business using the ideation canvas and the business model canvas. Business opportunity identification and evaluation. To know market research related terms. Market research Questionnaire design Sampling Market survey Data analysis & interpretation 2 Content:

3. To know market, mix related terms. Marketing Mix (4Ps- product, price, promotion place) Identifying the target market Competition evaluation and Strategy adoption Market Segmentation Marketing, Advertising and Branding Digital Marketing. B2B, E-commerce and GeM. Learn Product related terminologies. Product Terms- PLC Mortality Curve and New product Development Steps Inventory Supply Chain Management Emphasize on Innovation. Importance and concept of Innovation, Sources and Process Explain concept of Risk and SWOT. Risk analysis and mitigation by SWOT Analysis 3

4. 4 CO2: Identify a Business Idea and implement it.

5. 5 Finding Ideas and making an activity map. Discovering ideas and visualizing the business with Activity map. Idea Generation. Product Identification Develop the plans for creating and starting the business. Business Plan- The Marketing Plan and Financial Plan/ Sources of Capital. To identify business using the ideation canvas and the business model canvas. Business opportunity identification and evaluation. PART - I

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7. 7 Entrepreneurship Entrepreneurship is a ship on a voyage that has on board, innovative and creative men and women, who like to do all those constructive things which nobody could lay his/her hands on before. They make a fortune out of ideas. Success never goes to their heads and each set back makes them bold enough to carve their future, aiming for excellence. Entrepreneurship is the freedom to do what one likes to do, with all its attendant profits and risks. Entrepreneurship is defined by results and not by attributes. It is a passion and all about commercial risks. A true entrepreneur uses not only his/her senses one to five, but six, seven, eight and nine. Six to nine do not really exist, but he/she develops them through his/her exposure, experience, failures and following the concept of listening to understanding.

8. 8 ENTREPRENEUR is a person who: Develops and owns his own enterprise. Is a moderate risk taker and works under uncertainty for achieving the goal. Is innovative. Reflects a strong urge to be independent. Persistently tries to do something better. Is dissatisfied with routine activities. Is prepared to withstand the hard life. Is determined, but patient. Exhibits a sense of leadership. Exhibits a sense of competitiveness. Takes personal responsibility. Is oriented towards the future. Tends to persist in the face of adversity

9. Idea generation: The process of creating, developing, and communicating ideas which are abstract, concrete, or visual. It includes the process of constructing through the idea, innovating the concept, developing the process, and bringing the concept to reality. 9

10. Various sources of idea fields: Natural resources. Existing Product or Services. Market or Demand Driven. Trading Related. Service Related. Creative Efforts. 10

11. Natural resources: Ideas can be generated based on natural resources. A product or service may be desired from forest resources, agriculture, horticulture, mineral, animal husbandry, wind, sun and human resource. A further exercise with a field may generate many useful product ideas . Natural Resource Existing Use Potential Use Citrus and other fruits Juices Selling of preserved fruits for supermarkets Bottled local juices for sale Medicinal herbs Remedies Medicines and bio fertilizers 11

12. Natural Resource Existing Use Potential Use Lumber Timber Furniture and other wood-based products Horticulture Plant cultivation Food preservation, canning, freezing and pickling 12

13. Natural Resource Existing Use Potential Use Clay Soil Ceramics Flowers Selling in market Selling at a wider scale, to provide to floral decorators 13

14. Natural Resource Existing Use Potential Use Water resources (Sulphur spring, waterfalls) Domestic and recreational use Paid tours for visitors and tourists. Opening of a water plan 14

15. Existing products or services: A great business idea combines skills with imagination and market demand. A business opportunity or idea often comes from everyday problems that someone solves. Successful businesses find a need and fill it by providing a service or product. Entrepreneurs who look at ways to a constant and consistent effort on the part of all entrepreneurs to improve the products and services already existing in the markets. How do you improve or change existing products? Change or improvement can come about in many ways. Perhaps you sell a skincare line and would like to change the ingredients around a little. Or maybe you run a math tutoring business and would like to expand into other subjects, like science or commerce. Keep up with the competition: for example, you own a hair product supply store that sells flat irons for straightening hair. More and more places are selling ceramic irons as hair experts say they are better for hair. In this case, it would be advantageous to update the products to reflect the latest in technology. Increase sales: The main reason people will change and improve their existing product line is to increase their sales and ultimately, their revenue. By adding to the product line, you can take your company in a new direction by increasing sales. 15

16. Market driven or demand driven ideas: Market research is a key factor to maintain competitiveness over competitors. Market research provides important information to identify and analyze the market need, market size and competition. Whatever the source of information about the market, it is a promising field for generation of ideas. It systematically develops product ideas to satisfy the aim of the project and therefore the business strategy. Idea generation is knowledgeable, creative and systematic. It develops from knowledge of the consumer, the market, the technology and the general environment, and it creates newness in product, production and marketing. 16

17. Trading related ideas: Trading these days is not limited to ordinary grocer or distributor outlets. With increasing consumerism, the scope and nature of trade has enlarged; local trade, import and export, e-commerce are all making trading a very wide area of enterprise. Trade, in simple terms, is buying goods and services and selling them to consumers at a profit. One big advantage that trading has over other types of businesses is that it is easier to launch and less risky. Service sector ideas: Entrepreneurial opportunities are not only restricted to the manufacturer. Service sector is the most growing field these days, the world over, thanks to emerging knowledge societies and advancements in Information and Technology. 17

18. Amongst the most interesting ones in the food sector are the following: Indian fast food/finger food: McDonald's and Pizza Hut can be the role models in terms of efficiency of service, hygiene, quality, and overall value, but the menu should be "Indian" rather than Indianized version of American food. Family dinner: Indian version like Nirula's offering Indian style "Plated or Combo" meals, with table service and overall good price-value equation. 18

19. Sandwich and salad parlours: Subway's success in select locations, despite somewhat inconsistent product quality, poor service, and high prices, indicates the tremendous opportunity in this segment. Ice-cream and juice/beverage parlors: Sadly, there have been many start-ups, and some continue to do well. However, there is a glaring gap between the appropriate price/value, need and the available options. Indian "desserts" and "snack food" chains: Lastly, in the genre of food and food service chains, one of the biggest opportunities remains in starting national or at least regional chains offering Indian sweets, namkeen/ farsans , and snack-foods such as pakodas and samosas. Haldiram's success should certainly put any doubt on this opportunity to rest. What is needed is a belief that the Haldiram business model can be replicated (and certainly improved upon from the customer service perspective) by even large business houses such as ITC and others. 19

20. Specialty tourism: India is incredibly blessed with one of the most diverse set of options when it comes to tourism. Fortunately, the perception of India as a tourist destination is also undergoing a very big positive change outside India. Creating specialized options for high-end tourists (from abroad) offers a tremendous potential, with many segmentation possibilities based on the target market as well as special interests. Personal grooming salons: It may surprise some that the biggest organized player for personal grooming, with focus on hair care, example, Habib's to talk about. Career counselling centers: With over 25 million births per year, and at least 3 million of these likely to go for studies beyond the 12th grade but having little idea about the job and vocation trends in India and beyond, this is one sector that is poised for rapid growth. 20

21. Chain of repair and maintenance services for electrical/electronic products: India is seeing a massive increase in the penetration of electrical/information technology products. Yet, the ambient infrastructure, as well as relatively low-income levels, requires most of these gadgets to be given for repair unlike the more affluent countries where many faulty appliances/gadgets may just be "written off" by the consumer in view of the high cost of repairs. India's low labor–related service costs can provide a cost-effective solution to the millions, while generating good returns on investment for the entrepreneur. 21

22. Creative efforts: We have seen that creativity is an important and key component of the talents and abilities needed for an entrepreneur. Apart from applying creativity to spot and harness opportunities, it can also be applied to develop new products and services. There are basically five ways in which creative ideas can be generated: Develop a new product or service. Improve an existing product or service. Find a new process or resource for manufacturing a product. Find new markets for existing products or services. Find a new use of an existing product or service. A very useful concept to bear in mind is that, most often creative products and services are born as results of problem solving. Someone found that while tightening screws, over tightening often resulted in damage to the fixtures. Here was a problem and the solution came in the form of a self-adjusting screwdriver which prevented over tightening. 22

23. Bill Gates, who as an undergraduate at Harvard, developed BASIC for the first microcomputer. He later found Microsoft in 1975. During the 1980s, IBM contracted with Gates to provide the operating system for its computers, a system now known as MS-DOS. Gates procured the software from another firm, essentially turning the thirty-dollar pair of jeans into a multibillion-dollar product. Microsoft's Office and Windows operating software now run on about 90 percent of the world's computers. By making software that increases human productivity, Gates expanded our ability to generate output (and income), resulting in a higher standard of living for all. 23

24. Sam Walton, the founder of Wal-Mart , was another entrepreneur who touched millions of lives in a positive way. His innovations in distribution warehouse centers and inventory control allowed Wal-Mart to grow, in less than thirty years, from a single store in Arkansas to the nation's largest retail chain. Shoppers benefit from the low prices and convenient locations that Walton's Wal-Marts provide. Along with other entrepreneurs such as Ted Turner (CNN), Henry Ford (Ford automobiles), Ray Kroc (McDonald's franchising), and Fred Smith (FedEx), Walton significantly improved the everyday life of millions of people all over the world. 24

25. Transformation of ideas into opportunities: While the initial spotting of ideas (i.e., basic idea) is of a random nature, the development of ideas after scanning the environment (i.e., post scanning) idea is a more purposeful activity. This process of a basic idea becoming an opportunity is shown in the diagram below: This simply means that knowledge, skills, competencies and creative thinking needed to develop an idea are backed by factors critical for market success. When knowledge, skills, competencies and creativity are strategically applied or market orientation, a viable venture is born. 25

26. Product identification: After opportunity spotting and scanning of the environment, an entrepreneurial idea should lead to a definite product. Idea and opportunity assessment In a sense generating ideas is relatively an easy exercise, especially if it is done in groups. However, this process can also become a wild goose chase because all ideas need not necessarily become sound business opportunities. We have to assess it in terms of the potentiality of the opportunity. The steps involved in this type of investigation are discussed below: Product identification: An idea should lead the entrepreneur to a definite product/service which he can sell. So, the first step is to obtain a concept of the product or service suggested by one idea. We should also see whether this product is already available in the market or not. If it is, then we should identify the reason for introducing the same product or service in the market. For example, innovating a new pen-drive especially for teachers which will have a built-in antivirus and which can be worn like a watch, so it minimizes the problem of losing the pendrive. 26

27. Application and use Ideas should be examined for their real-life use and application. If it already exists in the market, we will have to find out its present use, then we may think of modifying it for better use. In the above-mentioned example, we can clearly see that even though there are many companies manufacturing pendrives, the latest will be in consonance with the upcoming trends. Level of operation This is a crucial test for product/service identification. Depending on the use of the product/service the entrepreneur will produce it in a cottage industry or a small scale–industry or a large–scale industry. 4. Cost What is the per unit cost of the product at particular level of operation? Whether this cost is comparable with that of other competitive products? These are some of the questions that have to be answered. This will ultimately decide the sale price. Competition Any product or service will face market competition at some stage. So market competition should be assessed through a study of the trends in demand and supply. 27

28. Technical complexity What type of technology is required to produce the product? Whether training and application of such technology will be locally available, or will it have to be supported from other places? What would be the position of supply of plant and machinery for such a technology? These are important issues that have to be resolved. Annual turnover and profit margin Ideas should also have to be examined on the basis of expected annual turnover. This will also indicate the market share of the product or service. Once the entrepreneur has assessed the opportunities on these basis he/she should go ahead and assess the market also. 28

29. 29 What is the business plan? Planning can thus be defined as "thinking in advance, what is to be done, when it is to be done, how it is to be done and by whom it should be done." The business plan is a formal statement of a set of business goals, the reasons they are believed attainable and the plan for reaching those goals along with the background information about the organization or/and team attempting to reach those goals. Business plans are decision-making tools: Describing all necessary inputs for the enterprise. Explaining the mode of utilization of the resources. Detailing the strategies for the execution of the project. Outlining the desired goals. Assessing market sensitivity and the profitability of the venture. Thus, the content and the format of the business plan is such which is able to represent all these aspects of the business planning process.

30. 30 Who should write the Business plan? A business plan represents all aspects of the business planning process declaring vision and strategy alongside sub-plans to cover: Marketing Finance Operations Human resources Legal compliance Intellectual property rights, etc. The entrepreneur to consult with many other expert professional sources in its preparation like: Lawyers, Accountants, Marketing consultants Engineers Internet sites Officially appointed or/and set-up Banks, Specialized financial institutions or Agencies to promote entrepreneurship Friends, relatives, mentors etc.

31. 31 Importance of the business plan The business plan is valuable to who are trying to familiarize themselves with the venture, its goals, and objectives. The business plan helps in determining the viability of the venture in a designated market helps in providing guidance to the entrepreneur in organizing his/her planning activities as such: identifying the resources required enabling obtaining of licenses if required etc. working out with legal requirements as desired by the government. helps in satisfying the concerns, queries, and issues of each group of people interested in the venture. provides room for self-assessment and self-evaluation, requiring entrepreneur to think through various scenarios and plan ways to avoid obstacles. though not desirable, at times, business plan helps to realize the obstacles which cannot be avoided or overcome, suggesting to terminate the venture while still on paper without investing further time and money. as the investors/lenders focus on the four Cs of credit : character, cash flow, collateral and equity contribution, it is the business plan which reflects the entrepreneur's credit history, the ability to meet debt and interest payments, and the amount of personal equity invested thus serving as an important tool in funds procurement.

32. 32 Formats of a business plan: Depending upon the entrepreneur's experience, knowledge and purpose, generally a business plan outlines sequentially following components or parts: Introductory cover page/general introduction Business venture Organisational plan Production plan Operational plan Human resource plan Marketing plan Financial plan Miscellaneous/appendix For Business Plan Format Example: Please Click on this Link – Business Format

33. 33 To know market research related terms. Market research Questionnaire design Sampling Market survey Data analysis & interpretation To know market, mix related terms. Marketing Mix (4Ps- product, price, promotion place) Identifying the target market Competition evaluation and Strategy adoption Market Segmentation Marketing, Advertising and Branding Digital Marketing. B2B, E-commerce and GeM. PART - II Concept of Market

34. 34 Market: The word "market" is derived from the Latin word ' marcatus ' meaning merchandise, ware, traffic, trade or a place where business is conducted. Traditional Markets: The phase of 'pre-industrial revolution' world was characterized by an agriculture-cum-handicraft economy, with no elaborate distribution system. The agriculturist, whether he produced corn or cotton, meat or butter disposed of the surplus in his immediate neighborhood. Market of Seventies / Eighties –Modernized Version: Every business activity is consumer oriented. According to Peter Drucker ―the purpose of business is to create customer" and customers do not have geographical boundaries. Emerging Markets: E-Commerce 'Market‘ is emerging as any form where the transaction between the buyer and seller is because of interacting electronically using telecommunication network the world over - so whole world is a potential Market, with no requirement of physical presence of a buyer or seller. Internet - commerce has thus broadened the definition, scope and range of markets

35. 35 Market Research Market Research is referred as the systematic study and evaluation of all factors bearing on any business operations which involves the transfer of goods from a producer to a consumer. Manufacturers, retailers, suppliers of all kinds of services and many other organizations, need certain kinds of information in order to be able to satisfy their customers' wants and needs, to design effective marketing programs and to deal with recurring decisions. Given the diversity in consumers' characteristics, a firm should be able to determine the most appropriate market/product/information so as to choose a combination of marketing programmes which could satisfy the customers. One of the initial, important elements of information needed by the entrepreneur is the "market potential" for the product or service. Why Market Research Required?

36. 36 Main Steps Involved in Marketing Research

37. 37 Market Research Instruments: Research instruments mean the instruments, tools methods or techniques employed in research for gathering the information/response. One such most commonly used instrument by the entrepreneurs, is Market Survey . i.e., Food Kraft and Nissan Research. Market Survey: To compete the present market scenario, the day-to-day information is essential for the organization and its long-term survival. M arket survey is just one method/technique of collecting information required for carrying out a given marketing research task. Common Methods used for Surveying: Where you actually speak to members of your target audience, is a survey. It can be conducted through: (i) Personal interviews (ii) Telephonic interviews (iii) Direct mail interviews (iv) Fax/E-mail interviews (v) Online interviews (vi) Questionnaire Development (vii) Field work

38. 38 Steps in a Market Survey: Step 1 - Planning the Survey: The entrepreneur must first of all decide what is it, he/she wants or needs to know about the market. Planning the survey demands on the part of entrepreneur to: Define the problem clearly and accurately Select the most appropriate method to conduct the survey viz. personal interview, Telephonic etc. Decide the area and extent of the study: An entrepreneur must identify the magnitude of study whether he wants to survey each and every unit of the market i.e. census survey or would select variable/units for study and apply the result to the universe, i.e., sampling. Questionnaire development: Questionnaire development is an important part of the market survey, demanding a lot of expertise and resourcefulness. Entrepreneur should go over it with others on the management team, making sure it provides the information he needs to know and is based on his objectives. He should make sure the questionnaire is not too complicated and is appropriately worded.

39. 39 Step 2: Field Work Field work calls for a lot of managerial and administrative skills apart from research skills. Thus, the entrepreneur should ensure that:- Investigators for fieldwork are scientifically recruited or properly trained for the work. It is properly supervised, The time schedule is adhered to, Responses are honestly and accurately recorded The collection of data is done meticulously. Step 3: Analysis and Interpretation of Data: The raw data serves no purpose. The entrepreneur either by using software program or by hand, tabulate the collected data. Carefully he should analyze the data, working for information that standout, and the data is:- Edited Tabulated processed and interpreted Statistical analysis and interpretations recorded If the entrepreneur is not able to do so himself/herself, he/she should go for expert advice. One must have the ability to analyze what the information basically conveys.

40. 40 Step 4: Report Making: Is the last step, when it is time to summarize findings and recommendations. Market research reports with key findings from the study, a summary of what the study revealed, along with a list of recommendations for the enterprise‘s continual growth and success in the market is done. This final report serves as the basis for taking any entrepreneurial decision. i.e., For Sample Copy CLICK On the Link: Market Research Report. SURVEY SAMPLE Problem on Hand: The Mayor of your city is thinking of asking the city council to vote funds for the development of a system of bicycle paths throughout the community. Before doing so, he felt that he should determine the percentage of bicycle owners and non-owners in favor of developing a system of bicycle paths. He discussed the matter with a local marketing research firm, which was asked to submit a proposal for research.

41. 41 Some of the highlights of that proposal are described below. The purpose of the study is to determine if enough bicycle owners and non-owners are in favour of the development of bicycle paths throughout the community. (The mayor, along with the city council, will specify the percentage that constitutes "enough.") The information needed is: How many people own bicycles and are they in favour of, or opposed to, the development of a system of bicycle paths? How many people don't own bicycles, and are they in favor of or opposed to, the development of a system of bicycle paths? The data collection form the survey included two questions illustrated on the left side of table below. After a representative sample of 600 community residents were interviewed, their responses were tabulated in the manner shown on the right side of the table given below:

42. 42 It's a process of discovering and translating consumer needs and wants into products and services, creating demand for these products and services and then increasing this demand. In fact, marketing, in any economy, activates the production-consumption chain. What is Marketing? Marketing Mix: Firstly, choosing the PRODUCT that would actually meet the identified needs of the chosen consumer group. Secondly, by performing various DISTRIBUTION (PLACE) functions like transportation, ware housing, channel management etc. the consumers conveniently get the desired product. Thirdly, by carrying out a number of PROMOTIONAL measures like advertising, sales promotion etc. with a view to communicating with the consumer and promoting the product. Lastly, by using the PRICING mechanism to achieve the consummation of the marketing process, striking the balance that is acceptable to the firm as well as the consumers.

43. 43 Analyze your offerings. Ask yourself what problems your products and services solve, and, in turn, to whom they appeal. Conduct market research. Create customer profiles and market segments. Assess the competition. How to Identify the Target Market? Identify your competitors. This sounds straight forward, but in fact there are different kinds of competitors to consider. Gather information about your competitors. Analyze your competitors' strengths and weaknesses. Determine your competitive advantage. Competition Evaluation and Strategy Adoption: Market segmentation is  a marketing strategy in which select groups of consumers are identified so that certain products or product lines can be presented to them in a way that appeals to their interests . Market Segmentation:

44. 44 Digital marketing, also called online marketing, is  the promotion of brands to connect with potential customers using the internet and other forms of digital communication . This includes not only email, social media, and web-based advertising, but also text and multimedia messages as a marketing channel. What is Digital marketing? Advertising can enhance brand awareness, while branding drives the style and direction of advertising campaigns . Marketing can manage brand accountability and shore up a brand's reputation, in addition to promoting ad campaigns. Advertising and Branding: B2B is short for “ business to business .” It's a business model in which the companies involved create products and services for other businesses and organizations. B2B companies can include software as a service (SaaS), marketing firms, and businesses that create and sell various supplies. B2B The Government e Marketplace is an online platform for public procurement in India. The initiative was launched on August 9, 2016, by the Ministry of Commerce and Industry GeM:

45. 45 Emphasize on Innovation. Importance and concept of Innovation, Sources and Process Explain concept of Risk and SWOT. Risk analysis and mitigation by SWOT Analysis Learn Product related terminologies. Product Terms- PLC Mortality Curve and New product Development Steps Inventory Supply Chain Management PART-III

46. 46 SWOT Analysis Strengths are internal, positive attributes of your company. These are within your control. What assets do you have in your teams, such as knowledge, education, network, skills, and reputation? What physical assets do you have, such as customers, equipment, technology, cash, and patents? What competitive advantages do you have over your competition? Weaknesses are negative factors that detract from your strengths. These are things that you might need to improve on to be competitive. Are there things that your business needs to be competitive? What business processes need improvement? Are there tangible assets that your company needs, such as money or equipment? Are there gaps on your team? Is your location ideal for your success?

47. 47 Opportunities are external factors in your business environment that are likely to contribute to your success. Is your market growing and are there trends that will encourage people to buy more of what you are selling? Are there upcoming events that your company may be able to take advantage of to grow the business? Are there upcoming changes to regulations that might impact your company positively? If your business is up and running, do customers think highly of you? Threats are external factors that you have no control over. You may want to consider putting in place contingency plans for dealing with them if they occur. Is there a potential competitors who may enter your market? Will suppliers always be able to supply the raw you need at the prices you need? Could future developments in technology change how you do business? Is consumer behavior changing in a way that could negatively impact your business? Are there market trends that could become a threat?

48. 48 Product life cycle (PLC) is  the cycle through which every product goes through from introduction to withdrawal or eventual demise . This process is referred to as the product life cycle (PLC). PLC, as a process, traces the trajectory of a product during its lifespan in the market. There are various facets of this process that help marketers understand and evaluate their marketing strategy basis the stage a product is in. Product life cycle (PLC)

49. 49 Inventory refers to all the items, goods, merchandise, and materials held by a business for selling in the market to earn a profit. Example: If a newspaper vendor uses a vehicle to deliver newspapers to the customers, only the newspaper will be considered inventory. The vehicle will be treated as an asset. S upply C hain M anagement (SCM) is management of the flow of goods, data, and finances related to a product or service, from the procurement of raw materials to the delivery of the product at its final destination. Inventory S upply C hain M anagement (SCM)

50. 50 What is Innovation in Entrepreneurship? Innovation in entrepreneurship means the practice of creating new business ideas and plans with the intention of generating profits, helping the community, and accompanying company goals.