Establish An Enterprise

Establish an Enterprise
Business ideas are seeds of the Enterprise development and establishments. The
initial task of an entrepreneur is to scan the environment and create new business
ideas and it is from the same created ideas that births opportunities
identification.
Business idea generation technique.
The most important technique known is referred to as:
creative thinking.
This is the process which we use when we come up with new ideas. It is the ability
to apply creativity to our thoughts for problem solving or come up with new
constructive ideas and innovations. Creative thinking can be categorized into two
sides; Accidental and Deliberate.
Without using special techniques on our own, creative thinking does take place
usually in an accidental way. Like a chance happening making you think about
something in a different way then you discover another beneficial change.
Other changes happen slowly through pure use of intelligence and logical
progression and this is where Deliberate creative thinking comes in. Deliberate
creative thinking can be used to develop new ideas and improve on already
existing ideas. Brain storming is one of the techniques to spark off new thoughts
and process.
Creative thinking is characterized by two factors to be enhanced;
1. Openness of mind- an open mind will always hear and see from other
people’s perspective and allows brainstorming.
2. Focusing on one’s goal – a lot of things come to distract us and makes us to
lose focus. But being focused on our goals will keep an element of creative
thinking alive.
3. A mind to see satisfaction- this character will drive one to good and yielding
results.
There are five stages of Generating business ideas;
Idea germination: This is the seeding stage of a new idea. It is the stage where
the entrepreneur recognizes that an opportunity exists. The idea germination
takes place according to interest, curiosity of the entrepreneur according to
which opportunity is explored and exploited to its best potential. Creative idea
germinates besides the interest, the need of a specific problem or area of
study.
Preparation: On the basis of the idea, interest and curiosity the need is
adjudged by the entrepreneur and he starts looking for the answer to
implement the idea. If the idea is to launch a new product or service then
market research is conducted. That happens because the seed of curiosity has
taken form of an idea; the entrepreneurs foresee the future of the product.
Incubation: This is the subconscious assimilation of information. This is the
transition period. The entrepreneur starts thinking about the idea and
implementation in his sub-conscious mind.
Illumination: In this period of illumination the idea re-surfaces in realistic way
and entrepreneur comes out with viable plan to give practical shape by
collecting raw-material, arranging funds, policy–making for the
implementation of idea.
Verification: Also called the validation or testing stage. This is where the idea is
verified to prove that it has value. This is the most difficult phase of creativity
as obstacles begin to appear. This is the developing stage in which knowledge
is developed into application.
Innovation: It is the process of entrepreneurship which involves the translation of
a useful idea into an application which has commercial value. It takes persistent
effort to work out analytically the details of the enterprise or service, to develop
marketing strategies, to organize finances and strategize operations.
Elements in the innovation process:
 Analytical Planning
 Organizing Resources
 Implementation
 Commercial Application
Analytical planning: Carefully identifying the product or service features,
design as well as the resources that will be needed.
Resource organization: Obtaining the required resources, materials,
technology, human or capital resources.
Implementation: Applying the resources in order to accomplish the plans and
delivering res
Commercial application: The provision of value to customers, reward
employees, and satisfy the stake holders. Selecting the right opportunity, the
entrepreneur should look into various factors before deciding on the
opportunity. Even if the opportunity looks promising, an entrepreneur should
look into the environmental factors before choosing the best opportunity.
Environmental Scanning
Environmental scanning is the process of gathering

information about events and their relationships within an
organization's internal and external environments. The basic
purpose of environmental scanning is to help management
determine the future direction of the organization for
planning purposes. It helps business to understand the
current trends of the society and the environment which are
necessary for the predicting the future.
Micro environment (internal)- these are the internal factors

to the business and they affect how the operation within the
company. These are controllable factors including;
 Employees
 Competition
 customers
 Suppliers
 distribution
 Distribution
 media and marketing.
Macro environment (external)- These are external factors outside the business
and affect its performance and are beyond the company’s control. These factors
are;
 Social- economic
 Legal technological change
 Political
 Cultural
 Natural
Technique of environment scanning
PEST- It is a technique which consists of analyzing the external realities of the

business. It is dynamic in nature meaning it keeps on changing. These factors are
macro environment, the uncontrollable factors, which are
 Political
 economical
 social cultural
 technological.
The above factor forces are not under the control of the firm but have a powerful
impact on the firm’s functions.
PORTER’S FIVE FORCE MODEL
Porter's Five Forces is a model that identifies and analyzes five competitive forces
that shape every industry and helps determine an industry's weaknesses and
strengths. Five Forces analysis is frequently used to identify an industry's
structure to determine corporate strategy.
Porter's model can be applied to any segment of the economy to understand the
level of competition within the industry and enhance a company's long-term
profitability.
 Potential of new entrants into the industry-A company's power is

also affected by the force of new entrants into its market. The less
time and money it cost for a competitor to enter a company's
market and be an effective competitor, the more an established
company's position could be significantly weakened.
 Power of suppliers-The next factor in the Porter model addresses
how easily suppliers can drive up the cost of inputs. It is affected by
the number of suppliers of key inputs of a good or service, how
unique these inputs are, and how much it would cost a company to
switch to another supplier. The fewer suppliers to an industry, the
more a company would depend on a supplier.
 Power of customers- The ability that customers have to drive prices
lower or their level of power is one of the Five Forces. It is affected
by how many buyers or customers a company has, how significant
each customer is, and how much it would cost a company to find
new customers or markets for its output.
 Threat of substitute products- Substitute goods or services that can
be used in place of a company's products or services pose a threat.
 Competition in the industry- refers to the number of competitors
and their ability to undercut a company. The larger the number of
competitors, along with the number of equivalent products and
services they offer, the lesser the power of a company.
SWOT ANALYSIS
A SWOT analysis is a compilation of your company’s strengths, weaknesses,

opportunities and threats.
SWOT (strengths, weaknesses, opportunities and threats) analysis is a planning
process that helps your company overcome challenges and determine what new
leads to pursue.
The primary goal of SWOT analysis is to increase awareness of the factors that go
into making a business decision or establishing a business strategy. To do this,
SWOT analyzes the internal and external environment and the factors that can
impact the viability of a decision.
Feasibility study
A feasibility study refers to an analysis that takes every relevant factor of a

business into account (legal, economic, technical, and scheduling
considerations) to determine the possibility of completing the project
successfully. The process of analyzing of the viability of an idea in order to
identify the potential problems or opportunities.
Entrepreneurs utilize feasibility studies to determine whether a business's

return is worth the time and effort.
Process of Feasibility study
The process of Feasibility study looks at the same important aspect of the
business.
 The market viability
 The technical viability
 Organizational viability
 Financial viability
How to carry out the feasibility study.
The information you gather and present in your feasibility study will help:
 List in detail all the things you need to make the business work.
 Identify logistical and other business-related problems and solutions.
 Develop marketing strategies to convince a bank or investor that your
business is worth considering as an investment.
 Serve as a solid foundation for developing your business plan.
1. Brainstorming
2. Visiting your local business area
3. Investigate your environment
4. Using experience- your own and other people’s experience
5. Other sources of business ideas

Establish An Enterprise

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Establish an Enterprise

Environmental scanning is the process of gathering

Micro environment (internal)- these are the internal factors

 media and marketing.

 Legal technological change

Technique of environment scanning

PEST- It is a technique which consists of analyzing the external realities of the

 Potential of new entrants into the industry-A company's power is

A SWOT analysis is a compilation of your company’s strengths, weaknesses,

A feasibility study refers to an analysis that takes every relevant factor of a

Entrepreneurs utilize feasibility studies to determine whether a business's

Process of Feasibility study

How to carry out the feasibility study.

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