B

International
Labour
Office

KNOWABOUTBUSINESS
Entrepreneurship Education
in Schools, Technical Vocational Training Institutions and Higher Education

MODULE

4 2018

How do I find a business idea?

 MODULE 4

How do I find
a business idea?

International Labour Office, Geneva

International Training Centre of the ILO, Turin
Copyright © International Training Centre of the ILO 2018

This publication enjoys copyright under Protocol 2 of the Universal Copyright Convention. Applications for
authorization to reproduce, translate or adapt part or all of its contents should be addressed to the International
Training Centre of the ILO. The Centre welcomes such applications. Nevertheless, short excerpts may be
reproduced without authorization, on condition that the source is indicated.

Know About Business

ISBN 92-9049-396-8

First published 1996

Second edition 2000
Third edition 2002
Fourth edition 2004
Revised edition 2005
Revised edition 2007
Revised edition 2008
Revised edition 2011
Revised edition 2018

The designations employed in the publications of the International Training Centre of the ILO, which are in
conformity with United Nations practice, and the presentation of material therein do not imply the expression of
any opinion whatsoever on the part of the Centre concerning i.a. the legal status of any country, area or territory
or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in
signed articles, studies and other contributions rests solely with their authors, and publication does not constitute
an endorsement by the Centre of the opinions expressed in them.

Publications of the Centre, as well as a catalogue or list of new publications, can be obtained from the following
address:

Publications
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E-mail: publications@itcilo.org
http://www.itcilo.org
 INTRODUCTION

What is Know About Business?

Know About Business (KAB) is an entrepreneurship education programme developed

by the International Labour Organization (ILO) to teach entrepreneurship in technical
and vocational education and training institutions as well as in secondary and higher
education institutions.
The programme seeks to prepare in-school youth – young men and women - for the
transition from school to the world of work by letting them discover and develop
entrepreneurial competencies and basic business management skills through a range
of games and exercises. The ultimate goal is to equip young people with skills and
competencies to start their own venture at some point in their life as well as to work
productively as employees in enterprises as intrapreneurs. KAB helps young people
to explore and develop an entrepreneurial mind-set and attitude that can be applied
in all aspects of life whether a young person choses to become an entrepreneur or an
intrapreneur.
KAB is directed to teachers and educators in technical and vocational education and
training institutions, general secondary education and teachers and lecturers in higher
education such as universities and polytechnics. KAB can be used in any educational
setting and can be adapted for specific technical and general courses where an
educational institution or a teacher wishes to reinforce entrepreneurship learning
outcomes. The typical age group is youth from 15-24 years, but the games and
exercises can be used to teach entrepreneurship to any age or target group.
The complete KAB package consists of a total of 80 hours of games and exercises
and is made up of seven modules, each representing a key area of entrepreneurship.
Each module consists of a Teacher’s Guide with detailed sessions plans and
exercises and a Learner’s Workbook. An Implementation Manual guides educational
institutions through the integration of KAB into existing systems and curricula.
Whereas some countries have adopted the full package in their national curricula,
other countries have adopted part of the KAB package to complement existing
curricula at different institutional levels. The ITC-ILO is available to provide advice and
guidance to any institution that considers implementing the full KAB package or part
of it.
For more information write to the Enterprise, Microfinance and Local Development
Programme (EMLD) of the International Training Centre of the ILO at emld@itcilo.org.

Know About Business 3

 INTRODUCTION

Authors and acknowledgements

The Know About Business programme was initially developed by the International
Labour Organization in Kenya in 1996 as part of an entrepreneurship education
programme in vocational education and training. The team was led by Professor
Robert Nelson of the University of Illinois. Since then a number of revisions were
carried out in 2000, 2002, 2004, 2005, 2007 2008 and 2011.
Over the years many former and current ILO officials have contributed to the
continuous development of the KAB programme including Gulmira Asanbaeva, Rania
Bikhazi, Charles Bodwell, Linda Deelen, Jens Dyring Christensen, Klaus Haftendorn,
Marek Harsdorff, Nelien Haspels, Samih Jaba, George Manu, Barbara Murray, Debra
Perry, Annemarie Reerink, Virginia Rose Losada, Joni Simpson, John Thiongo and
Peter Tomlinson.
The current 2018 version was developed with contributions by Rania Bikhazi, Tong
Cai, Nuno Castro, Linda Deelen, Jens Dyring Christensen, Samih Jaba, Maria José
Mallo and Virginia Rose Losada. The layout and graphics was done by Enzo
Fortarezza. The team wishes to thank the authors of the ILO GET Ahead and Start
Up and Go training materials, that served as inspiration for some of the exercises in
this new KAB package. Very special thanks go out to all those involved in the national
translations and adaptations of Know About Business, whose work was extremely
helpful for the preparation of the present package.

4 Know About Business

 MODULE 4: How do I find a business idea?

MODULE 4
How Do I Find a Business Idea?

Module objectives:
 Learners develop their innovative skills and creativity.
 Learners identify feasible business ideas and business
opportunities.
 Learners understand the process of choosing a suitable market.

Module coverage:

1. Creativity and innovation

2. Generating business ideas
3. Assessing business opportunities
4. Ways of getting into business
5. Selecting a suitable market

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 MODULE 4: How do I find a business idea?

Topic 1: Creativity and Innovation

SUGGESTED TIME 1.5 hours

LEARNING OUTCOMES

 Learners understand the importance of creative thinking.

 Learners acquire ideas how they can further develop their creative potential.
 Learners practice to develop new ideas, using existing ideas as a starting
point.

ACTIVITIES

1. Invite learners to complete WORKSHEET 1, and explain that the worksheet

will help them assess their creative potential. Have them add up the points
according to the Scoring Key and then interpret their scores based on the
descriptions in the worksheet.
2. Discuss with learners the results of the scoring:
 Do you think the result describes you well? Why or why not?
 What advantages would a person of each description have as an
entrepreneur? Are there any disadvantages?
 Are there any differences between young women and men when it
comes to their creative potential?
Explain that while certain people may have had more incentives or
opportunities to develop their creative potential, this does not depend on being
a man or a woman. We can all further develop our creative potential!
3. Ask learners to read and then discuss HANDOUT 1 on “Creativity”. Then invite
learners to share their ideas on how they can further develop their creativity,
using the ideas listed in the handout as a starting point. What other ideas do
they have?
4. Explain that entrepreneurs who want to develop new and original ideas, often
use existing ideas as a starting point. By changing one or more elements of
an idea, we can develop useful new ideas. Then invite learners to read
WORKSHEET 2 and work in small groups to fill in the questions. Remind them
that for this exercise, they can use any product that they use at home or at
school.
5. Discuss the results of the exercise in plenary.
 Ask all learners to share their ideas. Have them explain how their ideas
can be useful for business and for society.

6 Know About Business

 TOPIC 1: Creativity and innovation

 Emphasize that the technique used in this activity can be used not only
to develop new types of products, but also to develop new or improved
types of services.
 Invite the learners apply the same technique to a service instead of a
product.
6. Show SLIDE 1 and have the class discuss how they can become more
creative.
7. Ask learners to do the exercises on WORKSHEET 3. Invite them to resolve
the first exercise individually and the second and the third exercise in pairs.
8. Ask those who managed to resolve the problems to explain their solutions to
the rest of the class. Invite learners to share their answers to the three
questions on WORKSHEET 3. Was it useful for them to work in pairs? Why or
why not? If necessary, reveal the answers on SLIDE 2. Conclude by saying
that creativity helps you to find solutions to problems that other people may
not see.

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 MODULE 4: How do I find a business idea?

WORKSHEET 1

My creative potential
Respond to each of following statements according to your situation. This is not a
test. Just think carefully about before responding.
NOT
YES NO STATEMENT
SURE
A My ideas are not always easy to explain to others

I would rather work to discover new facts than

B
teach others
I don’t like to waste time and energy on ideas that
C
may not work out
I find it easier to express ideas than to think of
D
new ideas
I prefer quick solutions to problems rather than
E
dealing with uncertainty
My way of thinking is often considered different or
F
unusual
I find it easy to stop a project I am working on
G
when friends call or visit
I feel more comfortable with facts than with
H
theories
I am better at making up stories than at telling
I
them
I have difficulty giving up my ideas just to please
J
others

K I would rather design clothes than model clothes

I prefer to work on ideas by myself rather than

L
with others
Unusual things appeal to me more than ordinary
M
things
When I get an idea, I work on it, even when
N
others think it is “far out” and impractical
I would follow up on my ideas even if it means
O
being alone a lot

Total Score ___________

8 Know About Business

 TOPIC 1: Creativity and innovation

WORKSHEET 1 (CONT.)

My creative potential - Scoring key

YES NO NOT SURE

A 2 0 1

B 2 0 1

C 0 3 1

D 0 2 1

E 0 3 1

F 3 0 1

G 0 3 1

H 0 3 1

I 2 0 1

J 3 0 1

K 2 0 1

L 3 0 1

M 2 0 1

N 3 2 1

O 2 0 1

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 MODULE 4: How do I find a business idea?

WORKSHEET 1 (CONT.)

My creative potential - Descriptions

23 points or more – Description I:

You are not limited by ordinary ways of thinking. You have the potential to develop
new ideas. You are willing to experiment even when you are not sure your work will
be rewarded. Because you seldom depend on others, you can find the time and
energy that are necessary for creative activities. You are not likely to be distracted or
discouraged by others once you become interested in a challenging task.

11 to 22 points – Description II:

You can recognize and appreciate a creative idea, although you usually do not
produce these ideas by yourself. You probably engage in creative activities which
involve using your hands or which involve objects you can see and touch. You start
creative projects sometimes, but you may lose patience and interest when a project
requires you to work for a long time by yourself.

10 points or less – Description III:

You are usually more interested in practical down-to-earth matters than in chasing
dreams. Since you tend to be very realistic in your thinking, you may not develop so
many new ideas and you may not solve problems in a creative way. Because you
prefer to work with other people, you rarely set aside time to work by yourself on your
ideas. You are more likely to engage in activities which give you immediate results
and which may be shared with others.

10 Know About Business

 TOPIC 1: Creativity and innovation

HANDOUT 1

Creativity
When talking about occupations that require creativity, you may in first instance think
of designers, artists, etc. However in all occupations creative ideas are needed.
Entrepreneurs use creativity to solve everyday problems, invent new products and
services, find better ways to market products and services, and make use of limited
resources.
Some people feel they themselves are not creative. They may overlook situations in
which they have good ideas, or they may be shy in sharing their ideas with others. By
recognizing and sharing their ideas, you can develop your creativity.
Because people become accustomed to thinking in certain ways, they may have
difficulty thinking of original ideas. People can develop their creative potential through
learning and practice. Here are some ideas:
Identify creative people in your environment. Do not just think of artist and designers,
but also of people who think and behave creatively and who develop new ideas.
Spend time with creative people. Observe how they act, think, relax and respond. Ask
them what events in their lives influenced their creativity.
Think for yourself what types of settings seem to encourage your creativity. Are you
more creative in the morning or in the evening? Do you develop good ideas when
going for a walk, or when talking to other people?
Move, dance, exercise, cycle, walk and stretch. These activities get us out of our
normal thinking habits and allow us to develop new ideas. They bring fresh blood to
the brain!
Listen to music and engage in theater and drama exercises if you enjoy them. These
activities will help you looking at certain topics or situations from a different
perspective and practice different ways of responding.
Keep a notebook of interesting or creative ideas and observations. Paste a few
pictures from magazines that interest or intrigue you, even if you don’t know why.
Scribble and doodle. Whatever you do, don’t censor yourself. See what happens.
Look at problems as solutions. For each problem there is a business solution. When
we are hungry in the morning we have a problem, which the restaurant that opens
early solves in return for money. The same is true for problems caused by pollution
or depletion of natural resources. Lack of fuel wood is a problem created by
deforestation. But even though it is a problem, it is also a business opportunity for
builders of fuel efficient stoves, for makers of briquettes from organic waste (an
alternative to wood), or for manufacturers of alternative cooking solutions such as
solar cookers.
Find a mentor or coach who can help you develop your creativity to a higher level.

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 MODULE 4: How do I find a business idea?

WORKSHEET 2

Turning old ideas into new ideas

Make it bigger. Add new parts. Examples are the extra large coffee and tea servings
that you can get in certain coffee shops, and costumes specially made for tall people.
Make it smaller or eliminate parts. Examples are wireless headphones, and
eliminating unnecessary wrappings from certain food products.
Make it more efficient. Examples are improved cooking stoves and less energy
consuming light bulbs.
Modify certain parts. Examples are changing colors, tastes, odors and styles. Soaps
are often changed in their color and odor.
Rearrange parts. Examples: rearranging the chapters in schoolbooks, so that they
become more user-friendly.
Reverse parts. One example of reversing parts is in cars in which the trunk and the
engine are reversed in location.
Substitute certain materials, parts or methods with others. A common example is the
substitution of plastic for wood and metal. Innovative examples are substituting
kerosene lanterns for solar lanterns, and installing an electric motor in a car.
Combine parts or ideas. One example is the smart phone that also serves as a
camera. Another example is a city map that also serves as a restaurant guide.
Reuse and recycle waste and materials. An example is the fabrication of eco
briquettes from organic waste to be sold as cooking fuel. Another example is the
filtration of used oil form engines that can be sold as second-hand oil.

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 TOPIC 1: Creativity and innovation

Practical Application
1. Select a product that is familiar to you because you use it at home or at school.
Write the object’s name (for instance, a pencil).

_________________________________________________________________

_________________________________________________________________

2. Write down the basic characteristics of the product (for instance, it is made of
wood and it is used for writing).

_________________________________________________________________

_________________________________________________________________

3. Can you think of a new product by making the product or parts of the product
either bigger or smaller? (for instance, a short pencil that can fit in any pocket)

_________________________________________________________________

_________________________________________________________________

4. Can you think of a new product by modifying certain parts or by making the product
more efficient? (for instance, a pencil with a better quality graphite)

_________________________________________________________________

_________________________________________________________________

5. Can you think of a new product by rearranging or reversing some parts or

elements? (for instance, a pencil with a cap)

_________________________________________________________________

_________________________________________________________________

6. Can you think of a new product by substituting or combining certain elements or

materials? (for instance, a pencil with a cap that is at the same time a pencil
sharpener)

_________________________________________________________________

_________________________________________________________________

7. Can you think of a new product by either reusing or recycling waste? (for instance,
a pencil made from recycled newspapers)

_________________________________________________________________

_________________________________________________________________

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 MODULE 4: How do I find a business idea?

SLIDE 1

The meaning of creativity

 Creativity is to think, make or solve something in a new or

different way.
 Creativity often distinguishes high-growth and dynamic
businesses from ordinary, average firms.
 Creativity often marks the difference between success and
failure in business.
 Successful entrepreneurs are creative in identifying new
products, services or business ideas and turning them into
business opportunity.
 To be creative, keep your mind and eyes open to your social
(people), natural (nature) and economic (enterprises)
environment.

14 Know About Business

 TOPIC 1: Creativity and innovation

WORKSHEET 3

Thinking in a non-conventional way

Try solving following puzzles:

a. The nine-dot exercise

On your own, try to connect the 9 dots in the diagram below by means of 4 straight,
continuous lines. Your pencil should NOT be lifted off the paper. Stretch your
imagination beyond the problem in front of you to solve the problem (for example, the
lines are not limited within the square of dots).

  

  

  

b. The sixteen-dot exercise

In pairs, connect the 16 dots in the diagram below by means of 6 straight,
continuous lines. The pencil should not be lifted off the paper.

   

   

   

   

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 MODULE 4: How do I find a business idea?

c. The creative square exercise

Individually, count the total number of squares (a rectangle with sides of equal length)
in the figure. Think outside the box!

d. Debriefing
Think about following questions:

1. What creative strategies did you use to solve the problems?

_________________________________________________________________

_________________________________________________________________

2. Did working in pairs help you to ‘see’ things from different angles?

_________________________________________________________________

_________________________________________________________________

3. What did you learn about creative problem solving in these exercises?

_________________________________________________________________

_________________________________________________________________

16 Know About Business

 TOPIC 1: Creativity and innovation

SLIDE 2

Thinking in a non-conventional way

Going outside the square stretching your imagination and mind!

a. The nine-dot exercise

b. The sixteen-dot exercise

c. The creative square exercise

30 (Tips: combine various boxes to form squares, i.e. four equal-sided boxes
and add up the possible combinations, then you will arrive at the total of 30.)

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 MODULE 4: How do I find a business idea?

EXPLANATION OF WORKSHEET 3

1. What creative strategies did you use to solve the problems?

Answer: Stretching the line outside the square of dots; combine various boxes to
form squares, etc.
2. Did working in pairs help you to ‘see’ things from different angles?
Answer: Each individual views any situation differently. Some are more creative than
others. Working in pairs/groups can help to combine ideas and find solutions.
3. What did you learn about creative problem solving in these exercises?
Answer: Creativity is something that we can all learn. It is like a muscle that we can
train and strengthen. Sometimes solving problems as a group gives new and better
solutions than acting individually.

18 Know About Business

 TOPIC 2: Generating business ideas

Topic 2: Generating Business Ideas

SUGGESTED TIME 2 hours

LEARNING OUTCOMES

 Leaners appreciate that a good business idea is the first step for starting a
successful businesses.
 Learners acquire practice in generating business ideas and assessing
business opportunities.

ACTIVITIES

1. Ask learners to define the term “business idea”. Jot down their answers on the
board. Arrive at a common understanding of the term using SLIDE 1 (and the
aspects proposed by the learners).
Have learners give examples of businesses that they think have developed
good business ideas. They may either think of businesses in the local
community, in the country or internationally, that have developed good
business ideas. Have them explain why they consider them as good ideas.
Tell learners that people select business ideas on the basis of their skills and
interests, irrespective of the stereotypes about certain business sectors being
more suitable for men or women.
2. Let learners indicate why it is important to generate new ideas, and list their
answers on the board. Show SLIDE 2 and explain the different points to the
learners.
Mention that the development of business ideas is necessary both before the
creation of the business and once a business has been set up.
Emphasize that new business ideas are necessary to protect our natural
environment. Ask the learners for some examples (electrical cars, biological
agriculture and products made from recycled materials).
3. Invite learners to read HANDOUT 1.
4. Ask learners to suggest ways in which they could generate business ideas.
List these on the board. Show SLIDE 3 and facilitate a discussion on the main
points, giving examples and illustrations. Then invite learners to read
HANDOUT 2 for more information.
5. Give learners 20 minutes to complete WORKSHEET 1. Then invite volunteers
to present their ideas with the group. Congratulate the learners with their
innovative ideas. Mention that all business ideas need to be screened for their
feasibility, before they can be turned into a business.
6. (OPTIONAL) Give learners 30 minutes to generate business ideas using
social media and invite them to complete WORKSHEET 2. Then invite
volunteers to present their ideas with the group. Compare the types of
business ideas that were generated through the use of social media, with the

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 MODULE 4: How do I find a business idea?

types of business ideas that were generated during the previous activity.
Mention that both ways of generating business ideas are valid, and can often
be combined.

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 TOPIC 2: Generating business ideas

SLIDE 1

What is a business idea?

A business idea is the response to an identified

problem or to a perceived need.

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 MODULE 4: How do I find a business idea?

SLIDE 2

Why business ideas?

 Creativity is to think, make or solve something in a new or

different way.
 You need a great idea to start a new business. Finding a good
idea is the first step in creating a business.
 Business ideas are needed because the life cycles of products
and services are limited. Business ideas are needed to
improve existing products and services.
 Good business ideas help entrepreneurs to stay ahead of the
competition.
 Good business ideas help to ensure that businesses operate
effectively and efficiently.
 Good business ideas can help to improve the natural
environment, by reducing waste, reusing or recycling certain
materials and using resources more efficiently.

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 TOPIC 2: Generating business ideas

HANDOUT 1

Why business ideas are needed

A good business idea is necessary for a successful business start-up. Existing
business also need to develop new business ideas. A business idea is a response to
an identified problem or to a perceived need.
Here are some recommendations when you are looking for a good business idea:
Respond to market needs. Markets are made up of customers who have needs and
wants waiting to be satisfied. A business can become successful if it provides
products or services that respond to the needs of these customers. New businesses
that copy ideas from others are not successful because they do not respond to a
market need.
Respond to the needs of specific groups of people. Business ideas can serve
specific groups of people (young people, elderly people, rural populations, urban
populations, children, students, migrants, people with disabilities). In the tourism
sector, for example, specific services may be needed by elderly travelers, families
with children or eco-tourists.
Respond to the need to protect our environment. Business ideas can help people
protect the environment, for instance re-usable shopping bags, natural fertilizers,
organic food products and solar panel repair services. The market for environmentally
sustainable products is growing very fast.
Respond to changing fashions and requirements. Changes in customers’
preferences provide opportunities for entrepreneurs to respond to these changes with
new ideas, products and services. In some countries, a renewed interest in traditional
clothes provides opportunities for local tailors.
Exploit the opportunities that new technology brings. New technology may help
you to bring new products to the market, or to serve different markets. E-commerce,
for instance, enables you to sell your products or services to people in a different part
of the country or the world.
Manage risk and allow for failure. Many new products fail. It is therefore necessary
for entrepreneurs to manage the risks, study the market thoroughly and allow for
failures that may occur in the development or new products or services.

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 MODULE 4: How do I find a business idea?

SLIDE 3

Sources of business ideas

 Hobbies/personal interests
 Personal skills and experience
 Mass media (newspapers, magazines, TV, Internet, social
media)
 Business exhibitions
 Customer complaints
 Brainstorming
 Commitment to protect the environment
 Commitment to solve a social problem or issue

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 TOPIC 2: Generating business ideas

HANDOUT 2

Sources of business ideas

There are millions of entrepreneurs throughout the world and their stories suggest
that there are many potential sources of business ideas. Some of the more useful
ones are outlined below.

Hobbies/interests
Many people have founded businesses based on their hobbies or interests. If, for
example, you enjoy playing with computers, cooking, music, traveling, sport or design,
you may be able to develop this hobby/interest into a business. If, for example, you
enjoy traveling and you care about the environment, you may consider opening an
eco-tourism travel agency.

Personal skills and experience

Over half of the ideas for successful businesses come from experiences in the work
place. For example, a mechanic with experience in working for a large garage who
eventually sets up his/her own car repair or used car business.

Mass Media
The mass media is a great source of information, ideas and opportunities.
Newspapers, magazines, television, the Internet and social media can all be sources
of good business ideas. Take a careful look, for example, at the commercial
advertisements in a newspaper or magazine and you may well find interesting
businesses ideas. The mass media may report on changes or trends in specific
consumer needs. For example, you may read or hear that people are now increasingly
interested in healthy eating or maintaining their physical fitness.

Exhibitions
Another way to find business ideas is to attend exhibitions and trade fairs. Attending
these events gives you exposure to new products and services, sales representatives,
manufacturers and distributors. These are often excellent sources of information, that
can help you in getting your business started. Some of them may also be looking for
someone just like you to be a business partner.

Complaints
Complaints and frustrations on the part of customers have led to many new products
and service. Whenever consumers or customers complain bitterly about a product or
service, or when you hear someone say “I wish there was .....” or “If only there were
a product/service that could ....”, you have the potential for a business idea. The idea
could be to set up a rival firm offering a better product or service, or it might be a new
product or service, which could be sold to the firm in question and/or to others.

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 MODULE 4: How do I find a business idea?

Brainstorming
Brainstorming is a technique for generating ideas. Brainstorming means generating
many different ideas with a group of people. With your friends, for instance, you may
come up with as many new business ideas as possible and write down all ideas, even
if they seem irrelevant or odd. The objective is to come up with as many ideas as
possible, and screen the ideas for their usefulness at a later stage.

Protecting the environment

More and more people are becoming aware of how the environment is important to
maintaining their way of life. You may find ideas that help these people or companies
to protect or save their environment. Many young people around the world have
established businesses related to resource saving, clean energy, waste recycling
biological agriculture, for instance. Reading on the Internet what young people in other
parts of the world are doing, can be a great way to start.

Solving social problems

If you are personally interested to solve certain social problems in society, you may
come up with a business idea that helps you to make a difference. You may for
instance start a restaurant in which you employ street children, or start a waste
recycling business that also generates income for waste pickers. Remember that not
for every business profit-making is the main objective! Social businesses combine
social objectives with income generation.

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 TOPIC 2: Generating business ideas

WORKSHEET 1

Generate your own ideas

Generate your own business idea, using the starting points in the left column.
Complete the table. Keep thinking about ideas that can be turned into opportunities!

Sources of business ideas Ideas

a. Hobbies and personal

interests

b. Personal skills and

experience

c. Mass media

d. Business exhibitions

e. Customer complaints

f. Brainstorming

g. Protecting the environment

h. Solving social problems

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 MODULE 4: How do I find a business idea?

AN EXAMPLE OF THE “GENERATE YOUR OWN IDEAS” TABLE

Sources of business ideas Ideas

a. Hobbies and personal Bakery

interests

b. Personal skills and Babysitting service / child care service

experience

c. Mass media Agricultural inputs supplier

d. Business exhibitions Agricultural machinery repairs service

e. Customer complaints Restaurant with fresh local food

f. Brainstorming Any idea….

g. Protecting the Solar lanterns and systems supply shop

environment

h. Solving social problems A school for children with special needs

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 TOPIC 2: Generating business ideas

WORKSHEET 2

Use social media for business ideas

As a group, use social media to identify interesting business ideas and share them
with each other. Select the 5 business ideas that you, as an individual, are most
interested in. In the table below, write down why you are interested in the five business
ideas that you selected. You have 30 minutes for this task.

Business idea Reason(s) for interest

1.

2.

3.

4.

5.

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 MODULE 4: How do I find a business idea?

Topic 3: Assessing Business

Opportunities

SUGGESTED TIME 2.5 hours (depending on the availability of guest

speakers)

LEARNING OUTCOMES

 Learners are aware of the difference between a business idea and a

business opportunity.
 Learners can explain how to evaluate business opportunities.
 Learners are aware of the need for environmentally safe business ideas.

ACTIVITIES

1. Have the learners define the term “business opportunity”, and then show
SLIDE 1 to clarify the term.
2. Let learners share their ideas of whether business ideas necessarily mean
business opportunities, and give their reasons. Show SLIDE 2 to draw a
distinction between a business idea and a business opportunity.
3. Let learners think about the factors they should consider when assessing a
business opportunity. List their answers on the board. Show SLIDE 3. Then
have learners read HANDOUT 1. Ask learners if they have any comments or
questions on HANDOUT 1 and deal with any questions in plenary.
4. (OPTIONAL ACTIVITY 1) Invite a local entrepreneur to talk with learners about
how he or she found a business idea and transformed it into a successful
business (why the entrepreneur generated the business idea, how he/she
assessed the opportunity and how the idea was transformed into a successful
business). For this activity, select a local entrepreneur who can serve as an
inspiration and role model for the entire class. Consider inviting a woman
entrepreneur.
Before the session, ask learners to think of the questions they want to ask.
After the interview, ask groups of learners to prepare a short report and
present it to the entire class.
5. (OPTIONAL ACTIVITY 2) Ask someone from the local ministry of industry,
investment promotion centre, employers’ organization, local economic
development board, chamber of commerce or business promotion agency, to
come and talk about business opportunities in the area. For this activity, select
a person directly involved in supporting local entrepreneurs. Consider inviting
a woman.
Before the session, ask learners to think of the questions they want to ask.
Propose to the learners that they include questions on green businesses. Are
there opportunities for businesses to offer environmentally safe products and
services in the area? Which ones? After the interview, ask groups of learners

30 Know About Business

 TOPIC 3: Assessing business opportunities

to prepare a short report and present it to the entire class.

6. Have learners read ‘Leila’s story’ in HANDOUT 2. Select 5 volunteers and
invite these volunteers to a role play in which the 5 learners play Leila, her 3
friends and Mr. Hu.
7. Ask learners to write their answers to the questions on HANDOUT 2. Invite
learners to share their results with the rest of the group. Conclude by saying
that many business activities create environmental damage and that action
needs to be taken to ensure that these businesses operate in a more
environmentally sustainable way.

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 MODULE 4: How do I find a business idea?

SLIDE 1

What is a business opportunity?

A business opportunity is an attractive investment idea

or proposition that provides the possibility for the
entrepreneur to make profit.

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 TOPIC 3: Assessing business opportunities

SLIDE 2

Business idea = business opportunity?

 Although a business idea is necessary, it is not sufficient for

success, but needs to be transformed into a viable business
opportunity.
 Good ideas do not necessarily mean good business
opportunities. The idea might be hard to be transformed into
reality, it may not be profitable or it may harm the environment.
 Business opportunities need to be carefully examined.

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 MODULE 4: How do I find a business idea?

SLIDE 3

Assessing Business Opportunities

 Not an easy task. Out of approximately 30 business ideas,

there may only be one good business opportunity.
 A good business opportunity should take into account:
- The market: real demand for the product or service
- Competition
- Length of the ‘window of opportunity’
- Entrepreneurial competencies
- Human resources
- Capital, technology and other resource requirements
- Business environment (political, economic, legal, natural,
government regulations, etc.)
- ......

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 TOPIC 3: Assessing business opportunities

HANDOUT 1

Identifying business opportunities

A good business idea is not necessarily a good business opportunity. For example,
you may have invented a brilliant product and yet the market may not be ready for it.
Or the idea may be sound, but the level of competition, and the resources required
may be such that it is not worth pursuing. Sometimes there may even be a market for
the idea, but the return on investment may not be acceptable. Over 80% of new
products fail.
What turns a good business idea into a good business opportunity?
Ideas and opportunities need to be screened and assessed for viability. This is not an
easy task but an extremely important task. This assessment can make the difference
between success and failure, between making a fortune and losing everything.
While the assessment exercise does not guarantee success, it certainly helps in
minimizing the risks and reducing the odds for failure. Assessing business
opportunities involves studying the points below:

 The market: real demand for the product or service

The first key question to be answered is whether there is a market for the idea. A
market consists of customers – potential or actual – who have certain needs, and who
have the ability to purchase your new product or service. In order to screen the
business opportunity, you need to do market research. You may use existing sources
of information (chambers of commerce, investment promotion centers, government
ministries, universities, the Internet, newspapers), but there is also the need to collect
information by interviewing key people, such as customers and suppliers. This is
called doing a market survey.
 Competition
To be attractive, an opportunity must have a unique competitive advantage as
compared to other competitors. For example, a business may have a competitive
advantage by lowering production costs, by offering better quality or by being able to
deliver the product or service closer to the client. If a business has no competitive
advantage over competitors, then the opportunity may not be very attractive.
 Length of the ‘window of opportunity'
Opportunities have a ‘window of opportunity.’ That is, they do exist, but they do not
remain open forever. Markets grow at different rates over time, and as a market gets
bigger and more well-established, conditions for success are not as favorable. Timing
is therefore important. The issue then is to determine the length of time the window
will be open, and whether the opportunity can be created or seized before the window
closes.

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 MODULE 4: How do I find a business idea?

 Entrepreneurial competencies
An important question is whether the entrepreneur has the necessary knowledge,
skills and abilities for the requirements of the business and, if not, whether other
people could be brought in. Many small business owners/managers have entered
into business based on the strengths of their own skills and ability.
 Human resources
A related question is whether the entrepreneur will be able to hire staff with the
necessary skills and experiences to make the business successful. Even in countries
with high unemployment rates, entrepreneurs often find it difficult to find workers with
the right skills.
 Capital, technology and other inputs
The availability and access to capital, technology and other resources, determine the
extent to which certain business opportunities can be pursued. When evaluating the
business opportunity, the entrepreneur needs to assess whether he or she will be
able to access loans, and whether the necessary technology and materials can be
bought locally or need to be imported. He or she needs to get a good indication of the
costs of capital, technology and other inputs.
 Business environment
The business environment, within which the businesses will operate, has a great
influence on the attractiveness of any opportunity. Are the necessary infrastructure
and basic services (water, electricity, wifi) available? What business regulations will
apply? Will the entrepreneur be able to get a business license? Are there any health
and environmental permits that the entrepreneurs will need to obtain? Which
institutions can provide support to the entrepreneur?

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 TOPIC 3: Assessing business opportunities

HANDOUT 2

Identifying business opportunities for a

sustainable environment (Leila’s story)

Today is Leila’s 16th birthday. Leila is living in a poor rural community with no
electricity and with not much to do. Nevertheless, she invited all her friends. As they
are all from the same class they discuss what to do after leaving school this year.
Joe says he wants to become a businessman like Mr. Hu. Mr. Hu has a logging
business. Since long ago, he cuts the forest around their community. He sells timber
to other countries, burns the remaining forest and converts the land to grassland for

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 MODULE 4: How do I find a business idea?

his cows. He makes good money and has invested in some sewing machines for a
garment factory.
But Leila says that this logging operation is bad for the environment. Storms and
floods wash away the fertile soil, once the trees are gone. As a result, the slashed
forest land can only be used for pasture for a very short time. Most of the land soon
becomes wasteland that nobody is able to use.
Maria comments that, in addition to the changed landscape, Mr. Hu’s business has
other effects on the community. Women now need to walk up to 5 hours a day to
collect fuel wood to meet their families’ cooking needs. The community well dried up
because the forest that stored water in the soil is lost. During the rainy season, the
water runs off and farmers complain about water scarcity. The water from the river
has become unusable as Mr. Hu dumps old oil from his sewing machines into the
river.
Peter agrees with Maria and Leila and adds that because of Mr. Hu’s business, many
families, who formerly lived from non-timber forest products such as honey, bush meat,
medicinal plants, building material, fruits and fuel wood, have lost their livelihoods.
Leila asks her friends how they might turn these environmental and social problems
created by Mr. Hu’s company, into new business opportunities.

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 TOPIC 3: Assessing business opportunities

Questions about Leila’s story

a) What are the environmental problems caused by Mr. Hu’s business?

_________________________________________________________________

_________________________________________________________________

b) What are social problems caused by the environmental damages?

_________________________________________________________________

_________________________________________________________________

c) What problems does the community face due to environmental challenge?

_________________________________________________________________

_________________________________________________________________

d) What needs to be done to make Mr. Hu’s company more environmentally

sustainable?

_________________________________________________________________

_________________________________________________________________

e) What potential business opportunities could arise from the environmental

problems?

_________________________________________________________________

_________________________________________________________________

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 MODULE 4: How do I find a business idea?

ANSWER KEY TO “LEILA’S STORY”

a) What are the environmental problems caused by Mr. Hu’s business?

Answer: Deforestation, biodiversity loss, erosion, loss of water storage function
of soil, increased run-off water, water pollution.

b) What are the social problems caused by the environmental damages?

Answer: Wood scarcity, loss of livelihood for forest depending families, loss of
farmland, water scarcity, lack of clean drinking water.

c) What problems does the community face due to climate change and other
environmental challenges?

Answer: Increase of droughts, floods, storms, water scarcity, erosion, loss of

farmland.

d) What needs to be done to make Mr. Hu’s company more environmentally

sustainable?

Answer:
- Sustainable forest management,
- Recycling of waste oil,
- Clean sewing machines,
- Purification of wastewater, etc.

e) What potential business opportunities arise from the environmental

problems?

Answer:

- Ecological briquette production from organic waste;

- Production, sale and maintenance of improved cooking stoves
- Water harvesting systems
- Irrigation systems;
- Water purification;
- Organic fertilizer and organic pesticides.

Note that all of these business ideas would need to be assessed to see whether
they are good business opportunities!

40 Know About Business

 TOPIC 4: Ways of getting into business

Topic 4: Ways of Getting Into

Business

SUGGESTED TIME 1.5 hour

LEARNING OUTCOMES

Learners distinguish different ways of getting into business.

 Learners are able to describe the advantages and disadvantages of buying
an existing business, starting a new business or operating a franchising
business.

ACTIVITIES

1. Invite learners to read and discuss HANDOUT 1.

2. Let learners list the advantages and disadvantages of starting a new business,
and write them on the board. Show SLIDE 1 and discuss with the class
whether there are ways to overcome the shortcomings.
3. Let learners list the advantages and disadvantages of buying an existing
business, and write them on the board. Show SLIDE 2 and discuss with the
class whether there are ways to overcome the shortcomings.
4. Let learners list the advantages and disadvantages of becoming a franchisee,
and write them on the board. Show SLIDE 3 and discuss with the class
whether there are ways to overcome the shortcomings.
5. Divide the learners into groups. Have them discuss:
a. the advantages and disadvantages of starting a new restaurant
b. the advantages and disadvantages of buying an existing restaurant
c. the advantages and disadvantages of opening a new restaurant as
franchisee
6. Have each group present the advantages and disadvantages of either starting
a new restaurant, buying an existing restaurant and opening a restaurant as a
franchisee to the class.

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 MODULE 4: How do I find a business idea?

HANDOUT 1

Buying an existing business versus

starting a new business

1. Starting a new business

Most people who want to be entrepreneurs think that the best approach is to start their
own new business and not to buy one that already exists. This approach gives the
potential owner a great deal of satisfaction. It also means taking a relatively high risk
compared to buying an established business.
Starting a new business means allocating a great deal of time to planning and
investigating the potential market for the products or services to be sold by the new
business.

2. Buying an existing business

If someone has never owned a business, buying and operating an existing business
offers many advantages such as established customers and business procedures,
trained employees, inventory and premises as well as an established name in the
market.
There are many questions the potential entrepreneur needs to ask before buying any
business which is for sale:
 Why do I want to buy this business?
 Why does the owner want to sell?
 Does the business have a future where it is and the way it is operating?
 Will I be happy operating this business?
 Do I have the skills?

The question of price is a difficult one. Consider what you are getting for the price you
are paying.
 Are you getting land and buildings?
 Are you buying the stock, furniture and appliances?
 Are you buying the name of the business and the rights to use that name forever?
 Are you paying for the present owner of the business not to set up another
business nearby?
There are several ways of putting a price on a business. By comparing several similar
businesses you will get a “feel” for a reasonable price. However, no matter how much
you pay, that amount is your investment in the new business.

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 TOPIC 4: Ways of getting into business

3. Becoming a franchisee

Franchising is a system where a franchiser has developed and implemented a

business that he offers for replication to a franchisee. The franchisee opens a
business by using the business idea of the franchiser against a fee. In return, the
franchisee gets training, the marketing concept, the brand name and the product or
service. He also has the guarantee that no other franchisee from the same franchiser
will have the right to do business in the same area.
All these elements are fixed in a franchising contract that is binding for both parties.
Franchising lowers the risk as the product is usually well known in the market. On the
other hand, it limits entrepreneurial decision-making and shrinks the profit margin as
a fee or a percentage of the turnover has to be paid to the franchiser.

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 MODULE 4: How do I find a business idea?

SLIDE 1

Advantages and disadvantages of starting

a new business

Advantages Disadvantages

 Potentially lower expenses  High risk in establishing a

and start-up costs new business

 Requires significant
 Greater personal freedom personal and business
planning
 Ability to enter a new  Customers may have to
market or introduce a new be found and customer
product relations developed
 Ability to decide on
 Competition from
business practices and
established businesses
strategies from the
may be strong
beginning
 New business operations  May be difficult to find
can be introduced from financing for the start-up
the beginning period

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 TOPIC 4: Ways of getting into business

SLIDE 2

Advantages and disadvantages of buying

an existing business

Advantages Disadvantages

 Product or service may be

 Less risk
in a declining market

 Trained staff  Limited growth potential

 Cash flow already being  Debts or stock may be too

generated high

 Relationships have been

 Merchandise may be
established with suppliers
obsolete
and banks

 Seller may have hidden

 An established service or reasons for selling: the
product, with customers business may have been
declining for years

 An established business  The business may have a

name and reputation bad reputation

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 MODULE 4: How do I find a business idea?

SLIDE 3

Advantages and disadvantages of

becoming a franchisee

Advantages Disadvantages

 Lower risk for the start-up  Less entrepreneurial

decision-making power

 Start-up investment cost  Franchising fees would

well known decrease profits

 No possibility of
 Good market introduction
introducing a new product
of the product or service
from other suppliers

 Strong dependency on the

 Proven marketing concept
franchiser

 If the franchiser’s business

 Training assured by the loses the market, your
franchiser business loses the market
as well

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 TOPIC 5: Selecting a suitable market

Topic 5: Selecting a Suitable Market

SUGGESTED TIME 2 hours

LEARNING OUTCOMES

 Learners are able to explain the steps to be taken in identifying a suitable

market for a product or service.

ACTIVITIES

1. Conduct a class discussion regarding the five questions on SLIDE 1. Ask the
question “Why is it so important for entrepreneurs to have a complete
understanding of the market before starting their business?” Then invite
learners to read HANDOUT 1.
2. Show SLIDE 2 and present the importance of each of the five Ws. Allow for
questions and comments and deal with any questions in the plenary.
3. Have the learners read and discuss HANDOUT 2. Allow for questions and
comments and deal with any questions in the plenary.
4. After discussion, use the case study in WORKSHEET 1 as an example of a
person starting a business without doing market research. Have the learners
complete and then discuss the questions on WORKSHEET 1.
5. Based on the case study of Mr. White, highlight the importance of conducting
a market survey when starting a business. Have the learners read HANDOUT
3.
6. Divide the learners in small groups. Ask each group to design a market survey
for a business of their choice, using WORKSHEET 2. Let them think of any
business that is operating in the area and then define the objective of the
market survey. Ask them to fill in the table on WORKSHEET 2, defining the
main questions they want to get answered, the sources of information and
whether they would obtain the answers to the questions either through
interviews, direct observations, or both. Invite some of the groups to present
their results to the rest of the class. Allow other groups to provide their
comments and suggestions to improve the market survey instrument.
7. (OPTIONAL ACTIVITY) Invite the learners to carry out their mini market
survey after school hours. Let them present their results during the next
session.

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 MODULE 4: How do I find a business idea?

SLIDE 1

Questions on markets

 What is a market?

 What should entrepreneurs know about potential customers?

 Where can market information be obtained?

 What is market research?

 What factors affect changes in customers’ needs?

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 TOPIC 5: Selecting a suitable market

HANDOUT 1

Buying an existing business versus

starting a new business
A business is more likely to succeed if it sells products or services that enough
customers will buy to generate a profit. For a business to be profitable there must be
an adequate market for its products or services. Before starting a business, it is
therefore essential to determine whether a good market exists for a specific product
or service.

1. What is a market?
The market for a business is composed of all people and businesses within a specific
geographical area, that need a specific product or service and are willing and able to
buy it. Keep in mind that some business sell their products or services directly to
consumers, while other businesses sell their products to other firms or organizations.
Potential customers can be described as:
• People or firms who need or want the product or service
• People or firms who are able to buy the product or service
• People or firms who are willing to buy the product or service
Competition must be considered. If competitors are serving the same market, the
entrepreneur must assess if the market is large enough to support another business,
and how the product or service is unique and different from that of the competitors.

2. What should entrepreneurs know about potential

customers?
a. Who are the customers? The market can be segmented either by dividing it into
meaningful buyer groups such as other businesses and final consumers. These buyer
groups can be further segmented into, for instance, younger and older customers.
b. What are the customers’ preferences? By segmenting the marketing into groups,
it is easier for entrepreneurs to determine exactly what products or services each
group wants or needs. This will help in defining the features of the products or services
that the business should offer.
c. Where do customers buy? Entrepreneurs need to find out where the customers
in their market are presently buying, and determine what factors will cause them to
switch and buy from the new business.

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 MODULE 4: How do I find a business idea?

d. When do customer buy? By knowing when customers buy (daily, weekly, monthly,
seasonally, yearly), entrepreneurs will be able to determine how to organize the
production process, the marketing strategy and the logistical aspects involved in
selling the products (storage and transport, for instance).
e. Why do customers buy? Understanding not only what potential customers buy,
but also why they buy it, helps the entrepreneur to define the right characteristics of
the product. For instance, do they buy certain types of cloths because of they are
comfortable, or because they want to identify with a certain group?

3. Where can entrepreneurs find market information?

Market information can sometimes be obtained from trade associations, Chambers of
Commerce, government agencies (including local government), newspapers,
magazines and the internet. Most entrepreneurs also do their own market research.

4. What is market research?

Market research is studying your customers and competitors. For instance, by giving
questionnaires to existing or prospective customers, asking them about their product
preferences.
When you do market research you will also have to look at certain trends. For instance,
are more people moving to the area, or are people rather leaving the area? Is there
more and more interest in certain products and services, or is interest rather declining?
Market research also involves studying your competitors. Who are they, what
products and services do they sell at what price and what is their sales strategy?

5. What factors affect the consumer market?

The consumer market is constantly changing. Many of the following factors have
contributed to consumer changes in the last few years:
• E-commerce and the fact that people can now buy certain products on-line
• Changes in technology
• Population changes
• Changes in life-style and attitudes
• The availability of consumer credit
• Consumer awareness about environmental issues
Entrepreneurs need to monitor and be ready for changes in consumer behaviour.
Entrepreneurs may need to modify or refine their marketing policies and procedures.
Predicting changes in the market is an important but difficult task. It is important to
collect and analyse market information continuously.

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 TOPIC 5: Selecting a suitable market

SLIDE 2

The “five Ws” of the market

Question Sources of information

1. Who are my  Population data

customers?  Information on income levels

 Market surveys
2. What do they want?
 Informal observations

 Market surveys
3. When do they buy?
 Informal observations

 Informal observations in markets,

4. Where do they buy? commercial centres, stores
 Market surveys

5. Why do they buy?  Market surveys

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 MODULE 4: How do I find a business idea?

HANDOUT 2

Know your competitors - analysing

competition
Competition must be expected when initiating a business, but having too much
competition is risky. It would be better to select a different type of business if there is
too much competition. You must know your competitors, as well as you know your
customers.
Business rewards come from doing things better than your competitors. The best way
to do that is to know who your competitors are and how they operate. The following
steps should be taken by entrepreneurs to get to know their competitors.
Step 1: Identify your competitors
A. Direct competitors: list each by name, address and type of business.
B. Indirect competitors: list the name, address and type of business of each firm that
provides products and/or services that, while not the same as yours, can be a
substitute for yours.
Step 2: Analyse businesses that have recently been set up and recently failed
A. List of businesses that have started within the past two years.
B. List of businesses that have gone out of business within the past two years.
C. Analyze the possible reasons for the businesses that have failed in the last two
years. What factor or combination of factors explains the success of the new
businesses that have succeeded? What factor, or combination of factors, were
present in the businesses that failed?
Step 3: Analyse existing businesses
A. Estimate the sales and turnover of each of your competitors.
B. Rate your competitors in terms of price, quality of product or services, facilities,
advertising, promotion and sales.
 What prices do they charge? What is the quality of their merchandise? How
much do they advertise?
 What extra services do they offer?
 Are their sales terms attractive?
 Is their location expensive, moderate or cheap?
 Are their production processes and equipment modern? Are their employees
well-trained? Are their employees well paid?

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 TOPIC 5: Selecting a suitable market

Step 4: Compare your proposed business operations against the competition

A. Indicate the advantages your products and/or services will have in terms of price,
performance, quality, durability and visibility over the competition.
B. Be able to explain why your method of operating your business will be more
successful than that of your competitors.
C. If you plan to operate in a manner similar to other businesses, you should be able
to explain why:
1. Either the market is large enough to profitably support you and the other firms,
or
2. The market cannot support all competitors but your business will be more
competitive
D. If you plan to operate in a manner completely different from the competition, you
should be able to explain why no one else is operating that way. Are other
businesses not aware of the opportunity? Or, do they know something that you
don’t?

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 MODULE 4: How do I find a business idea?

WORKSHEET 1

White’s hardware store

Mr. White was a young school teacher in a small town. After moving to the community,
Mr. White made many friends, was apparently well-liked and took part in many
community activities. Mr. White wanted to make more money so he thought he would
start a business. He was encouraged by his wife to try a way of life that would bring
more income than teaching.

Mr. White heard through a friend that a stock of hardware was for sale in a town. The
owner of the store had died. For 2,000 cash, Mr. White could buy an inventory of
hardware items. Investigating the possibilities in his town, he could rent a vacant store
between two retail businesses. One of these businesses was a feed store, and the
other was a long established hardware store owned by a smart middle-aged
businessman. Although a local banker told Mr. White not to leave his job as a school
teacher, he quit his teaching job, took his savings of 5,000 and entered the hardware
business. Other business people in the town didn’t think the new hardware store
would survive. One of the local retailers said there was no room in the town for two
hardware stores.

Upon opening his store, Mr. White placed a sign in the window stating: “Open for
business from 6 AM to 10 PM, the owner will also do business outside regular
business hours.” Mr. White thought that in this way he could compete with the

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 TOPIC 5: Selecting a suitable market

established hardware store next door. He also put in a ramp at the front door to make
it easier for customers with physical disabilities and those with baby strollers to enter
the store.

During weekdays, Mr. White’s hardware store was the only place of business in town
to stay open after six PM. During the long hours the hardware store was kept open,
Mr. White didn’t make too many sales.

The only customers Mr. White attracted were a few poor customers, who purchased
small items from the new hardware store on credit rather than paying cash in the other
hardware store. Mr. White soon discovered that his stock was down, that he had no
cash with which to purchase new stock, and that he could not borrow more money to
keep the business going.

With competition from the established hardware next door, Mr. White’s business
lasted only eighteen months. There had never really been much of a chance of
success. The market for hardware items in the town was too small to support two
hardware stores. Even the best manager could not have made a success of White’s
Hardware Store. Mr. White wished he had checked things more carefully before he
started the business. Mr. White thought that “maybe the teacher’s salary wasn’t so
bad after all.”

Questions for discussion:

1. Why did Mr. White’s Hardware store fail?

_________________________________________________________________

_________________________________________________________________

2. What should Mr. White have done before he started the business?

_________________________________________________________________

_________________________________________________________________

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 MODULE 4: How do I find a business idea?

HANDOUT 3

Conducting a market survey

Steps in conducting a market survey
A market survey involves the following steps:
1. Define market survey objectives and specify what information is required.
2. Work out details of the market survey, such as:
 sources for obtaining information,
 time and cost of conducting the study,
 methodology to be used in gathering information,
3. Decide what contacts and visits should be made.
4. Prepare questionnaires and plan for survey interviews.
5. Collect and analyse data.
6. Prepare a report of findings.
For new entrepreneurs, a major problem in conducting market surveys is not knowing
specific sources and contacts for obtaining information.
The information sources can be divided into:
1. Primary data sources: information which you collected yourself through
interviews, surveys or direct observation
2. Secondary data sources: information that already exists and that you can obtain
from trade/manufacturer’s associations or published data.

Tips for conducting a market survey

The following tips can help entrepreneurs to conduct a market survey effectively and
systematically.
 Make sure you remain open to the opinions of different kinds of people.
 Be patient and persistent in gathering information during the survey.
 Keep information confidential. Do not pass information on to others.
 Write down the information immediately after you visit someone. Avoid writing
or referring to your papers when interviewing someone.
 Sequence your questions in a logical way.
 The best way to gain information from your competitors is to go as a potential
client.

56 Know About Business

 TOPIC 5: Selecting a suitable market

Besides talking to people, you could also get information through observation. For
example, in deciding whether to open a shop on a particular street, you can observe
and count the number of people going past on given days and compare these
numbers to other sites. Or, if you are interested in an area frequented by tourists, you
may have notice that there is no decent restaurant or hotel on a tourist route or in a
given town.
When the survey is completed, a detailed report on your findings should be prepared
in written form. The market survey report will help you to assess the feasibility of
selling your product or service. It may also be an important document to convince
financial institutions about your understanding of the market and your competition.

Know About Business 57

 MODULE 4: How do I find a business idea?

WORKSHEET 2

Our Mini Market Survey

Our product or service: ________________________________________________

The objectives of our market survey:

___________________________________________________________________

___________________________________________________________________

Questions that we want

Sources of information Methodology
to get answered:

1. ○ Interviews
○ Direct observation
○ _______________

1. ○ Interviews
○ Direct observation
○ _______________

3. ○ Interviews
○ Direct observation
○ _______________

4. ○ Interviews
○ Direct observation
○ _______________

5. ○ Interviews
○ Direct observation
○ _______________

58 Know About Business

 1 What is entrepreneurship?

2 Who are entrepreneurs?

3 Entrepreneurial qualities

4 How do I find a business idea?

5 How do I start a business?

6 How do I run a business?

7 Next steps

8 How do I develop my business plan?

Facilitator’s Guide

Learner’s Workbook

ISBN XX-XXXX-XXX-X
Illustrations: Gianmaria Roccia – Photographs: ............