Essay about ENT10001 Lecture 2 WT 2015

Essay about ENT10001 Lecture 2 WT 2015 Essay about ENT10001 Lecture 2 WT 2015 Introduction to Entrepreneurship ENT10001, Winter Term 2015 Lecture 2 Prepared by Susan Jones Agenda Evaluating Entrepreneurial Opportunities – sorting the ideas from the opportunities 2 Prepared by Susan Jones Spot the flaw in this â€Å"story† Priceline Webhouse club Extension of Priceline.com (name your own price for airline tickets) Applied model to groceries Customer specifies price for (say) peanut butter Webhouse negotiates with suppliers, best price for bulk purchase What could go wrong here? Prepared by Susan Jones 3 And the miscalculation in this one Webvan Online grocery, during dot.com boom Backed by $millions in venture capital Order online and have groceries delivered to you Or Dogfood.com Same model but for dog food Seems plausible – why might it not work? 4 Prepared by Susan Jones What is the difference between an idea and an opportunity? 5 Prepared by Susan Jones Idea A thought or collection of thoughts that generate in the mind. An idea is usually generated with intent, but can also be created unintentionally. Ideas often form during brainstorming sessions or through discussions. Business Dictionary.com 6 Prepared by Susan Jones Opportunity Exploitable set of circumstances with uncertain outcome requiring commitment of resources and involving exposure to risk. Business Dictionary.com 7 Prepared by Susan Jones Two main sources of opportunity Change Problems 8 Prepared by Susan Jones What is an Opportunity? = Business Concept/Model + Window of Opportunity Timmons, New Venture Creation Prepared by Susan Jones 4 elements of an Opportunity 1. It solves a significant problem or need 2. It creates significant value for the customer 3. It can be commercialised because the market has the right characteristics 4. It is a good fit for the business owner Timmons 10 Prepared by Susan Jones Characteristics of an Opportunity Prepared by Susan Jones Why evaluate? Reasons for business failures: – Lack of capital – Lack of professional advice – Lack of planning Risk – Time – $ Each screen (test) you do leads to a higher probability of success Prepared by Susan Jones Detailed evaluation: Purpose To gain a clear idea of the opportunity through research To validate your assumptions about the opportunity To shape the opportunity to be more profitable To uncover potential pitfalls To decide whether the opportunity is worth the risk? Will you implement? Prepared by Susan Jones Assumptions What assumptions have you made in building your business case Assess the consequences of incorrect assumptions How severe would the impact be How will you overcome these Make sure you declare the assumptions How can you test your assumptions – VALIDATION! Prepared by Susan Jones Marketing & Opportunity Evaluation A good entrepreneur starts with the market Market research is the cornerstone of opp eval & biz development Lean startup relies on feedback from customers 15 Prepared by Susan Jones Types of research Secondary – Published (secondhand) sources Primary – First hand information 16 Prepared by Susan Jones Talking to people- primary research Industry associations, local chambers of commerce, government departments people working in the industry, business owners who have similar businesses Potential customers – chat, survey 17 Prepared by Susan Jones Secondary research Online – – – – Australian Bureau of Statistics: www.abs.gov.au Factiva IBISworld Online forums related to your industry Industry associations online databases with