CHAPTER TWO
CREATIVITY AND BUSINESS
DEVELOPMENT
May, 2025
Creating and starting the venture
Brainstorming questions
1. What do you understand by terms;
o Opportunity scouting/sensing
o Environmental scanning and
o SWOT analysis
o Business plan as entrepreneurship process of setting
new business (venture)?
Creating and starting the venture
Discussion topics!
A. Business Idea Generation
How do we get an idea to start a business?
B. Business Idea Selection
- How do we select the best and viable business idea/s out of
the list of ideas?
C. Business Plan Development
- a written document describing all relevant internal and
external elements and strategies for starting a new venture.
Creating and starting the venture
What is a Business Idea?
The response of a person or an organization to solving an identif ie d
problem or to meeting perceived needs in the local environment
(markets, community, etc.).
Finding a good idea is the f ir st step in transforming the
entrepreneur’s desire and creativity into a business opportunity.
Two things should however be noted:
(a) It is a precondition; a business idea is only a tool.
(b) An idea by itself, however good, is not sufficient for success.
Creating and starting the venture
Business Idea Generation
Remark!
• A profitable business idea is sitting under your nose;
• Opportunities and possibilities are always out there;
• Creative thinking is important besides Concrete thinking (basic
and literal form of thinking)
Good business opportunities are often the results of the entrepreneur
being alert to his/her environment of extra effort in establishing
opportunity identification mechanisms.
Creating and starting the venture
What is Creativity?
It is the ability to bring something new into existence, whether a new
solution to a problem, a new method, or device or a new artistic
objects or form.
In other words, it is thinking what no one else has thought before.
It is the prerequisite to innovation.
Innovation is the transition of creative idea into a useful application.
Creating and starting the venture
Sources of Business Ideas
1. Hobbies/Interests
A hobby is a favourite leisure-time activity or occupation.
Many people, in pursuit of their hobbies or interests, have founded
businesses.
2. Personal Skills and Experience
Over half of t he ideas for successful businesses com e from
experiences in the work place.
Creating and starting the venture
Sources of Business Ideas
3. Franchises
It is an arrangement whereby the manufacturer or sole distributor of a
trademark, product or service gives exclusive rights for local
distribution to independent retailers in return for their payment of
royalties and their willingness to conform to standardized operating
procedures.
4. Mass Media
5. Exhibitions
Creating and starting the venture
Sources of Business Ideas
6. Surveys/Research and Development units
The needs and wants of the customer, which provide the rationale for
a new product or service, can be ascertained through a survey.
7. Complaints from Customers
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.
Creating and starting the venture
Sources of Business Ideas
8. Change/technological
Change can be a threat; however, most entrepreneurs consider
change as a challenge and opportunity to trigger new needs for
products and services.
9. Government regulation
10. Market shift
Creating and starting the venture
Business idea selection
Macro
1 screening
Funnel model
2 Micro
screening
3 SWOT
Analysis
Creating and starting the venture
Business idea selection
Macro screening
First selection/filtering
Use the following basic criteria:-
Is there sufficient demand?
Own capabilities?
Own sufficient financial resource? (at least 20%)
Are there many similar project in the area?
Creating and starting the venture
Business idea selection
Micro screening
Stricter viability test
Solvent demand
Availability of qualified personnel
Availability of technology equipment
Availability of raw material
Competitors
Critical success factor
Creating and starting the venture
Business idea selection
SWOT Analysis
The last exercise of refining a business idea
The f in ding of the analysis gives concrete ground for
undertaking market studies
Strengths weaknesses
Opportunitie
Threats
s
Creating and starting the venture
Business Plan Development
A business plan (feasibility plan) is an outline of potential
issues to address and a set of guidelines to help an
entrepreneur make better decisions.
The depth and detail of the business plan depends on the
size and scope of the proposed type of new venture.
The size of the market, competition, and potential growth
may also affect the scope of a business plan.
Creating and starting the venture
The purpose of business plan
1. It can help the owner/manager to crystallize and focus
his ideas
2. It can help the owner/manager set objectives and give
him/her a measure against which to monitor performance
3. It can also act as a vehicle to attract any external
finance needed by the business
Creating and starting the venture
The purpose of business plan
4. It can convince investors that the owner/manager has identif ie d high
growth opportunities, and that he has the entrepreneurial capacity and
managerial talent to exploit that opportunity effectively
5. It entails taking a long-term view of the business and its environment
6. It emphasizes the strengths and recognizes the weakness of the
proposed venture
7. It offers a sound basis for operation of a business plan that can be used
at different times
Creating and starting the venture
Business Plan Development
Creating and starting the venture
Business Plan Development
"The business that fails to plan,
plans to fail“
Creating and starting the venture
Pitfalls to Avoid in Business
Planning
The following are the drawbacks in planning:
Unrealistic Goals
Indicators: lack of attainable goals, time frame, priorities and action
steps
Re m e dy: se t t ing up a t im e t able wit h spe cif ic st e ps t o be
accomplished during a specific period.
Failure to Anticipate Roadblocks
Indicators: no recognition of future problems, no admission of
possible weaknesses of the plan, no contingency plans
Creating and starting the venture
Pitfalls to Avoid in Business
Planning
Remedy: listing the expected obstacles and solutions
No Commitment or Dedication
Indicators: excessive postponement, missed appointments, no
desire to invest personal money
Remedy: acting quickly and follow professional appointments, show
financial commitment
Lack of Demonstrated Experience (Business or Technical)
Indicators: no experience in business, no experience in specific area
of the venture, not understanding the industry.
Creating and starting the venture
Pitfalls to Avoid in Business
Planning
Remedy: giving evidence of personal experience and background,
build effective team.
No Market Segment
Indicators: uncertainty regarding who will buy, no proof of unsatisf ied
need
Remedy: having a specif ic target market, justify why and how your
product will satisfy the need.
Creating and starting the venture
Components of Businesses plan
1. Cover Page
This should include at least:
• Name of the Business
• Type of Ownership
• Date prepared
• Addresses
Creating and starting the venture
Components of Businesses plan
2. Executive Summary
This is a concise summary/synopsis of the business
o p p o r t u n i t y ; h o w e v e r, i t c o v e r s a l l i m p o r t a n t
components of the plan (a maximum of two page
document).
In other words, it is Brief summery of what's being
proposed.
Creating and starting the venture
Components of Businesses plan
2. Executive Summary
It addresses at least five subjects as noted in the figure below.
Creating and starting the venture
Components of Businesses plan
3. Description of the business & products/services
The general description of the business refers:
• Form of business • Uniqueness of product or
• Owners service
• Name of the business • Addresses: kebele, telephone,
• Business startup date fax, E-mail
• Business type: e.g., supplier
of high quality child care
products
Creating and starting the venture
Components of Businesses plan
3. Description of the business & products/services
Essential information required to describe a product
includes;
• distinctive characteristics of • methods of manufacturing
the product itself • proprietary protection
• how it works (or is used) (patents, trademarks, or
• materials copyrights) and
• costs • potential competing
(substitute) products.
Creating and starting the venture
Components of Businesses plan
4. Market Research and Analysis
In this section different information about the market
concerning the following marketing components will be
incorporated.
• Target market (customers) identified (such as, age, sex, family
income, occupation and location of potential customers)
• Market size and trends (know that a market exists only when there
are qualified buyers)
• Competition (explain competitors' strengths and weaknesses)
• Estimated market share
Creating and starting the venture
Components of Businesses plan
4. Market Research and Analysis
The following questions might be asked and given reply to be
competitive in the market regarding your Product or service.
• What are you selling?
• How will your product or service benefit the customer?
• Which product or services are in demand?
• What is different about the product or service your business is
offering?
Creating and starting the venture
Components of Businesses plan
4. Market Research and Analysis
Here the following questions should be addressed Product or
Service Distribution.
• What are your location’s needs?
• Is the area accessible?
• How and where you plan to sell your product?
It should be noted here in that you must match your location and
distribution strategy to the buying pattern preferences of your
target market.
Creating and starting the venture
Components of Businesses plan
4. Market Research and Analysis
The entrepreneur is also expected to know different pricing strategies and
try to decide a strategy that suits its objectives.
Hence, getting the pricing strategy of competitors is important to see the
relationship of your price with the competitors and the industry average.
Other important issues to be considered regarding Pricing systems: Luxury
prices for name-brand products, Low prices with frequent sales and
discounts, credit policies, location, methods of distribution,
Creating and starting the venture
Components of Businesses plan
4. Market Research and Analysis
Advertising and promotion is the other important thing in business
world that enables business entities to create awareness about
their products or services with an action plan to obtain sales
projections.
Hence, a well-def ined plan of action includes the timing, costs and
expected return of the chosen promotional methods which have
impact on cash flow, both cash receipt and cash disbursements.
Creating and starting the venture
Components of Businesses plan
4. Market Research and Analysis
Elements of the Marketing Plan (Summary)
Creating and starting the venture
Components of Businesses plan
5. Manufacturing or operations plan
This section Outlines how your company will operate and include
the production process or service delivering process exhaustively.
It comprises of the following components.
o Location analysis
Is the area desirable?
The building desirable?
Is it easily accessible?
Is the public transportation available?
Creating and starting the venture
Components of Businesses plan
5. Manufacturing or operations plan
Is street lighting adequate?
Are market shifts or demographic shifts occurring?
o Production needs: facilities and equipment
o Suppliers/transportation cost
o Labor supply (Human resource requirements)
o Manufacturing cost data
o Inventory management
o Legal issues
Creating and starting the venture
Components of Businesses plan
6. Management
The intent of the Management Plan is to explain in detail who will
run the business, what skills and credentials these people have,
and how everyone will f it into the organization's structure. So, the
plan encompasses:
o Management team – key personnel
o Legal structure – stock agreements, employment agreements,
ownership
o Board of directors, advisors, and consultants
Creating and starting the venture
Components of Businesses plan
7. Financial plan
Financial statements for a new venture are projections
based on previously def ined operating and marketing
assumptions. So, the plan encompasses:
o Financial forecast (Prof it and loss statement, Cash
f lo w statement, Break-even analysis, Cost controls,
Balance sheet)
Creating and starting the venture
Components of Businesses plan
7. Financial plan
o Sources of finance and application of funds (Debt
financing and equity financing)
o Budgeting plans
o Financing stages (Early Stage/Seed, Expansion
Stage, Liquidation Stage)
Creating and starting the venture
Components of Businesses plan
8. Milestone Schedule
o Product design and development. o Product display at trade
o Establishing the management shows
team o Signing up distributors and
o Production and operations dealers
scheduling o Ordering production
o Market planning quantities of materials
o Incorporation of the business o Receipt of first orders
o Completion of design and o First sales and first deliveries
development o Payment of first account
o Hiring of sales representatives receivables (cash-in)
Creating and starting the venture
Components of Businesses plan
9. Critical Risks
Critical risks of a business may include:
o Potential Problems: effect of unfavorable trend in the industry,
design or manufacturing cost overruns, and longer lead times in material
purchases, unplanned-for competition.
o What-ifs: those conditions which may happen in the future but not yet
to be known about their occurrence currently. Some of them might be
competitors’ price cut, inaccurate sales projections, breaking up of
management team.
o Alternative courses of action (i.e. contingency plans)
Creating and starting the venture
Components of Businesses plan
9. Appendix
o This section contains documents and other materials which have
been used for preparing business plan.
o This can be f in ancial, administrative, human resource or other
related data.
Creating and starting the venture
Sample Business plan format
[Link]
THANK YOU!