Developing a Business Idea - PDF

Running Head: DEVELOPING A BUSINESS IDEA
DEVELOPING A BUSINESS IDEA
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Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................3
Market problem..........................................................................................................................4
Benefits generated by the idea...................................................................................................4
Evaluation of feasibility.............................................................................................................6
Market feasibility....................................................................................................................6
Commercial feasibility...........................................................................................................6
The proposed business model....................................................................................................7
Critical success factors...............................................................................................................8
Conclusion..................................................................................................................................9
Appendix....................................................................................................................................9
A simplified structure of the proposed business model canvas..............................................9
References................................................................................................................................10
DEVELOPING A BUSINESS IDEA

Executive Summary
The paper is set out to generate a feasible business idea for implementation in the
market. Coming up with the business idea will come involve analyzing factors such as the
entrepreneurial gap that ought to be filled, the market demand, the legal requirements, the
location of the business among other factors. The paper will also look at the benefits of the
idea to the owner and general public, its critical success factors as well as an evaluation of its
feasibility regarding market and commercial feasibility. The business idea that was arrived at
was manufacture and sale of a leather jacket in Singapore. The choice of the business idea
was prompted by the cold climatic conditions in the area as well lack good quality services in
the sector that can benefit both the owner and the general population simultaneously.
According to the report, the success of the business will come from its relation to the public,
proper use of internal resources to develop competitive strategies as well as manufacture of
high-quality products. So e of the recommendations in this report are meeting the necessary
legal requirements and plowing back of profits to achieve business maintenance and
diversification.
DEVELOPING A BUSINESS IDEA

Introduction
Competition has brought about the necessity to come up with unique and feasible business
ideas that will do well when implemented in the market. Coming up with workable and
exemplary business ideas depends on some factors. Sone of these factors is the availability of
a market gap as a result of product or services not offered in the market or a commodity
offered with low quality (Amit, 2016). Other factors are determining where to locate the
business, the commodities that the business will deal with, the target customer segments,
legal requirements among other vital factors. The major factor that one ought to consider is to
identify an entrepreneurial gap that the proposed businesses will fill. This paper is purposed
at coming up with a business idea and giving out a report on factors concerning the business.
Market problem
The proposed business, in this case, is the sale of ASA scarf in Australia. The business is
intended to be located in Canberra, the capital of Australia. ASA scarf is both gender wear
that was first produced in France. These are high-quality scarfs that can be worn by any
gender (Aversa, 2014). The business will involve manufacturing and selling of the scarfs.
Research has shown that most of the people in Australia like accompanying their daily
fashion with a scarf both as a protection against cold as well as fashion. However, most of the
scarf sold in Australia is mot of the best quality, and it would, therefore, be imperative to
come up with better quality scarfs (Bocken, 2016). The chief reason for choosing this
business idea is that there is a wide market resulting from climate and fashion requirements.
No such a law prohibits the wearing of such scarfs, and therefore this would be one of the
best business ideas. As a result, therefore, if this business is started, it will maneuver up well.
DEVELOPING A BUSINESS IDEA

Benefits generated by the idea
Many benefits will come along as a result of investing in this business. Some of them apply
to the business owner while others apply to the third party, the public and the country as a
whole. The benefits that accrue to the business owner are getting revenue regarding profits,
return on investment and other financial benefits arising from operations of the business.
These financial benefits can bring about other benefits like raising the living standards of the
owner, attained self-actualization, rising social status among others (Jia, 2017). Since the
external benefits accrue to a wider population, it is imperative to explore them. For instance,
the business will bring about improved infrastructure. The business will prompt the
betterment of social services like schools, hospitals, water, and electricity, roads among
others. This improvement of infrastructure will come along as a result of the money paid to
the government in the form of corporate tax.
Another benefit that will be generated by the business idea is improving the living standards
of the individuals of Australia. The business will improve the Gross Domestic Product of the
country which will consequently increase per capita income that will imply that the living
standards of the people of Australia have been improved. The business will also create job
opportunities for people working in the factory as well as those vending the scarfs, whether in
wholesale or retail (Nanlohy, 2017). Increased job opportunities mean improved living
standards. Again, the business will help attain goals sustainably. One of the sustainability
goals is reducing global warming. The company will not release any harmful gases to the
environment which cause global warming. Another goal of sustainability is poverty
reduction. The business will offer permanent employment opportunities to many individuals.
These job opportunities will ensure that many people are working to reduce the dependency
ratio, something that will eventually eradicate poverty. Poverty also causes social evils like
DEVELOPING A BUSINESS IDEA

crime and robbery (Prasad, 2015). These social evils are as a result of poverty. This business,
as a result of the provision of job opportunities, it will eradicate these evils. It will also
prevent immoral behaviors like prostitution for sustenance money as a result of poverty. This
move will help sexually transmitted infections.
Evaluation of feasibility
The evaluation of feasibility involves exploring both the market and commercial feasibility.
Market feasibility
A wide market is anticipated as a result of quality products leading to beating of the rivals.
This business targets both gender of any age. However, it mostly targets the youth and the
middle-aged. The targeted market will be about 80% of the Australian population. Later the
market will be diversified after joining the global market. The competitors are The Scarf
Company, Scarves and Poncho among other scarf selling firms. These competitors will be
outcompeted by the fact that the business aims at providing highly differentiated products
(Rapp, 2015). It will produce quality commodities to convince customers to buy its products.
The business will also try to reduce the cost of production to be able to sell its products at a
slightly lower price. The biggest strength of the competitors is having already an established
brand. Their weaknesses are poor customer relation and supply chain management. The only
evident barrier is meeting legal requirements.
Commercial feasibility
DEVELOPING A BUSINESS IDEA

In implementing the business, 1.3 billion USD will be required. These funds will come from
personal savings, borrowing as well as the sale of shares and debentures to the public. Profits
will be plowed back into the business to enhance diversification. The business will need to
operate for approximately one week before it makes the first sales. To reach the breakeven
point, the business may be required to operate in a month or two.
The proposed business model
It is imperative to come up with a good business model because it gives an insight into the
operations of the proposed business. That will involve rolling about the nine building blocks
of the business model. In customer segmentation, the customer base will be divided into the
young, the middle-aged and the elderly to be able to conveniently reach out to the targeted
segment (Rayna, 2017). For the case of value propositions, the business will offer a variety of
benefits to its customers; these include gifts, shopping vouchers, samples as well as bonuses.
These benefits ate not widely offered by other scarf manufacturers, and thus customers will
opt for the products of this business.
The business will set up dedicated customer support to help the customers whenever the need
arises. The business will also connect with customers in the social media via platforms such
as blogs, websites, Instagram, Facebook, Twitter, among others (Sinha, 2017). For
distribution, the role will be given to supply chain and logistics management department. The
business will at first establish a personal relationship with its customers aiming at making the
product known to everyone. The business will then develop strategies for maintaining the
customers as well as diversifying the market by attracting new customers as well as joining
the global market. The business will have dual revenue streams which are recurring revenues
DEVELOPING A BUSINESS IDEA

that will come along as result of payment for the value propositions by the customers and
transaction revenues that will result from payment for the products by the customers.
The main resources that will be used in the business are physical, technological, human and
financial resources. The key activities that will be carried out in the proposed business are
manufacturing and distribution of the scarfs. As mentioned earlier, the distribution role will
be played by the supply chain management team. This team will ensure that there is the cost-
effective and efficient transportation of the product from the production to the consumption
point (Martins, 2017). The business will use buyer-seller and strategic alliance relationships.
The costs incurred will be for acquiring the necessary resources necessary to start and run the
business smoothly.
Critical success factors
The execution of the business idea will involve several critical y success factors. First and
foremost, the business will be service oriented. It will ensure that quality services are offered
to all the customers to ensure satisfaction. The business will also ensure that its employees
are well motivated. The proper motivation of employees usually improves performance and
productivity within the organization (Wang, 2016). The business will also use the idea of
division of work and specialization. The use of this idea will prompt improved productivity
regarding output. The business will also use modern technology for human resource
management as well as scarf production. All that will be aimed at achieving performance.
The business will make the best use of internal resources to create competitive advantages
over its rivals. It will also ensure that it hires a highly qualified skilled workforce to ensure
that quality output is guaranteed. The business will also pay much attention to
DEVELOPING A BUSINESS IDEA

communication within and without its premises. Poor communication has led to the failure of
many firms. The best communication strategies will be employed to promote efficiency.
Conclusion
The report has clearly shown the importance of generating a feasible idea. It is crucial to
come up with a business idea that is workable, and that can be applied in the proposed
market. When coming up with a business idea, it is important to analyze it regarding the
benefits associated with the implementation of the business, the critical success factors during
its execution as well as its feasibility. It is essential also to identify an entrepreneurial gap
intended to be filled by the business idea as well as the legal requirements associated with the
proposed business idea. Conclusively, therefore, the business idea, the sale of ASA scarf in
Australia will succeed because the above-mentioned factors have been put into consideration.
DEVELOPING A BUSINESS IDEA

Appendix
A simplified structure of the proposed business model canvas
Key Partners Key Activities Value
Propositions
Customer
Segments
Key Resources
Commercial
banks,
insurance
companies, and
other interested
parties
Acquisition of
raw materials,
manufacturing,
and marketing
Bonuses,
Customized
jackets, and
delivery
The young, the
middle-aged
and the elderly
Human,
physical,
financial and
technological
resources
Channels Cost Structure Revenue
Streams
Customer Relationships
Direct sales,
Group
purchasing
organizations
and distributor
Raw materials-
400K
Manufacturing-
1M
Distribution-
Onetime
payments for
goods and
recurring
payment for
24/7 toll-free customer support,
social media platforms, and live
chat programme
DEVELOPING A BUSINESS IDEA

sales 60K value
propositions
References
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Strategic Entrepreneurship Journal, 4 (7), 78-94.
Aversa, P. (2014). From business model to business modeling: Modularity and
manipulation. In Business models and modeling, 56 (8), 68-89.
Bocken, N. (2016). A literature and practice review to develop sustainable business model
archetypes. Journal of cleaner production, 56 (7), 69-78.
deviMartins, L. (2017). Unlocking the hidden value of concepts: a cognitive approach to
business model innovation. Strategic Entrepreneurship Journal, 7 (89), 44-67.
Jia, F. (2017). Investigating the feasibility of supply chain-centric business models in 3D
chocolate printing: A simulation study. Technological Forecasting and Social
Change, 76 (4), 35-55.
Nanlohy, H. (2017). Management and Feasibility Analysis of Smoked Fish Business in
Ambon. In IOP Conference Series: Earth and Environmental Science, 3 (6), 46-72.
Prasad, S. (2015). The business model for transforming a coal mining asset into a rent-
generating resource. A study under multiple strategic frameworks. Resources Policy,
5 (7), 67-78.
DEVELOPING A BUSINESS IDEA

Rapp, C. (2015). Not so risky business? How social policies shape the perceived feasibility
of self-employment. Journal of European Social Policy, 5 (7), 66-88.
Rayna, T. (2017). From rapid prototyping to home fabrication: How 3D printing is changing
business model innovation. Technological Forecasting and Social Change, 35 (7), 65-
89.
Sinha, A. (2017). Analysis of issues controlling the feasibility of automobile
remanufacturing business in India. International Journal of Services and Operations
Management, 58 (6), 37-57.
Wang, Y. (2016). Big data analytics: Understanding its capabilities and potential benefits for
healthcare organizations. Technological Forecasting and Social Change, 3 (7), 49-68.
DEVELOPING A BUSINESS IDEA